LifeArc, née MRC Technology, sets up high-risk seed fund

Spotlight
LifeArc's seed fund forms part of a new £30 million financing initiative.

LifeArc has set up a seed fund to invest in early preclinical projects that are overlooked because of the high risk of failure at that stage of R&D. The British medical research charity, formerly known as MRC Technology, sees the fund filling a perceived gap in the commercial investment landscape.

That gap covers the stage of R&D between when nonindustry researchers find an interesting piece of science and when there are enough data to attract strategic and financial investors. Fears about how the gap may stymie R&D have led investors including Cancer Research Technology and the Wellcome Trust to set up programs to help get research out of academia, into industry and onto clinical trials in recent years.

Yet LifeArc thinks a gap remains—and sees itself as well placed to fill it.

“We will generally be looking to fund in the early preclinical stage,” Andrew Farquharson, director of technology transfer at LifeArc, said. “We believe that there are significant opportunities to support high potential but neglected innovation at this stage and we feel we can make the most difference by focusing here, particularly as this stage is where we have collaborated and carried our own research for many years.”

Michael Dalrymple, a colleague of Farquharson who is managing the seed fund, cites attempts to independently reproduce results from academic labs or validate drug targets as examples of the projects he will back. LifeArc thinks its own experience at these early stages of R&D will help it pick projects to back and know what support to provide to the recipients of its investments.

LifeArc has opted against publicly setting a target number of investments for the fund, preferring to decide how to dole out the cash as it assesses funding opportunities. How much LifeArc will bet on any one project is capped, however. Farquharson said no single investment or grant will account for more than 20% of the £30 million ($38 million) LifeArc has pulled together for its seed fund and a second new financing vehicle.

The second vehicle is called the Philanthropic Fund. LifeArc set up the vehicle to provide grants to academics working on research with poor commercial prospects. Such research projects have the potential to improve patient outcomes but struggle to attract investment because they target diseases found in less developed countries or are otherwise commercially unattractive. This focus is likely to lead LifeArc to support projects already funded by its research charity partners.

LifeArc will provide these monies as part of its £500 million spending plan for the next five years. The outlay is underpinned by the income MRC Technology, the predecessor to LifeArc, secured for its role in the development of Merck’s immuno-oncology cornerstone Keytruda. The charity chose to partially realize its Keytruda royalty stream last year to deliver a £115 million boost to its coffers.

The work on Keytruda and subsequent monetization of the royalty stream was performed when LifeArc was still known as MRC Technology. The organization took that name when it established itself as an independent nonprofit in 1992. But as the name harks back to the organization’s time as part of the government’s Medical Research Council, it has created confusion about its identity, independence and who it works with.

Rebranding as LifeArc is intended to end such confusion and give the organization a name that better reflects its position as a bridge between medical research and commercial applications.