What was the deal?
It was the Eos Advisory-led £4.1m investment in Cumulus Oncology, Europe’s first oncology drug development accelerator, which completed in February 2022. Scottish Investment Bank and Alba Equity invested alongside Eos – a range of investor types.
Cumulus was founded in 2017 by Dr Clare Wareing and identifies unloved oncology research and molecules in big pharma companies, which it looks to spin out to commercialise novel cancer therapies. Busy pharma companies see it as an alternative way to unlock value. Clare previously co-founded clinical research organisation Nexus Oncology, which was sold to US-based global research company Ockham in 2012, so she had already been through the entire process of founding a business and taking it through to exit.
How were you introduced to the business?
BSW Timber was one of my first clients when I started my career at Biggart Baillie in the late 1990s. Keith Murdoch provided corporate finance advice to BSW and he later became involved in several life sciences companies. He introduced me to Clare and Nexus. I advised on the exit to Ockham while I was partner at Shepherd & Wedderburn.
How was Cumulus established?
In June 2020, Clare raised £1.7m from Eos, Alba Equity, Scottish Investment Bank, Apollo and Investing Women. We advised on that deal. It was the first we completed start to finish during lockdown. That capital set up the infrastructure for the investments to be made. Clare put together a crack team, very much pan-European, with the ability to do due diligence swiftly and on an informal basis. It goes in, kicks the tyres and knows relatively quickly if a molecule has potential.
Who were the advisers?
We provided legal advice to Cumulus. The Burges Salmon team, alongside myself, included senior associate Katie Carter and solicitor Victoria MacAulay. Life sciences is highly regulated and quite technical. Many lawyers in that space take an academic approach to things, whereas ours is pragmatic and commercial. Clare appreciated that.
Have you maintained contact?
We plan to advise on the legal aspects of any licensing deals as they grow the business, as well as on the VC-funding that will be required to support clinical trials. I’m now part of its monthly executive meetings, which means I have a much better handle on the challenges the company faces, as well as gaining valuable insight into what’s in the pipeline. Just after the deal was completed, in March, it entered into a collaboration agreement with Dortmund-based Lead Discovery Center (LDC), which turns big pharma science into therapies. Both will target oncology innovations they can work together on. LDC already has alliances with AstraZeneca, Bayer and Merck.
What were the lessons learned?
The most important thing in this sector is credibility. Investors won’t just rely on the company understanding the science or the technology; they have to believe in the people behind the business – not just that they’re smart, but that they’re able to deliver the business plan. The Cumulus team has that mix of being smart scientists and savvy business people. The fact that Clare has been through this process before and successfully exited means she can demonstrate she knows what the business is about and what matters to investors. A lot of life sciences businesses have smart people, but often they can’t speak the language of investors. This business is about saving lives, but it’s also about generating a return for investors. Let’s make no bones about that.
The CV
Danny Lee is a corporate partner with Burges Salmon in Edinburgh. He joined in 2019, from Shepherd & Wedderburn, where he had been a corporate partner since 2007. Prior to that, he trained as a solicitor with Biggart Baillie, having completed a law degree at the University of Edinburgh.
Recent deals
- Healthtech business Cytomos’s £1.6m fundraise from Archangels, Scottish Enterprise and Old College Capital in July 2022
- Dental technology company Calcivis on its £1.52m fundraise from Archangels, Scottish Investment Bank and others in August 2022
- Animal genetics company Genus on its partial acquisition of St Andrews-based Xelect for an undisclosed sum in September 2021