A startup behind the Covid-19 vaccine developed by Oxford University and AstraZeneca AZN 1.76%
PLC is planning an initial public offering that sponsors expect to be the largest market debut of an Oxford spinoff in years.
An obstacle: the university itself.
Nine-hundred-year-old Oxford is struggling to rewrite its rules to encourage companies set up by its academics or born in its labs, while in a confrontation with one that has been driven by the pandemic. The start-up, Vaccitech Ltd., has been introducing itself to potential investors and laying the groundwork for a listing in New York as early as this year, according to people close to the marketing plans and documents reviewed by The Wall Street Journal.
Investors expect an IPO valuation of about $ 700 million, with expectations that Vaccitech could be a $ 1 billion company by the end of the year. Big investors like the pharmaceutical giant Gilead Sciences Inc.
and Lilly Asia Ventures, a venture capital group derived from pharmaceutical company Eli Lilly & Co., have expressed interest in investing, according to people familiar with the matter and documents reviewed by the Journal.
Vaccitech chief executive Bill Enright declined to comment, as did a Gilead spokesman. Lilly Asia Ventures did not respond to any requests for comment.
Vaccitech is among a handful of once dark biotechnologies that have found their moment of opportunity in the pandemic. Vaccitech, however, has not yet taken advantage of its role. Some investors have been nervous about the high-profile stumbles on the launch of the shot and the first negative perceptions about its effectiveness compared to other vaccines.
There is another hook. Long-standing tensions between the start-up and Oxford have raised new hurdles in the complex fundraising process, according to people familiar with the issue. According to these people, plans for an IPO are still in the process of being transformed and can be undone.
As highly transmissible coronavirus variants spread around the world, scientists are rushing to understand why these new versions of the virus are spreading faster and what it can mean for vaccination efforts. New research says the key may be the ear protein, which gives the coronavirus its unmistakable shape. Illustration: Nick Collingwood / WSJ
The university owns about 10% of the startup. According to these people, Vaccitech, its bankers and lawyers have sought access, so far without success, to the exclusive contract against the Oxford Covid-19 vaccine with AstraZeneca. The pact was agreed last spring when the pharmacist agreed to manufacture and distribute the Oxford vaccine. Vaccitech and its advisers have argued that the document explains the financial and legal obligations that are key to valuing the company fairly and for regulatory disclosure.
These people say Oxford and Vaccitech are separated from the narrative of the company’s role in vaccine development. Vaccitech wants the Oxford primer to market the first work of its scientists alongside Oxford in the invention of the vaccine and its help to accelerate manufacturing for initial clinical trials and provide safety data for regulators, according to people familiar with the subject and correspondence related to the journal. The two sides also briefly discussed the list, and some Oxford-affiliated investors favored London. Vaccitech executives have insisted on the Nasdaq in New York.
Oxford did not respond to requests for comment. AstraZeneca declined to comment.
Prior to Covid-19, Vaccitech was a little-known biotech startup focused in part on vaccines, a low-profile field until last year. Oxford support helped keep the company afloat. The firing of Covid-19 has given new credibility to Vaccitech’s set of vaccines and therapies, still in clinical trials, aimed at fighting other viruses and cancers.
The conflict is developing as Oxford tries to review how to support emerging companies, such as Vaccitech, that are trying to turn science and technology into shareholder returns. The review is part of Oxford’s long search to better compete with major American schools such as the Massachusetts Institute of Technology and Stanford University to attract money and talent for businesses.
Vaccitech was co-founded in 2016 by two Oxford scientists who are now the center of vaccine development. They created a key technology that sustained the shot, using a chimpanzee cold virus modified to transport genetic material to human cells to trigger immunity. Vaccitech has rights over this technology.
Executives and investors say Covid-19 shooting has demonstrated the potential of Vaccitech technology to fight hepatitis B, prostate cancer and human papilloma virus, global health issues with huge markets for effective treatments . Vaccitech scientists believe the so-called viral vector technology used in the Covid-19 vaccine may unblock other therapies and weapons against infection, some of which could be licensed to large pharmaceutical companies.
Tests performed on humans on the Oxford-AstraZeneca shooting last year – and real-world testing since then – showed that it worked against Covid-19, preventing deaths and serious illness. But trials also generated a confusing spectrum of results that created negative perceptions about its effectiveness compared to other vaccines. AstraZeneca has also defended the dose deficiencies it said it would deliver to Europe this month.
Other biotech companies behind Covid-19 vaccines have achieved the goal of fundraising. Germany’s CureVac NV raised more than $ 200 million in an August stock debut that valued it at more than $ 2 billion. This has risen by US $ 15 billion as the vaccine has reached the final phase trials. Novavax shares Inc.,
who fought for years to produce a marketable vaccine, have increased as the US authorization of its Covid-19 vaccine closes.
Vaccitech has waived direct rights to the Oxford Covid-19 vaccine and instead intends to earn 24% of the royalties Oxford receives for AstraZeneca vaccine sales, the newspaper reported earlier.
The value of Vaccitech is based in small part on the possible future copyrights of the Covid-19 vaccine, but much more on its plans to adapt the vaccine technology to fight other diseases. According to marketing documents, this drug channel needs at least three or four more years to bear fruit. Earlier, investors valued the company at around £ 100 million, equivalent to $ 138.4 million, but now estimate it is worth more than $ 250 million, according to updated non-public data.
Vaccitech’s IPO plans are being set up as a test case for the Oxford spinout process. The university has supported more than 200 emerging companies since the late 1980s, but its track record of fostering big money winners has followed major U.S. institutions. Now, the British university is breaking its existing rules, according to non-public communications reviewed by the Journal and people familiar with the process.
In 2015, Oxford set up its own venture company, Oxford Sciences Innovation PLC, raising about $ 800 million from outside investors. Oxford owns 5% of OSI and intends to take a 50% stake in promising companies, automatically giving half to OSI. Since then, Oxford has re-marked its founding stakes at around 28% on average and wants to cut it even further for future companies, say people close to the process, in an effort to attract more founders and outside investors. OSI declined to comment.
Oxford’s big initial bets can give oversized influence to the university’s emerging companies, even after other investors dilute those stakes. Oxford and OSI, with a 40% stake in Vaccitech, pressured biotechnology to sign its 50% share of the vaccine’s intellectual property to allow the AstraZeneca deal, according to the newspaper. Vaccitech also stayed out of negotiations with AstraZeneca.
AstraZeneca has publicly pledged to provide three billion non-profit doses this year. At the time of the partnership agreement, according to private communications, OSI told Vaccitech that, like Oxford, it would not be eligible for any vaccine gift as long as Covid-19 remained a pandemic and for a period of 12 months later.
Vaccitech sponsors pushing for access to the contract want to be clear about the full conditions Oxford reached in terms of payment of royalties and any other benefits, once AstraZeneca starts taking advantage of the doses, according to people who know the subject.
Write to Jenny Strasburg to [email protected]
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