Inside the Work of UK Innovation Centres

A VR headset from Emteq (left) and the interactive avatar (right)

London, UK (Scicasts) – “There is a revolution going on – the global startup revolution,” writes Jean-Francois Gauthier, CEO and Founder of Startup Genome, in the latest Global Startup Ecosystem Report.

The UK government recently pledged to provide £26.3 billion to safeguard the national research and innovation base, from April 2016 to April 2021. In the meantime, London ranks 3rd among global hubs for startups, behind Silicon Valley and New York City.

However, amidst many individual success stories, we often tend to forget the supporting players in the ecosystem – innovation centres, incubators, startup hubs. They come in different shapes and forms but all aim to provide the infrastructure, sometimes seed funding and, most importantly, business advice and support to the newborn companies.

Some of these hubs (see LBIC and CGT Catapult below) specialize in a particular business area, while others (see SINC) host a variety of enterprises working on products ranging from pharmaceutical innovations to media technologies.

The London BioScience Innovation Centre

The London BioScience Innovation Centre (LBIC) is a University-owned science park/innovation facility, established by the Royal Veterinary College in 2000 with funding support from the London Development Agency. The centre has a total lettable space in excess of 26,000 ft2 and currently supports over 60 companies within human and veterinary healthcare technologies.

LBIC works with a mix of startups, established UK companies, foreign-owned subsidiaries (around 25%) and major blue chip corporations. A diverse range of companies at the centre also include ‘virtual’ clients, who do not have physical space but utilize the same services as other clients.  

Most clients sign up for a 12-month licence agreement allowing rapid growth, and unlike some incubation centres, LBIC does not take a financial stake in client companies.

“As with any University-owned science park/innovation facility, it is essential for LBIC to add value to its owner the RVC by ensuring links are developed and strengthened between LBIC clients and the RVC research community, and that LBIC actively contributes to the College’s enterprise teaching programmes and future student employability,” says Ken Larkin, CEO at LBIC. 

LBIC actively encourages its client companies to participate in the RVC’s undergraduate/postgraduate teaching modules, commercial awareness workshops and to act as host to undergraduate/PhD industrial project placements.” 

While some companies remain at LBIC for many years, others rapidly reach a size where the centre cannot support further expansion and so a business may move out or take additional space elsewhere. “This is generally a challenge for London as a whole, where demand for affordable commercial-grade laboratory space far outstrips supply,” says Larkin.

Sussex Innovation Centre

Sussex Innovation Centre (SINC) is another University-owned innovation hub hosting a range of companies at different stages of development.

SINC was among the first to be established at a university campus in 1996. Back then, the word “entrepreneur”, instead of being a badge of honour, simply meant a different way of saying that someone was unemployed. Most of the existing facilities would provide office suites for long-term rent and leave the founders to get on with their business.

“We decided that we wanted to be different,” says Mike Herd, Executive Director of SINC. “Instead of just providing office space, we wanted to create an ecosystem to support local talent and help local business ideas flourish.”

The Brighton economy in the mid-90s was essentially failing, he explains. Promising companies, especially technology and electronics startups, were fleeing abroad and the two local universities had little or no connection to the business community.

“Our aim was to create an ‘academic corridor’ which would link local authorities and educational organizations, placing focus on the universities as a new way of driving the economy,” says Herd.

Their questions at the time were how to use the land, resources, university graduates and the whole ecosystem to help create a better economy.

“Originally, the idea was to replicate the business model of the innovation centre in Cambridge,” says Herd. “However it quickly became clear that we couldn’t just apply the same model as we were starting at a slightly lower point.”

One of the key points of the Cambridge model was to create an innovation centre as a company and focus on sustainability and (potential) future profit. The founders of SINC decided to start from there.

The University of Sussex provided the land for the project, while Asda Foundation, Sussex County Council, Brighton & Hove City Council and EDF energy (formerly known as Seeboard) sponsored the construction of the original building. The income generated from the rent subsequently allowed to move the business forward.

“At the time, there was very little accommodation available to businesses, which wasn’t on a 5-year lease contract,” explains Herd. “This imposes a restriction on growing companies, which may need to move in and out of the office space on a short, one-month notice. Nowadays, there are all kinds of hubs, incubators and co-working spaces which simply didn’t exist back then.”

However, providing businesses with flexible accommodation was only the first step. Herd and his team envisioned creating an environment where companies would receive the necessary support and gain access to the local business and investment network.

The center now works with startups at different stages of development, from a one person enterprise to established businesses ready to scale up. The campus also hosts small teams from global corporations, such as American Express, as well as service providers – lawyers, financial advisors and marketing support firms.

