Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Exscientia Limited the latest in Frontier IP Group's portfolio to shine

Frontier trades its commercial expertise for stakes in the university spin outs and has a core portfolio is six firms.
picture of drugs
Exscientia aims to make finding the next blockbuster a lot cheaper

Frontier IP PLC’s (LON:FIPP) aim is to act as the commercial cocoon around the growing amount of  intellectual property being spun out of universities.

So far, its portfolio includes spinouts from six of the UK’s uni’s including Cambridge, Plymouth and Dundee.

It trades its commercial expertise for stakes in the spin outs and has a core portfolio of six firms.


Core portfolio

They include PulsiV Solar (20%), out of Plymouth University, which has come up with a technology that improves the energy generation of photovoltaic panels.

There’s Nandi Proteins (21%), which could revolutionise food production with ingredients developed at Heriot Watt.

In the traditional model, the intellectual property company would make a direct financial investment that gives a fairly accurate valuation of its stake in the business.

Frontier is a little different. Because it has bartered its own services for a share of the company it is included on the balance sheet at a nominal value - sometimes just tens of thousands of pounds.

The uplift comes when the investee company receives funding that precipitates a revaluation and it is Exscientia (5%) where the next uplift may well come from.


Big pharma

In the space of two months, the company has tied down collaboration deals with two of the world’s largest pharma companies for its artificial intelligence-based drug research.

Exscientia and French ginat Sanofi will focus on metabolic diseases such as diabetes and use the AI technology to identify molecules that can be compatible with two distinct drug targets (bispecific).

The collaboration will start with a thousand disease-relevant target combinations that Exscientia will sift using its AI design expertise to identify bispecific-small-molecule compounds that may develop into full products for Sanofi.

Exscientia will be responsible for all compound design, while chemistry synthesis will be delivered by Sanofi.  

Payment will be through research funding, milestones covering both non-clinical and clinical and recurrent sales milestones if any product makes it to market.

The total amount potentially payable by Sanofi to Exscientia on achieving these milestones is €250mln.

Early in July, the company also landed a smaller but similar deal with Glaxo.

This will see Exscientia use its artificial intelligence enhanced platform to identify pre-clinical drug candidates for up to 10 disease-related targets nominated by GSK across multiple therapeutic areas.

If all ten targets produce positive results, Exscientia can receive a total of £33mln in milestone and stage payments. 

Andrew Hopkins, Exscientia’s chief executive, said: "Applying our approach to client discovery projects has already delivered candidate-quality molecules in roughly one-quarter of the time, and at one-quarter of the cost of traditional approaches.”



Frontie,r meanwhile, is looking at building up its own expertise by going further afield.

A first deal in Portugal was struck recently with Universidade NOVA de Lisboa’s Faculty of Science and Technology.

“There is a similar dynamic to the UK,” said the Frontier chief executive Neil Crabb.

“There are strong pressures on universities to diversify their income streams and to show more impact.  But there is a lack of local equivalents to us to helps support them.”


The share price

The shares trade at 40.5p, valuing the business at £14.6mln up slightly on the start of the year.

Net assets per share were just shy of 26p at December.


View full FIPP profile View Profile

Frontier IP Group Plc Timeline

Related Articles

June 06 2018
Financial services have been especially strong and driven by fears over cybersecurity ...
drill rig
June 18 2018
The last few months have seen an increase in demand for exploration rigs, which will benefit Capital Drilling's utilisation rates from this segment of the market - chairman Jamie Boynton
The river Thames
June 08 2018
No longer focused so much on drone technology, the high-tech survey and inspection specialist is so changed that it probably should change its name but management would rather spend the money growing the business

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use