Commercial Break – How Queen’s became the UK’s No1 University for Entrepreneurial Impact

In 2019 Queen’s beat Oxford, Cambridge and London to become the UK’s number one university for research spinouts. Read below for the inside story with input from Helen McCarthy, CEO, pHion Therapeutics, Brian McCaul, CEO QUBIS, Paul Kerr, CEO, Fusion Antibodies and Dame Rotha Johnston, CBE, Chair of NI Screen and Head of QUBIS Investment Committee 

Article first featured in: The Graduate – The magazine for friends and graduates of Queen’s University Belfast, Autumn/ Winter 2020/21 Edition.

When Helen McCarthy won the InterTradeIreland Seedcorn Investor Readiness Competition three years ago, she knew straightaway what she wanted to do with at least some of the €100,000 prize.

“I booked a place at a commercial conference on drug delivery systems in Boston, MA. At the time, eyebrows were raised at using the budget on a trip, but marketing was crucial. I wanted to put our technology in front of the big pharma companies. On the basis of the contacts I made there, we secured multiple collaborations and commercial contracts over the next year.”

Helen McCarthy
Helen McCarthy

Helen McCarthy, Founder & CEO, pHion Therapeutics 

Today, as well as leading her team in the Queen’s School of Pharmacy, Professor McCarthy is CEO of pHion Therapeutics, the drug delivery company she founded and incorporated with encouragement and support from QUBIS, the commercialisation arm of the University. Now employing 10 people locally, pHion Therapeutics recently received a £50,000 grant from the UK government’s Fast Start scheme to help work on a drug delivery programme for Covid–19.For McCarthy, QUBIS has provided a vital launch pad. “Through their network I have met some fantastic people, including the current Chairman of our Board, Dr John Fox, who is based in Bristol. It is challenging to be a CEO, especially in the life sciences, but I have had tremendous support.” She has also been able to resist the lure of relocating to the US or England. “It would have been really easy to move to Boston, or to Cambridge. But I want to build our bio–tech business right here in Northern Ireland. You have to be a fighter to make your idea a success.”

For the CEO of QUBIS, Brian McCaul, this is just the mindset he and his team are looking for.

“People recognise the importance of building more tech companies here in Northern Ireland, and as well as internal support our academics receive plenty of backing from local entrepreneurs. But we also recognise the importance of international links and collaborations, so we always look outwards as well as inwards.”

Their work has been so successful that one of Europe’s leading venture capital companies, Octopus Ventures, put Queen’s top of the class in its inaugural ranking of the success of UK universities in commercialising academic research. Queen’s scored especially well, beating Cambridge University into second place, when it came to the two key issues that financiers look at when it comes to backing academics– production of spinout companies from the original idea, and, vitally, successful exits relative to total funding received. McCaul puts a lot of their success down to sheer hard work with limited resources.

Brian McCaul
Brian McCaul

Brian McCaul, CEO, QUBIS

 “Our work rate has always been a crucial factor compared to the larger universities. We may not be the size of Oxford or Cambridge but, when it comes to making money, however you cut the numbers we come out top of the pile. I think we are one of the few universities that attracts greater investment than the size of our research base, and generates more in terms of turnover annually from our spinouts than the cost of the research inputs. This is a very lean model.

“The QUBIS archetype for success is a team of four: an early career researcher supported by the professor behind the idea in the background; an external entrepreneur; and a tech transfer company. “Academics have multiple competing priorities,” McCaul points out, “and they don’t always have the space needed to focus full time on driving the business forward as well.

“It takes a village to raise a start up and it is important that everyone involved has some skin in the game. There can be some delicate conversations along the way as webring in external management and investment, although every so often a high–flying academic takes the lead.”

Often, though, QUBIS finds itself acting as an executive search company, bringing in the right individual to take the company forward to the market at the right stage. McCaul points to the recent successful seed funding achieved for Re–Vana Therapeutics, a University spinout drug delivery company focused on the treatment of chronic eye diseases such as age–related macular degeneration and glaucoma.

Alongside early investors QUBIS and Invest Northern Ireland, three specialised US ophthalmic venture capital funds came together as backers in the US$3.25m two–tranche funding round. “This was the first time all three of these specialised funds had invested in the same company,” says McCaul. But to get to that stage a great deal of work has to go on behind the scenes – and it takes time.

Dr Paul Kerr is CEO of Fusion Antibodies, a listed company which was born 20 years ago in Queen’s laboratories. He met the company’s founder, Professor Jim Johnston, soon after graduating with a degree in Veterinary Science from Green mount (now CAFRE). “I went for a post doc interview and came away as Fusion Technologies’ second employee. And QUBIS were with us from the very beginning, right through to our successful IPO in 2017.”

From the outset, Kerr remembers, QUBIS asked the right question – why? “Professor Johnston had been working in the US and had seen the future of precision medicine in oncology. But it was early days and the people from QUBIS made us focus on specifics: who will the patient be in seven years time? How will doctors use it? We really had to think about how our discoveries fitted into the medical world, not just academically but commercially. And to keep control – patent before publication, which is not the natural academic way. The science has to be good, but you also have to learn to sell your wares.”

Paul Kerr
Paul Kerr

Paul Kerr, CEO, Fusion Antibodies

When the credit crunch hit in 2008, QUBIS was by Kerr’s side. By the time he became CEO in 2011, the company was pivoting to become a service provider in contract research for antibody engineering. “We were able to learn from protocols already in place. QUBIS are in it for the long term, unlike the typical venture capital firm, but they knew how to talk to other investors and introduce us to the right people. They have been steadfast, but it is a symbiotic relationship. The University benefits from our success.”

The success of QUBIS feeds into that of the entire Northern Ireland region, and from the outset the University has put its own money behind the University spinouts. Leading local entrepreneur and Chair of Northern Ireland Screen, Dame Rotha Johnston CBE (BA Italian 1983; LLD 2016), had just graduated from Queen’s when QUBIS was founded in 1984. Today she leads its Investment Committee, taking vital decisions as to which ideas to back with the University’s cash.

Rotha Johnston
Rotha Johnston

Dame Rotha Johnston, CBE, Head of QUBIS Investment Committee 

“As a student back in the 1980s, I was aware of the University’s mission, to contribute to the social and economic benefit of Northern Ireland. But my recent key takeaway from the Octopus Report was just how far–sighted Queen’s was 12 years ago in deciding to put £2m into equity in University spinouts.

“The benefits of those strategic investments are being felt right now. There is a very solid social network in Northern Ireland and Queen’s is a not just a part of the economic system but a key driver. It plays a very important role in attracting inward investment to the region.” By the time Dame Rotha’s Investment Committee becomes involved, their eye is on viability, impact on society and the potential stream of revenue generation from the spinout. A solid track record builds its own success, she says. “And I have first–hand evidence of how a lot of that is down to how QUBIS operates, managing the process to create the right team for a successful spinout, which in turn gives confidence to potential investors.

”There is no doubt it is tough for academics to succeed in a competitive marketplace, says McCaul. “Of the hundreds of ideas that come to us, there is a heavy attrition rate. Only one in perhaps 30 even make it through to the first stage. But we have participated in five deals this year, with at least five more on the stocks. We have created three new spinouts already and plan to create another two at least. So, I have no reason to believe that the trend will not continue for a while yet!”