SEP cashes in as US giant Amgen buys cancer drug firm

BioVex, in which SEP was the sole UK investor, was sold to US-based Amgen for $425 million, with an additional $575m in "milestone payments" due subject to trial results and regulatory approvals.

The precise value of SEP's return on an estimated 9m investment is being kept under wraps, but Calum Paterson, managing partner of SEP, said the firm was "one of BioVex's largest investors".

He said: "We will make an excellent return on this."

Other investors include Forbion Capital Partners, a specialist life sciences investor, and French bank Credit Lyonnais.

BioVex's lead product is an experimental cancer vaccine, Oncovex, a treatment for metastatic melanoma, which is in the final stages of testing for US regulatory approval. The drug is being studied in the treatment of head and neck cancer, while the firm is also developing a vaccine for the herpes virus.

The deal, one of the largest ever exit sales for a venture-backed biotechnology company and the largest VC-backed deal since 2008, is expected to complete by spring.

Amgen, based in Thousand Oaks, California, one of the world's largest biotech firms, has been on an acquisition spree in the past five years, with the BioVex deal the largest. The acquisition bolsters the firm's late-stage drug pipeline as sales growth for some of its existing drug treatments declines.

Oxfordshire and Massachusetts-based BioVex has raised at least $175m from venture firms since it was founded in 2000, with SEP one of the first backers in 2003.

Philip Astley-Sparke, chief executive and founding director of BioVex, said: "Amgen is ideally positioned to leverage the potential of Oncovex.

"We have a shared vision and commitment to bring novel therapeutics to market and we are looking forward to being able to combine our efforts towards this common goal".

Paterson added: "It has been a privilege to be involved with something that has potentially got a much more significant outcome beyond the commercial side."

The deal outstrips Glasgow-based SEP's previous biggest exit of an investment, the $275m sale of high-tech oil and gas services firm Mtem in 2007.

The sale comes after a spate of smaller deals for the venture capital firm late last year. In December, SEP was involved in the $75m sale of a stake in Barcelona-based Gigle Semiconductors, while the firm was also an investor in Stentys, a Paris-based medical devices company which raised $31.9m in an IPO.

"We have continued to achieve good exits and that comes down to picking the right companies to invest in," said Paterson."We have a very strong position within the European venture capital sector as one of the leading firms. We want to be viewed by entrepreneurs as a great place for capital growth."