The Group recognises that other universities, research institutions and companies may create intellectual property that competes directly or indirectly with that generated by Imperial College London and the Group’s other partners. The Group aims to identify competition and, where appropriate, will seek to pool intellectual property to ensure that its IP proposition is competitive and strengthens its commercial activities. Alternatively, the Group will seek to license out technology rather than establishing a new company competing with an existing business.

A number of companies provide commercialisation services to universities in the United Kingdom. These companies operate a variety of business models and include IP Group plc and Fusion IP plc.

The Directors believe that the Group possesses a number of strengths within its business model that are especially attractive in combination. In particular, the Group:

  • has proprietary access to IP generated at Imperial College London, one of the highest ranked universities in the world approximately 75% of whose research-active staff work in departments awarded a 5* rating under the Research Assessment Exercise;
  • has access, through Imperial College London and its associated Academic Health Science Centre, to the largest medical school and one of the largest groups of hospitals providing teaching and patient care in the UK;
  • has a strong focus on developing technologies for industry applications and has established efficient and effective use of Imperial College London’s relationships;
  • maintains a close working relationship with a number of multinational corporations that interact with Imperial College London;
  • is located at the heart of Imperial College London’s main campus;
  • operates an integrated business model from the early assessment of ideas and protection of intellectual property, product development and licensing to the creation and investment in technology businesses;
  • has an experienced senior management team, the members of which cover complementary disciplines including business development, technology licensing, intellectual property, new venture creation, portfolio management and investment;
  • has access to proof of concept funding and seeks to demonstrate technical and commercial viability as part of its process;
  • is able to lead or co-invest in opportunities and can follow through from seed through series A and B and so maintain both influence and significant stakes in its key portfolio companies.

During the year, the Group reviewed its business in the light of current economic conditions and refined its strategy to focus on the more valuable technologies and companies. It reduced operating costs and scaled back some of its activities to reflect this review.

There are a number of potential negative impacts of the current economy on the Group’s business that need to be managed. Mitigation has been sought for these impacts.

  • The availability of fewer co-investors at early stage for our companies. Mitigation: a number of close relationships with investors across different stages are in place, and the Group has been seeking to build more relationships in Europe and the USA.
  • Technology companies may take longer to raise money and may find it more difficult to sell products. Mitigation: ensuring that companies are not formed until funding can be raised to take them to a clear value inflexion point and only moving companies from the capital efficient environment of the incubator when co-investors and sufficient funding are in place.
  • Technology transfer revenue, in particular upfront licence fees are more difficult to secure. Mitigation: cost reduction exercise reduced the cost in this area in anticipation of lower upfront fees. In addition, the Group’s approach is to focus on securing the right long-term partner rather than on up-front payments, as downstream royalties are likely to be more significant and the right partner will often apply substantial resource and funding to developing and commercialising the technologies.

There are also a number of positive impacts of the current economy, in particular:

  • Availability of management talent, both in terms of experienced entrepreneurs who have exited start ups and industry experienced people to complement this talent.
  • There is a focus on government support for SMEs, for example funding available from the Technology Strategy Board.
  • Company valuations are attractive, making it less costly to increase the Group’s stake in its key portfolio companies.

The main source of ideas – Imperial College London – continues to lead the field with initiatives such as the Academic Health Science Centre, which brings together research, teaching and the treatment of patients. However, the current climate is more challenging in terms of securing research grants from industry, government and other sources.