o2h Therapeutics EIS/SEIS Fund
The o2h Therapeutics fund will invest in a mixture of SEIS and EIS qualifying companies in early-stage biotech therapeutic and related AI opportunities.
- Focus on early stage biotech therapeutic opportunities around Cambridge
- Target 7-8 portfolio companies (not guaranteed)
- Investments should be deployed within 12-18 months
- Managers will personally invest in the fund
- Minimum investment £25,000
This SEIS/EIS fund is managed by brothers Sunil Shah and Prashant Shah. They set up their first biotech company, Oxygen Healthcare, in 2015 which they then sold to Piramal Enterprises, a global drugs firm headquartered in Mumbai. The o2h group has been collaborating with early stage biotech companies since 2004. The firm’s chief scientific officer, Andy Morley, has substantial experience in big pharma.
The fund will source deals through a number of channels including angel networks, top UK universities, industry conferences and an extensive range of personal contacts built up by Sunil, Prashant and the management team.
o2h believes early stage businesses typically need more than just money to thrive and so will provide ongoing support and guidance to portfolio companies. They will look to offer incubation via the o2h SciTech Park in Cambridge and the option of further assisting research via o2h Discovery in Ahmedabad, India. Cambridge, alongside Oxford and London, is a hotbed of academic research and is also the new home of Astra Zeneca’s global headquarters.
o2h will look to invest in companies that focus on therapeutic drug opportunities or technologies that enable drug discovery. There is an emphasis on artificial intelligence.
The o2h founders have committed to personally invest 10% of the first £2 million deployed and then a minimum of 2.5% of every investment thereafter, so their interests are aligned with investors’.
o2h will aim to deploy capital within 12-18 months but this is not guaranteed. The offer is only open to investors who successfully apply to become an elective professional client of o2h Ventures and have the knowledge and experience to understand the risks.
Portfolio company examples
The following are examples of investments the fund made in 2019. Note: investors may have exposure to different portfolio companies in future.
Exonate is a privately held, early stage, biotech company spun out of the University of Nottingham in 2014. It is focused on alternative splicing of Vascular Endothelial Growth Factor (VEGF) in ophthalmology. In 2017 Exonate received £4.9m Seeding Drug Discovery award by the Wellcome Trust. The ophthalmology scientific programme is funded through to the start of the clinical development programme in 2020.
Exonate’s lead programme is in the area of Diabetic Macular Oedema (DMO). A consequence of diabetic retinopathy, DMO, is swelling in an area of the retina called the macula and wet Age-Related Macular Degeneration (wAMD), which is the leading cause of vision loss in people aged 60 and older. Exonate has developed small molecules that inhibit production of pro-angiogenic VEGF through selective inhibition of serine/threonine-protein kinase 1 (SRPK1) mediated VEGF splicing. These inhibitors have already demonstrated superior efficacy as topical agents in preclinical models of wet AMD.
Oxford Drug Design Ltd
Resistance to existing antibiotics is rising and no new ones have been created since the 70s. Oxford Drug Design is a small biotech company spun out from the University of Oxford that aims to address this. It is hunting for new drug compounds that could eventually end up on the pharmacist’s shelf. The company’s USP is the software it has developed to design novel chemical compounds that can be used in the development of antibiotics.
In 2019, Oxford Drug Design received over £8 million in grant and equity investment. CARB-X (Combating Antibiotic Resistant Bacteria Accelerator) has agreed to back its discovery project with a milestone dependent, non-dilutive, award for over £5 million. In parallel, the company has been awarded £2 million from the UK Department of Health and Social Care through the Small Business Research Initiative. O2h Ventures led an equity investment round, which includes Jonathan Milner, founder and Deputy Chairman of Abcam, as a significant co-investor.
Risks - important
The area of drug discovery and therapeutics is particularly high risk. The biotech sector tends to have outcomes of a binary nature. If a drug or treatment proves to be unsuccessful, the potential for the company is limited.
This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.
While the management team have previous success investing in this sector, this is the first iteration of this fund and the first time o2h has invested within an SEIS/EIS framework.
SEIS and EIS investments are high-risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks.
Tax rules can change and benefits depend on circumstances.
This fund invests in early-stage businesses which are more likely to fail than larger ones, so you should expect a number of failures in the portfolio.
Fees and charges
A summary of the main charges and savings is shown below. Some of these will be payable by the investor, whilst others by the investee companies. The investment may have additional charges and expenses: please see the provider documents, including the key information document, for more details.
|Full initial charge||2%|
|Wealth Club initial saving||—|
|Net initial charge through Wealth Club||2%||Annual management charge||2%|
|Performance fee||20%||Investee company charges|
|Initial charge||—||Annual management charge||—|
More detail on the charges
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – tax-efficient investments. You should base your investment decision on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.
- Life sciences
- Target return
- Funds raised / sought
- £10.0 million sought
- Minimum investment
- 31 Jul 2019