Membership options at SINC vary from a ‘virtual office’ membership, where the company may use the centre as their official business address, to a full-time tenancy with a dedicated office space within the building. Every company applying for a tenancy is interviewed and evaluated on a number of criteria.

“Every one of our members is an innovative and ambitious company,” explains Joseph Bradfield, PR and Communications Manager at SINC. “To join the centre as a startup, you need to demonstrate a strong growth potential.”

Chris O’Hare, CEO at digital agency, brought his business idea to the centre three years ago, after winning the 2015 StartUp Sussex Award and receiving £10,000 to develop his project.

“Our experience at SINC has been amazing,” says O’Hare. “They gave me a lot of confidence when I started my company. They were the ones who literally told me – go off and do it, and they were there at every step of my journey.”

The company achieved over 400% growth in their first year and O’Hare was named The Graduate of the Year at the Sussex Business Awards in 2016. The team currently consists of twelve full-time employees and they are aiming to hire another four in the upcoming months.

Some other startups at SINC began as academic projects and, with the help of the centre’s supporting team, turned into successful enterprises.

“While some universities often take the traditional route of commercializing the IP produced by their academics, we would rather see our researchers take their innovations to market themselves,” says Herd. “Of course, there are cases when academics don’t have the time to set up a business or would rather continue doing fundamental research. But if a scientist is willing to develop their idea into a product, we are here to ensure that they succeed.”

The supporting team at SINC takes a personal approach to every project brought to them by researchers. Instead of running large-scale training events, they work with individuals on a case to case basis, to ensure they equip academics with the necessary entrepreneurial skills.

“We try and teach academics to think in business terms,” explains Herd.

Among innovations which eventually led to the development of several commercial technologies is the project by Professor Robert Prance and his team in the University of Sussex Department of Engineering.

The researchers were studying the behaviour of low-temperature quantum circuits and designed a sensor capable of detecting minute changes in spatial potential, electric field or charge. In comparison to their technology, traditional potentiometers and electrometers have a limited degree of accuracy, while more sophisticated tools are too cumbersome for everyday use.

Professor Prance brought his findings to the University’s Enterprise Panel, who then asked the Sussex Innovation Centre to support them commercializing this research.

The SINC team identified an opportunity in the market for home medical care and connected the scientists with the microchip manufacturer Plessey Semiconductors. The company procured a full licence to manufacture and market the technology in 2012.

The sensors were incorporated into a range of Plessey’s products, including a portable tool that can be used to take an instant ECG reading at home and transmit the results to a smartphone or laptop, before sending them to a clinician.

Several years later, this electric potential sensor (EPS) drew the attention of Charles Nduka, a consultant plastic and reconstructive surgeon, who was looking for new technologies that could potentially facilitate recovery of facial palsy patients.

Together with serial entrepreneur Graeme Cox, they identified several new applications of EPS – its capacity to interpret electrical signals from the human face, recognizing people’s emotions and measuring attentiveness.

Nduka and Cox founded a company, Emteq, in summer 2015 and based their business at the SINC campus. After using a virtual membership option for several months, they hired the core team and moved into an office space with a fellow startup, Agile App. Their team soon expanded and the company filed several patents for their technology.

Their product incorporates elements of virtual and augmented reality and connects a patient with a simulated avatar on the computer screen. The avatar, which ‘senses’ facial expressions through a set of sensors in the VR headset, mimics the patient’s emotions and allows them to work on retraining their facial muscles following reconstructive surgery.

The company have to date secured funding totalling over £1.3m, and are currently in the process of raising a seed funding round, aiming to bring their VR and wearables products to UK and US markets in early 2018.

Special deal – Catalyst programme at SINC

Once the membership, business network and knowledge transfer schemes were in place, the SINC team noticed another issue.

“We were awarded HEFCE funding in October 2013,” says Lucy Paine, the Catalyst program manager at SINC. “The fund was dedicated to facilitating innovation, education and training at the centre. Most universities use it to sponsor their research projects, while Mike [Herd] saw this as an opportunity to bridge the gap between growing companies, who need additional support, and students, who need work experience.”

The Catalyst team asked for a small amount of funding to test their theory. They hired a handful of placement year students and graduates, providing them with a one-year full-time contract, and set out to survey the innovation centre members about the kind of tasks they may need help with.

Most startups have a large amount of small projects, especially around marketing and sales, but they rarely have enough funds to hire full-time employees, explains Paine. They could outsource this work to contractors, but this often comes with the burden of management logistics and trust issues.

