U.K. investors team up to create $1.2B cancer-focused fund

A clutch of leading U.K. life sciences investors is pooling its resources to create a group with £1 billion ($1.2 billion) in assets. The arrangement brings together Wellcome Trust investment offshoot Syncona, BACIT (LON:BACT) and CRT Pioneer Fund to create a London-listed, cancer-focused biotech investment behemoth.

If approved by shareholders, Syncona will combine with BACIT and retain its London Stock Exchange listing for the newly enlarged company. That transaction will make the Wellcome Trust the largest shareholder in BACIT. Cancer Research UK is also set to take a stake in BACIT and give it all or most of its investment in the CRT Pioneer Fund. The upshot is three notable sources of investment in cancer research and other fields, all of which were set up in 2012, will soon be working together.

The groups come at the task of financing life science R&D from different angles. Since getting started with £200 million from the Wellcome Trust, Syncona has made its name as a company creator. CAR-T firm Autolus, neoantigen startup Achilles Therapeutics, gene therapy player Freeline Therapeutics and others all got their start under the wing of Syncona.

CRT Pioneer Fund has co-invested with Syncona, but its focus and approach differ. Unlike Syncona, the now £70 million fund is aimed squarely at cancer. And it aims to use two-thirds of its cash to support the work of Cancer Research UK scientists without them having to spin their research out into biotech startups. CRT Pioneer Fund raised £20 million from BACIT in 2014.

BACIT, an acronym for Battle Against Cancer Investment Trust, has a completely different approach to investing and funding research. The company invests in other funds to generate returns for its backers while siphoning off money for charitable donations to the Institute of Cancer Research and other nonprofits.

While the work of BACIT is far removed from the company-creation activities of Syncona, the merger is seen as helping the latter’s work in building biotechs.

“Over the last four years we have established a series of exciting life-science companies with the potential to deliver life-changing outcomes for patients suffering from debilitating diseases,” Syncona CEO Martin Murphy said in a statement. “Combining with BACIT allows Syncona to provide those companies with greater ongoing support as they grow and to make further investments in the life science space.”

In theory, the combined organization and its partners could support a project from early-stage research, into a biotech startup and through its growth into an established biopharma company. The links to the Wellcome Trust and Cancer Research UK cover the first step in the process. Syncona is well-versed in spinning out science. And, as Murphy sees it, teaming with BACIT will enable ongoing investments in the portfolio.