Imperial Innovations creates, builds and invests in ground-breaking technology opportunities addressing large international markets. Having built a portfolio of pioneering technologies and companies through its collaboration with, and proprietary access to the intellectual property emanating from Imperial College London, 2009 was a year in which the Group began to realise substantial value from its investments.

The Board is confident that the Group has proven its approach. It is making good progress towards the fulfilment of its business objectives to generate attractive and sustainable financial returns from the commercialisation of early stage technology based intellectual property.

In the course of the year, Innovations invested over £14 million in 20 companies; its portfolio of businesses raised over £41m; four businesses were sold; six new technology businesses were funded with launch management teams; 328 inventions were disclosed; and 50 patents were filed.

This all resulted in a profit of £5.3 million and a 7% increase in net asset value, a creditable financial performance at a time of great economic uncertainty.

There were also a number of developments which were significant pointers for the future prospects of the Group.

  • Thiakis was sold in December 2008 to Wyeth, subsequently bought by Pfizer. The realisable value to the Group is potentially £22 million; and to this can be added a valuable royalty stream over a number of years. This is the first major exit achieved by the Group;
  • Three companies were sold in the second half of the year. Although the exit values achieved were small, these exits demonstrated the recognition that realising capital to enable redeployment in better opportunities is an important part of portfolio management;
  • Of the £14.4 million invested, £12.5 million was put into companies in later funding rounds, a manifestation of the maturing of the portfolio. The balance between early stage failure and later stage success is shifting to the latter.

The intellectual property pipeline is very strong. The expenditure on patents, the number of invention disclosures and the 213 as yet commercially unexploited patents are evidence of a rich pool of IP available to the Group.

Of equal importance is that most of the IP in the licences being signed and the companies being formed focuses on the great global challenges facing the world: energy usage, healthcare, communications. Breakthrough technologies in these fields are of themselves of great potential value.

In a difficult year of great financial turmoil, the list of activities outlined above and results achieved are a testament to the admirable heads-down attitude of all the Group’s employees. On behalf of the Board I would like to thank them all.

The external challenges that will be posed in 2009/10 will remain intense. Customers, financial partners and licensees will all be faced with a continuation of economic uncertainty. However, last year showed that traction is being achieved in the application of the Group’s business model. Your Board is confident that the Group has the right combination of management, financial resource and exploitable intellectual property to build on this achievement.

The Group is well positioned to deliver further exits from an array of impressive and well-managed companies in the portfolio; and the pipeline of attractive investment and licence opportunities remains strong. The Board remains confident that the momentum and good progress achieved last year will be maintained.

Dr Martin Knight
Chairman