“When the Catalyst concept was set up, it was just a blank page,” remembers Paine. “On my first day at the job in 2014, I was interviewing four new team members but no one knew what they were going to do. At my subsequent meetings with clients I would describe them the Catalyst project and ask – if you had this opportunity, how would you use it?”

The initial theory – that growing companies may have a need for fully-managed, highly skilled, part-time workforce – quickly proved itself and the projects began pouring in.

“We have already had three successful intakes of students, some of which were later offered jobs at companies they worked for. In fact, one of our members has just resigned today,” smiles Paine.

The projects undertaken by the Catalyst students now range from market research and maintaining social media to data mining and business development. Some projects only require a couple hours of a student’s time per day, while others involve up to several weeks of full-time work.

Among many success stories of the Catalyst students, one stands out in particular. “In the first year of Catalyst, we had a student called Charlie, who worked for a company that spun out of the university,” says Liam Ward, Project Manager at the Catalyst. The company was originally set up at SINC campus and was developing software solutions for sports fans.

“It was originally an academic project, and the founders came to the Catalyst team seeking support with their data and customer account management,” remembers Ward. ”They were very early stage. Charlie worked with them for about half year and just when he was about to leave, they offered him a full time role.”

The company was soon bought by InCrowd, an established sports management enterprise in Brighton, which provides a range of software solutions to improve in-stadia experience for sports clubs, fans and sponsors.

“Suddenly it went from a small university spin out to a 35-people company in the middle of Brighton,” says Ward. “Charlie had become one of the senior team members and got so busy that he came back to Catalyst and asked for another student.

“So our new student, Ella, started working with Charlie, doing a lot of data management work that he was doing a year earlier. The company then offered Ella a full time role, so a Catalyst member effectively hired another Catalyst member.”

Charlie Gorton is now Scrum Master at InCrowd, involved in various aspects of business development and social media maintenance. Ella Whitcomb has become Data Analyst at the company, looking after the performance of the club and FanScore apps.

The Catalyst program now receives around 80 applications from students for every intake and they accept 10-12 students for each batch.

“We interview every one of them,” says Paine. “It’s more about their character and their stories and what Catalyst can do for them – whether they want to be an entrepreneur, learn more about themselves, build confidence or apply their skills in a real world environment.”

“We are looking to build an all-rounded team each year,” adds Ward. “We accept students from every school at the campus because this way we can provide a combination of skills, suitable for different kinds of projects we work on.”

The students have a short half-day orientation upon joining and then each of them is assigned a project. Every client is fully managed by a senior team member, who supports the students in their work. Students also receive soft skills training, such as workshops on business writing, sales and marketing or personal development and branding.

All students are officially employed by the Innovation Centre, on a fixed-term contract including 25 days of holidays per year and paid sick leave.

“It is expensive to live in Brighton and most of our students simply can’t afford unpaid internships,” explains Paine. “Offering salaries also means that we attract talent, because, if you are not paying the graduates, you simply don’t get the same level and quality of work.”

Clients pay hourly rate to the Catalyst Program, which at the moment ranges within £14-20 per hour.

“It’s very cost-effective for companies, compared to hiring a contractor, but it still costs over £20 an hour to run the Catalyst,” says Paine.

Do they think this model is sustainable?

“We are not expecting the Catalyst to become profitable,” says Paine, “but we would like to reach the point where the spending breaks even. Given the amount of value that Catalyst provided to our students and our clients, we think that by now Catalyst is embedded into the concept of the innovation centre itself.”

Innovate UK – Cell and Gene Therapy Catapult

By early 2000s, when the concept of university-led innovation centres took off, the ‘translational research infrastructure’ on a national level was still lacking.

Dr. Hermann Hauser in his report “The Current and Future Role of Technology and Innovation Centres in the UK” points out: “The current UK approach is by comparison [to other countries] sub critical; follows no national strategy; and pays insufficient attention to business requirements and the location of relevant expertise.

“The UK has a science capability second only to the US: an undoubted source of competitive advantage,” writes Dr. Hauser. “However, it falls short on translating scientific leads into leading positions in new industries.”

The report called for a new approach to investments in a network of Technology and Innovation Centres, which would significantly impact the UK’s ability to commercialize scientific research. It also recommended that such centres carry a unique brand name, “to highlight areas of national priority to both UK businesses and to promote the UK’s innovation offer to the world.”

Today, these centres are known as Catapults.

Among candidate technology areas for the prospective Catapult centres was a young but promising field of cell and gene therapy.

“Back in 2012, when we were setting up the centre, cell and gene therapy was essentially nurtured in academia and a handful of pioneering companies, who were always struggling to raise money,” remembers Keith Thompson, CEO at Cell and Gene Therapy (CGT) Catapult.

