BioAscent Case Study
Investment from the Maven VCTs has helped BioAscent significantly upscale its capacity and capabilities as well as recruit the best talent from around the world. Since receiving investment the business has experienced four successive years of high double-digit growth.
4 successive years
of high double digit growth
44% revenue growth
1/3 increase in
headcount of specialist scientists
BioAscent is a leading provider of integrated drug discovery services. It supports BioTech and pharmaceutical companies during the discovery phase, providing outsourced expertise and laboratory capabilities in the key disciplines of biosciences, medicinal and synthetic chemistry, computational chemistry, as well as compound logistics.
The company was founded following a fortuitous event. Multinational pharmaceutical company, Merck, announced that operations at its state-of-the-art facility in Newhouse, Lanarkshire, would be phased out along with seven other research centres worldwide, as part of a restructuring programme following its merger with Schering-Plough. After an extended period the research facility was acquired by BioCity, a life science incubator and BioAscent continues to operate from the Newhouse site today.
In its formative years BioAscent played a prominent role in a public-private partnership called The European Lead Factory, which was set up to accelerate the complex and expensive process of drug discovery which is critical to developing innovative new medicines for global health challenges. Seven large pharmaceutical companies pooled their compound collections to make them available to academia and small and medium sized enterprises (SMEs) searching for drug discovery leads that could become tomorrow’s medicines. By the end of the project, the European Lead Factory had successfully built a library of over 500,000 compounds and delivered close to 200 qualified leads as starting points for new drug discovery programmes.
“That project was great for the business, but was coming to an end,” explains Paul Smith, CEO. “I joined the company during that transition period - there was a year left of the project funding but what were we going to do next?” The decision was taken to expand and develop a range of additional services, leveraging the world class infrastructure which was already in place.
Compound management services have been the mainstay of BioAscent’s success, an invaluable asset normally maintainable only by very large pharmaceutical companies. However, with a major drug discovery project nearing completion and its secure, high spec facility offering significant additional capacity, the team at BioAscent saw an opportunity to scale the business and establish itself as a fully integrated discovery services contract research organisation (CRO).
Paul and his senior team, which included Mike Piper (Chief Commercial Officer) and Sylviane Boucharens (Chief Operating Officer), realised that securing external funding was key to supporting their business plan as it could facilitate the hiring of a number of highly skilled scientific professionals. Working alongside Chair, Louis Nesbitt, and Non-executive Director, Glenn Crocker, who both have significant experience in raising venture funding, they felt they had the expertise to navigate an investment process.
Choosing the right investment partner
Choosing the right investment partner is one of the most critical decisions for any founder or CEO. Although factors such as agreeing on valuation are important, often the key consideration for any management team is that they need to be confident they can form a strong working relationship with the investor, based on trust and integrity, especially as the relationship will be in place for the medium to long term.
“We spoke with five or six private equity houses initially. When we presented to David at Maven, his background meant he immediately saw the potential,” says Paul. Maven Partner David Milroy, who led the investment and now sits on BioAscent’s board, has a PhD in Molecular Biology & Gene Delivery and started his career as a scientist with GSK. He had also completed a number of investments within the life science sector, including Blacktrace and Crawford Scientific.
“Several other investors ultimately offered terms because they could see the viability of our business plan. It was going to take a lot of effort, but we were confident it was going to work,” continues Paul. We were very comfortable with Maven which made it a logical decision and helped make the process a lot smoother.”
Investment from the Maven VCTs
In June 2018, the Maven VCTs provided an initial investment of £1.6 million to help BioAscent expand its service offering, adding complementary chemistry and biology services to capitalise on the growing trend among leading organisations towards the outsourcing of drug discovery activities rather than investing heavily in highly specialist and expensive in-house facilities. During the investment process Maven introduced Ian McDonald, an experienced Chief Financial Officer who was previously CFO at two of the UK's largest CROs. “Ian is a key member of the executive team and was a great introduction,” says Paul. The business quickly assembled a team of expert biologists and medicinal chemists, but the challenge it faced was how to break into a market which was dominated by established CROs.
“We had invested in the people, but didn't yet have the contracts. We had to get those people busy as quickly as possible and the funding from Maven provided us with the working capital to allow us to do that,” says Mike. “We operate in a very competitive marketplace and an awful lot of the work goes to providers that organisations have worked with before. The challenge for us was to find opportunities that were typically in a competitive tender process, persuade people that we could add value and should be on the list and then prepare the best scientific proposal. It wasn't easy, but we achieved it probably quicker than we expected.”
A catalyst for growth
The capital from the Maven VCTs acted as a catalyst for growth, providing BioAscent with the confidence to target larger contracts, whilst giving comfort to prospective clients that it had sufficient scale and resource to deliver on those projects. David Milroy commented, “it’s great to see the team’s hard work recognised by their peers including being ranked as the UK’s fastest-growing drug discovery CRO in Alantra’s Pharma Fast 50 (a report which recognised the UK’s fastest growing privately-owned pharma companies) as well as winning both the Management category at the Scotland’s Life Sciences Awards and the BVCA Vision 2022 Award.
The BVCA summarised the achievements perfectly when it highlighted BioAscent’s incredible growth, the creation of a significant number of high quality jobs in Scotland and its strong ESG credentials including the team playing a leading role in establishing and running the Lighthouse Lab testing facility in Glasgow during the COVID-19 pandemic.
BioAscent's expansion and moving forward
BioAscent has now recorded its fourth successive year of high double digit growth since the Maven VCTs first invested. “We are in a more rapid growth phase and at the moment it's about building that critical mass,” explains Mike. "Maven is very supportive of this strategy, providing additional investment and bringing added value to the table.”
Paul agrees, “Maven's sector knowledge and contact network has also been invaluable. We'll ask David if he knows anybody with particular expertise, and Maven has been really helpful in sourcing the right contact, most recently when they introduced an advisor that has enabled us to benchmark BioAscent on various key metrics."
Moving forward, Paul and the senior management team at BioAscent are focused on continuing to recruit the best talent from around the world. The business is also looking to further expand its range of services this year, including offering custom protein production, immuno-oncology and further translational assays.
“The next part of our growth strategy is having the space for expansion,” says Paul. “We’re already in advanced discussions to achieve a significant increase in lab and office space while retaining a single location, which makes the drug discovery process so much more efficient.”