Mind the £1.5 billion gap

OXFORD - Chris Evans, chairman of Merlin Ventures Ltd., is planning to raise a new £60-£100 million ($100-$160 million) fund to plug an equity gap that he believes threatens the sustainability of Europe's burgeoning life sciences sector. While a whole raft of seed and venture schemes, many with government backing, has provided funds for start-up European life science companies in the past few years, Evans warns that it is no longer clear where these companies will get the subsequent finance to develop into sustainable businesses.

Evans believes that this equity gap could amount to £1.5 billion in the U.K. alone. "Once companies have been established with the seed money, they have to be looking to raise some £2-£3 million within the first 15 months or so, otherwise they are not going to be able to do anything," he told BioCentury. "Then within a year of that, the company should be looking to raise a £5-£10 million slug of money. All companies need to do that in order to achieve the critical mass that will enable them to seek an IPO of some £15-£20 million."...