IP2IPO, Bristol University enter 25-year agreement to spin out companies

IP2IPO Group, which specialises in commercialising university technology, said it has entered into an exclusive 25-year partnership with the University of Bristol to form spin-out companies from the university. Analysts greeted the deal as a boost for the company.

Under the agreement, IP2IPO will invest an initial fund of £5 million in Bristol companies in return for equity, according to a statement. In addition, IP2IPO will receive 13.3 per cent of the equity in spin-out companies from the university at the time that the company is established prior to investment, according to a statement.

"Signing up with universities to license their IP is pretty positive as that's their core business," said Earling Refsum at Nomura Bank. "An exclusive long-term partnership sounds very good. Bristol University is quite a highly rated university." The Bristol deal is the fifth such university agreement for IP2IPO.

IP2IPO's stock price last traded at £5.285, a drop of 0.75 per cent, on London's AIM exchange.

IP2IPO already has a partnership involving Oxford University. In return for an investment of £20 million, IP2IPO has acquired 50 per cent of the university's equity in spin-out companies and technology licenses based on intellectual property created at the university's chemistry department until 2015. In November 2003, IP2IPO created a £5 million seed capital fund for investing in spin-out companies across the University of Oxford, not just those originating within chemistry.

In March 2002, IP2IPO entered into a second long-term partnership with the University of Southampton. The partnership has a term of at least 25 years. It also entered into a similar agreement in May 2003 with King’s College London. In October 2003, IP2IPO announced a fourth partnership with the Centre for Novel Agricultural Products, based at the University of York. CNAP is a flagship research centre that specialises in plant and microbial gene discovery. Under the terms of the partnership a new company, Amaethon Ltd., has been created. Amaethon has the right to commercialise CNAP's IP for 25 years.

"This shows there is a market out there for IP management," said Refsum. "IP2IPO is just carving out a very solid niche to a slightly earlier stage of the development process. In the past a lot of universities were trying to become VCs and trying to mange their IP portfolio. They have made little progress on that front."