Imperial Innovations takes £9.5M cash from Respivert sale

Sale

Imperial Innovations Group plc, the quoted technology transfer arm of Imperial College London, has realised £9.5 million in cash on the sale this week of its portfolio company Respivert to Centocor Ortho Biotech Inc.  

After revenue-sharing payments of £200,000 to Imperial College, Imperial Innovations will report a profit of £7.2m, subject to final adjustments, on the sale of its 13.4 per cent stake in the company. This compares to Respivert’s carrying value of £2 million at 31 July 2009.  

Imperial Innovations received £8.1 million in cash upfront, with a further £1.4 million being held in escrow, to be released within 18 months, subject to any adjustments. The proceeds will be used for new investments. The disposal delivers a 4.7 times return on Imperial Innovations’ investment over the three-years since Respivert was formed.

Respivert is developing a new generation of inhaled treatments for respiratory diseases including chronic obstructive pulmonary disease, cystic fibrosis and severe asthma. It was founded by Peter Barnes and Kazuhiro Ito from the Department of Respiratory Medicine at Imperial College London with Garth Rapeport, Peter Strong and John Murray, who are all former executives at GlaxoSmithKline.

The other investors are SV Life Sciences, Advent Venture Partners and Fidelity Bioscience. Innovations supported the formation of Respivert, provided laboratory space in its incubator and has invested £2 million since August 2007.  In its last reported financial year to 31 December 2008, Respivert made a loss of £3.7 million.   

Susan Searle, Innovations’ Chief Executive, commented “We are delighted to have worked so closely with Respivert over the last three years to help commercialise its technology and position it for sale.”

She added that the speed at which Imperial Innovations has delivered this return demonstrates the strength of its model. “Our first all-cash disposal, Respivert is our third significant exit and marks a turning point as our investments begin to generate substantial cash returns.”  

Respivert is a small molecule drug discovery company which has identified a novel class of inhaled medicines for the treatment of serious respiratory diseases such as Chronic Obstructive Pulmonary Disease, Cystic Fibrosis and severe asthma. The new treatments identified by Respivert will target severe, corticosteroid-insensitive lung inflammation and will offer new treatment options for patients with severe chronic lung disease.