A Reed Smith team lead by John Wilkinson and Oliver s’Jacob, partners in our life sciences and investment funds teams respectively, has advised specialist investment manager Sixth Element Capital (6EC) and Cancer Research Technology (CRT) on the launch of a ground-breaking £50m investment fund, to bridge the funding gap in the U.K. between cancer drug discovery and early development!
The CRT Pioneer Fund, in which CRT and the European Investment Fund (EIF) are the principal investors, will advance potential oncology drugs from discovery through to entry to mid-stage Phase II clinical trials.
It was launched at a press conference on 28 March, hosted by Dr Harpal Kumar (Chief Executive of Cancer Research UK), Dr Keith Blundy (Chief Executive of CRT), Richard Pelly (Chief Executive of the EIF) and David Willetts (UK Minister for Universities and Science).
Dr Keith Blundy said: “The creation of this landmark fund addresses the problem of funding the development gap which is restraining cancer drug development in the UK.”
The Fund was structured as a limited partnership, in line with most venture capital and private equity funds. However, unlike most such funds, the Fund is designed primarily to invest directly in oncology drug development projects and make returns through royalties, rather than through the investment in and subsequent divestment of portfolio companies. This kicked up some interesting structuring and tax issues, in particular given the specific and very different tax treatments of the fund’s initial investors, namely the EIF, CRT and management team.
We acted as sole legal counsel on the establishment of the Fund while Brodies LLP acted on the establishment of certain Scottish entities as part of the overall structure.
Click on this video link for more details!