“There were a lot of doubts such as whether you could ever get these treatments all the way through to regulatory bodies, or whether you could ever scale these technologies up and turn them into living medicines. The industry was moving faster than the regulatory environment surrounding it.”

The team identified the key barriers to the growth of the industry and set about building assets that would address those issues.

The initial CGT Catapult, residing at the 12th floor of Guy’s Hospital in London, was designed to work in three main areas – speeding up the regulatory pathways, debunking the myths around what one could and couldn’t do and facilitating new clinical trials.

“You need to have extra considerations for getting the living medicine into a clinical trial,” explains Thompson. “These products have to be manufactured reproducibly, reliably and with the kind of safety profile that people expect. You also need to understand what the reimbursable price of your product is and make sure that you can make those products and deliver them well within that reimbursement price.

“That kind of thought process simply didn’t exist at the time.”

The Catapult team set up a health economics and reimbursement group and began the work to address the industry growth barriers. They also created a database mapping all products capable of entering a clinical trial within two years.

“The database is now an annual check on where the industry in the UK is,” says Thompson. “It allows us to have a dialogue with people who have therapies undergoing a clinical trial or those who would like to enter into trials.”

The Catapult is registered as an independent, not for profit research organization and is sustained via three streams of revenue – core grants, collaborative R&D and commercial income.

“The centre has been quite complex to run,” says Thompson. “The core grant from Innovate UK allowed us to establish the main set of facilities. We also used some of that money on demonstration and pathfinder projects, to take new therapies or technologies and push them against the barriers.”

One of the outstanding academic projects ‘discovered’ by the Catapult team in their market research was a gene-modified T-cell therapy, developed by scientists at UCL and Imperial College London.

“When we first came across this project, it was stuck inside the university system and funded by a charity,” says Thompson. “So we went out and had a meeting with the scientists involved. Then, together with UCL Business and Imperial Innovations we established a joint venture company, to support the research and push the therapy into clinical trials.

Their joint venture, Catapult Therapy TCR Ltd, focused on the development of a gene-modified WT1 TCR T-cell therapy for acute myeloid leukaemia (AML) and myelodysplastic syndrome (MDS) that are known to overexpress the antigen WT1. The WT1 antigen is also present on a large variety of solid tumours, giving this treatment broad therapeutic potential.

In June 2017, the company was acquired by Cell Medica and the therapy is now undergoing phase I/II clinical trials. Early development work on this therapy, conducted at UCL and Imperial College, was funded by the UK charity Bloodwise.

“Back in 2012, there was only a handful of companies who sponsored clinical trials,” says Thompson. “Today, there are 59 trials and 40% of all trials are sponsored by companies. We have taken an essentially ‘cottage’ industry, handcrafted it and started to industrialize that process.”

Since the launch of the CGT Catapult, companies in the field have raised £1.3 Billion, and the number of companies developing new therapies increased from 22 (in 2012) to 64 (in 2017). The average time required to enter a cell therapy product into a clinical trial reduced from over a year to 30-60 days.

The infrastructure of CGT Catapult and the commercial ecosystem surrounding it also expanded.

A new large-scale cell and gene therapy manufacturing centre is scheduled to open in early 2018 in Stevenage, Hertfordshire. The centre comprises a series of manufacturing modules, each capable of housing manufacturing operations of an entire company. The UK Government’s Industrial Strategy Challenge Fund recently awarded an additional £12 million to the centre, which should allow to double the centre’s existing capacity.

“Transforming the CGT industry requires innovation not only in core manufacturing but also in logistics,” says Thompson. “Storing, transporting the living therapy into a hospital, tracking it – all requires an entire new ecosystem around the centre.”

Some of the world leading science corporations have already expressed their interest. Thermo Fisher Scientific, who recently announced a collaboration with the CGT Catapult, will co-locate their Fisher BioServices storage capacity, CryoHub, with the CGT manufacturing centre. They aim to provide developers with the manufacturing capability and distribution, logistics, and storage capacity needed to create a seamless supply chain for cell and gene therapies.

The CGT Catapult is now undergoing their first 5-year review and the outcomes seem very positive, says Thompson. The team is planning to continue with a range of investments in automation, gene delivery technologies and work with Innovate UK to develop specialist treatment centres. They will also continue investing in regulatory capabilities, especially in post-Brexit environment.

“We think that cell and gene therapy is the next big revolution,” says Thompson. “And I want the UK to be the place where it is a no-brainer to set up a CGT manufacturing chain.

“If at the moment people are defaulting to Ireland or Singapore for monoclonal antibodies, soon they will come to the UK for cell and gene therapies.”

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