Mercia makes follow-on investment in fast growth biotech

Specialist funder Mercia Technologies has completed a £2m follow-up investment into one of its portfolio businesses.

The Warwickshire funder, focused on innovative technology businesses with high growth potential, has ploughed the money into Oxford Genetics, a synthetic biology company helping to design, develop and produce virus and protein-based biologics to support leading therapeutic companies.

This investment is part of a £7.5m funding round which also sees a new investor, Invesco Asset Management joining the syndication as a partner.

Invesco is one of the largest investment managers in the UK and Mercia said its involvement in this funding round demonstrated the significant potential seen in Oxford Genetics.

Mercia has worked with Oxford Genetics since 2012, initially investing via its third-party managed funds before becoming an Emerging Star direct investment in December 2015. This latest funding round increases Mercia’s total direct investment to £4.7m. Mercia’s direct equity stake following this funding round is 40.5%.

Proceeds from the investment round will be used to further expand Oxford Genetics’ operations in the US with the opening of a new office in Boston, as well as extending its UK research and development facility.

In the last 12 months Oxford Genetics has signed a number of out-licensing deals, including two separate collaborative co-development partnerships. In the same period it has also filed five patent applications, all in the fields of improving the discovery, development or delivery of biological therapeutics. It has also been awarded £1.9m in non-dilutive government grants to support its research and development work.

Ryan Cawood, CEO of Oxford Genetics, said: “The next few years for Oxford Genetics will be exciting. The industry for complex biologics has taken such huge steps forward to delivering real patient benefit and we are pleased to be providing our technology to many of the companies tackling some of medicine’s most important unmet needs.”

Mark Payton, CEO at Mercia and board director of Oxford Genetics, said: “This sector is growing rapidly, driven by pharma and biotech companies’ relentless drive for new therapeutics. The commercial validity of the business has been recently supported by a string of technology licence agreements. This syndicated investment alongside Invesco reflects our confidence in Oxford Genetics’ strong position and its ability to deliver shareholder value in the medium term.”