6 March 2019


Bridging the gap


Law firm with the only dedicated life sciences team in Manchester


BY MIKE COWLEY


Whereas the life sciences sector appears increasingly buoyant in the north – with pundits suggesting it will underpin the region’s future prosper- ity – the reality is that it is struggling to achieve its true potential because the north-south divide is still a major determining factor in success or failure. The bottom line is that while access


to seed capital is available to life sci- ence start-ups in the region, the later stage funds needed to take them to the next point in their development are not only based in the South or overseas but seem loath to commit their money north of Watford. With spin out companies from


universities the main driver of the sector, the significant focus of later stage funders is still on the traditional golden triangle – Oxford, Cambridge and London – with the North compet- ing for a distant second place neck and neck with Scotland. In fact, none of the 40 major life science fund raisers in the UK can be found in the North. And that’s why the ‘Golden Triangle’ scooped up more than 80% of all funds raised between 2012 and 2016, According to the latest BioCity


annual report, the body that moni- tors life science startups and business incubators, funds in the North are “no doubt making a positive contribution to the development of local life science industries but do not have the capac- ity to invest in tens of millions – the eternal challenge for regions outside the South East.”


ONE NORTHERN firm well aware of the situation and making significant attempts to bridge the gap is Slater Heelis, the law firm with the only dedi- cated life science team to be found in Manchester, all its rivals opting to keep their specialists in London or Cam- bridge. The expertise of the practice’s life sciences team – of which two thirds are also biomedical graduates - saw Slater Heelis complete 19 development capital transaction last year raising more than £50m of seed and early stage funding for clients. Simon Wallwork, a Partner in Slater


Heelis who is Head of Life Sciences, has an unrivalled track record in the sector which goes back two decades to the time “when little was happening and so most law firms weren’t inter- ested in the sector”. He has become a significant player


in the North, acting for more than 35 life science companies in investment capital deals over the last two years and being embedded as a member of the Strategic Advisory Board of Bionow, the voice of life sciences in the North.


He has also worked with Manchester University, Liverpool University and Alder Hey Children’s Hospital on their commercialisation strategies. Wallwork has been instrumental in


helping his clients buck the trend of the funding divide which has left the North as the poor relations, with one deal last year raising £10m for Blue- berry Therapeutics, one of the North’s rising stars. The Slater Heelis team has assisted


in enabling Blueberry to evolve from a start-up to a company poised to deliver a revolutionary non-harmful spray for a market leading treatment for fungal infection of skin and nails which in its original tablet form in extreme cases has potentially fatal results. The fund- ing though did not come from the UK, but from China - with China Medical Systems providing the £10m as part of a commercialisation agreement. Slater Heelis has already this year


been involved in fund raising for Redag Crop Protection. This has also seen Redag sell some of its lead prod- ucts to Globachem, a Belgian based pharmaceutical company.


AS A RESULT of the difficulty in finding UK later stage funds, Slater Heelis has also been acting where crowd funding, increasingly impor- tant in the sector, is involved. Client Liverpool Chirochem, which produces small molecules for R&D, turned to crowd funding to raise money initially before completing a funding round with a syndicate including Deepbridge Capital, Praetura and Maven. Wallwork sees many challenges for


the North in terms of access to funding and believes change is necessary to achieve a level playing field with the South. He is calling for: l The development of more Funds that are prepared to take a “patient capital” style of investment, similar to that in the US. (Such funds are pre- pared to take a longer-term view on the investment rather than the three to five year investment criteria that are used by most UK funds) l Establishing later stage funds in the North of England so that companies that have raised early stage funding have the next tier of funders on their doorstep. Brexit is also causing concern, in that Wallwork would like more clarity


“All we need now is for the later stage funders down south to wake up to what’s going on up North” Simon Wallwork


SLATER HEELIS


FUTURENORTH


9


on how the EU funding that forms the basis of most life sciences early stage funding is replaced post Brexit. Simi- larly he believes the uncertainty sur- rounding the regulatory environment post-Brexit both in terms of drugs and medical devices is harmful. Not that it is all doom and gloom. Wallwork believes that the contin- ued investment in infrastructure at


Building a relationship


Slater Heelis, though not one of the big players in the corporate league, is a law firm that punches far above its weight in terms of life sciences in the North. This is due to the approach taken by Simon Wallwork and his team - of not seeking out winners but looking after a number of start-ups “pyramid style” with the objective of as many as possible rising to the top.


Unlike rival larger firms, Slater


Heelis does not operate on time, billing, and recovery targets but invests its time at an affordable price with rewards to come in the form of longterm relationships. And last year alone saw a high success rate in terms of acting for clients including: l Manchester Imaging, a dental diagnostics spin out from the


University of Manchester, where Slater Heelis steered the firm through its third investment round with Catapult Ventures and Mercia. l Reed Medical Holdings, a supplier of orthopaedic footwear to the NHS, which involved a management buy-out from the former owner who retired after 50 years. l Apex Molecular saw Slater Heelis


advise on investment in the company by GM & Cheshire Life Sciences fund and angel investors. l BiVictrix Therapeutics, a biotech focused on developing novel antibody drug conjugates to target unmet needs in blood cancer saw Slater Heelis advise on investment from shareholders including DBW Investment and Alderley Park Ventures.


many of the Northern universities, Manchester Science Park, City Labs, Daresbury Innovation Centre – along with the continued excellence in aca- demic research in the universities - is all making a significant contribution. He also is convinced that the


increasing expertise in the support network and the success of BioNow in developing the ecosystem in the North


will play a major contributory factor in any success story. What also pleases Wallwork is the growth of early stage life science funds in the North such as Catapult Ventures, Alderley Park Ventures, Maven, Deepbridge and Praetura. “All we need now is for the later


stage funders down south to wake up to what’s going on up North,” he said.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12