UK Biotech Entrepreneur Forms Active Seed Fund

Alan Goodman, one of the UK’s leading biotechnology entrepreneurs, has formed a seed- and early-stage fund for biotechnology and healthcare ventures in the UK and elsewhere in Europe. Ultimately, he seeks to create a pool of GBP20 million (euro 30 million) to support the formation of companies based around leading-edge bioscience technologies.

By its mid-April first close, Quantum Healthcare Fund (QHF) had raised GBP12 million from investors including 3i Group, British Technology Group, the University of Cambridge and Advanced Technology Management. The fund also received support through the EU’s Growth and Employment Initiative.

Despite its name, Cambridge-based QHF is unrelated to the other Cambridge Quantum Funds, and Alan Goodman says that the fund and its manager will be renamed shortly.

Neither is Alan Goodman particularly happy with the “fund” appellation, which he feels gives a misleading impression of passive capital. QHF will play a leading role in the formation of companies, providing the specialist commercial, strategic and financial skills needed to create a successful biotechnology company.

Alan Goodman has scored many successes in the past with this “proactive commercialisation” approach. He is founder or co-founder of a number of biotechnology companies including peptide Therapeutics Group, Oxford BioMedica, Core Group, CeNeS, Amura and Lidco, and is an investor in several others. In 1991, he developed Advanced Technology Management, which was instrumental in the formation of Chiros (now Chiroscience Group) and has completed several other significant deals in the healthcare sector.

The boards of fund’s manager, Quantum Healthcare Fund Manager (QHFM) and the fund’s scientific advisory board, bring together individuals with a wealth of scientific expertise and relevant industrial experience. QHFM’s chairman is Alan Smith, a former chief executive of Anglia Water. Dr Daniel Roach, a long-time associate of chief executive Alan Goodman, is a non-executive director, as are Barrie Haigh, another successful healthcare entrepreneur; David Kirk, formerly of Arthur Andersen; and Anthony Ross of 3i. Nick Pope, formerly of Chiroscience, is a director and he will be supported in the day-to-day technical and commercial assessment of proposals by Joy Duffin, a veterinary toxicologist with clinical development experience.

Professors Robert Hider, Alan Kingsman, Salvadore Moncada, Ivan Roitt, Ian Stratford and Bernard Testa form the scientific advisory board.

QHF’s main areas of interest are the development of therapeutics for areas of high unmet medical need, such as cancer and inflammatory, bone and metabolic disorders; drug delivery systems and medical diagnostic and imaging devices; and new enabling technology platforms in fields such as combinatorial chemistry, functional genomics, proteomics and gene therapy that will eventually bring forth new generations of therapeutics and diagnostics.

Although the UK is QHF’s primary target market, it will invest throughout Continental Europe. The managers have access to 3i’s European office network and resources to help generate and handle Continental deal flow, while QHF’s international scientific advisory board should also act as a conduit for potential investment opportunities from outside the UK. Alan Goodman said that 3i has already referred potential deals from Italy and Germany to the fund. QHF has also examined opportunities in Switzerland and Italy that were channelled via the scientific advisors.

Like 3i, the other investors that signed up for QHF’s first close will take an active interest in the fund’s operations. Alan Goodman described the participant line-up as unique, in that all the capital providers are potential sources of follow-on funding for companies seeded by QHF; he added that QHF investors will get first crack’ at the fund’s investees when they require additional financing.

QHF has already received indications of interest from two major institutions that should add a further GBP6 million to the fund. Alan Goodman said that both groups, which are involved in the later-stage bioscience field, would also be active strategic investors. The remaining GBP2 million of the fund will probably be raised from non-strategic financial investors, Alan Goodman said.