Scottish Investment Bank case study: NuCana
NuCana is a clinical-stage biopharmaceutical company focused on significantly improving survival outcomes for patients with cancer. Scottish Investment Bank’s early funding of £2 million helped leverage major investment for the Edinburgh company.
In October 2017 NuCana plc raised $114 million through an Initial Public Offering of shares on the US Nasdaq valuing the company at approx. $550million. The listing positions NuCana to continue its rapid growth, with the aim of getting new life-saving cancer drugs to market as quickly and efficiently as possible.
When Hugh Griffith set up the company in 2008, he had recently sold BioEnvision, a highly successful company, also based in Edinburgh, that had developed and commercialised a new medicine for the treatment of children with acute leukaemia. In the 10 years since then, he has taken NuCana from a start-up with 3 employees to have a staff of 20 at the Edinburgh headquarters and a total team of 50 worldwide.
Transforming cancer drugs
NuCana aims to transform some of the most widely prescribed chemotherapy agents, nucleoside analogs, into more effective and safer medicines. Using proprietary technology, the company is developing new medicines, ProTides, designed to overcome key cancer resistance mechanisms and generate much higher concentrations of anti-cancer metabolites in cancer cells.
One of the drugs under development, Acelarin, is currently being evaluated in a number of different clinical studies including biliary tract cancer, ovarian cancer and pancreatic cancer.
Early investment
The first year of the company’s development was funded entirely with private investment, but it was clear to CEO Hugh Griffith that additional finance was essential. “Initially, we invested our own capital while we secured the ProTide intellectual property. However, I was aware that larger scale funding was needed to exploit this technology platform.” In 2009 Hugh set up Alida Capital International as a business angel syndicate – a vehicle for his own and others’ investment. This was also the point at which Scottish Investment Bank (SIB) recognised the potential of the company and became co-investors with Alida.
Between 2009 and 2011 SIB invested a total of £2m over several rounds of finance. Hugh comments, “SIB’s involvement in the early rounds was really important to us. At that time, we were a small biotech company and our development programme was at an early stage. SIB’s ability to match our own investment and its commitment to NuCana helped us reach the point where we could attract institutional finance.”
Clinical studies
“We used the funding from these first rounds to take our drug, Acelarin, into the clinic and begin to treat patients with advanced cancers. The fact that the safety profile proved acceptable and we were beginning to see early signs of efficacy gave the venture capital community confidence to invest.”
Venture Capital, then public company
By April 2014 NuCana were in a position to raise $57 million in a Series B round led by US venture capitalists.
The successful growth of the company over the next three years led to NuCana being floated as a public company in October 2017. Hugh explains, “We chose Nasdaq because of its global leadership position in listings for biotech companies and the access it provided to US investors”.
The US listing has launched the next stage of NuCana’s development with high profile institutional investors such as Capital Research Global Investors, Capital World Investors, Baillie Gifford, Alliance Bernstein and UBS Asset Management participating.
The $114 million raised on Nasdaq is the largest ever IPO for a Scottish life sciences company.
NuCana is now fully funded into 2020 and can continue with its drive to make the next generation of anti-cancer drugs available to a global market.
With headquarters at Edinburgh Park, the company recently opened an office in Boston.
Positive relationship
Summing up working with SIB, Hugh commented, “Our relationship with SIB has been positive and supportive throughout. It is characterised by open communications where we discuss both the successes and the challenges. Rhona Bree has been an observer on our board on behalf of Scottish Enterprise. Her support and judgement has been extremely valuable, right from the start.”