Independent Review of University Spin-out Companies

21 Nov 2023

The University of Manchester Response

The University of Manchester welcomes the Independent Review of University Spin-out Companies published today (21 November). Professor Irene Tracey and Dr Andrew Williamson have set out the important contribution that UK universities are making to the economy and society through commercialisation of intellectual property generated by their research.

They have recognised the multiple set of actors and processes that need to combine in a successful innovation ecosystem to support founders in the journey from invention to forming a spin-out and then successfully scaling up the company. The Review’s recommendations provide important guidance on the pathway to building a world-leading innovation ecosystem that takes full advantage of national strengths across all of our areas of research excellence and of our regions.

The University will review its intellectual property policies and practice, in collaboration with our partners in the Northern Gritstone investment company, which was established as a positive response to the high concentration of VC funding in London to provide VC funding in the North. We recognise the distinction the report makes between intellectual property intensive areas such as the life sciences and the simpler pathway for some software commercialisation. We welcome the recommendation that the starting point in negotiations should be terms set out in the USIT (University Spin-out Investment Terms) Guide produced by the TenU group of national and international leaders in university research commercialisation (of which Manchester is a member).

Innovation is a core theme for the University. Working through our technology transfer subsidiary, the University of Manchester Innovation Factory, we have produced 16 spinouts in the past two years and were in equal first place for this number in 2021/22.

Examples of successes include:

• Complement Therapeutics (CTx), founded in 2021 to develop the treatment of a leading cause of blindness and other complement-related diseases. The company has been through two funding rounds raising €77m to work on clinical proof-of-concept. This recently won the Series A Finance Raise of the Year at the European Lifestars Awards.
• Holiferm, founded in 2018 which develops processes to manufacture sustainable biosurfactant products for use at commercial scale and has recently opened a commercial plant on a 90,000 sq ft site in Wallasey.
• Watercycle Technologies currently in its second investment round which produces advanced membranes and innovative filtration systems for the production of valuable minerals (including Lithium) and clean water.

The University also supports student start-ups (typically 35 a year with 280 in operation, an 80% long-term survival rate) through our Masood Entrepreneurship Centre. Students own their IP so concerns about equity stakes are irrelevant for this important part of the landscape.

A recent example of success is:

• Graphene Innovations Manchester, this month awarded The Spectator’s Innovator of the Year Award for Excellence in Sustainability recognising its groundbreaking developments in the use of graphene to produce a form of polymer-based concrete which reduces carbon emissions by 88%. The company has secured a $1 billion plus joint venture with the Qazar Investment Company to build a factory in the United Arab Emirates.

Our spin-outs benefit from the innovation ecosystem the University is working with partners to build including:

•  Northern Gritstone which has raised £312m to invest in IP-rich start-ups (principally from the three founding universities: Manchester, Sheffield and Leeds) in the North of England;
•  ID Manchester, a £1.7 billion innovation district which will provide an ideal base for spin-outs and scale-ups to interact with large corporates; and
• Our extensive range of business-friendly facilities which give start-ups access to equipment and expertise normally only available to multinationals. These include the Graphene Engineering Innovation Centre, the Henry Royce Institute, the Manchester Institute of Biotechnology, the Christabel Pankhurst Institute for Health Technology and Innovation and the Turing Innovation Catalyst.