After a year of countless exits in the ecosystem, many among the most significant yet – so much so that five nominees were not enough to recognise them all – the Award for Exit of the Year was one of the most difficult to determine.
But there are more than 422 million reasons why the acquisition of Ziylo, a UK-based spinout from University of Bristol working on technology to develop next-generation insulin, by pharmaceutical firm Novo Nordisk for potentially more than $800m, emerged as the winner.
That figure is the number of people who have diabetes, according to a report by UN public health agency the World Health Organisation (WHO), which projected that by 2030 the disease would be the seventh leading cause of death.
There is no cure for either type 1 or type 2 diabetes. The cause of type 1 diabetes remains unknown and is characterised by low levels or absence of insulin, requiring daily injections of the hormone that helps the body process sugar.
Type 2 diabetes, the most common form of the disease, is largely caused by obesity and physical inactivity, which over time cause the body either to produce insufficient levels of insulin or develop a resistance to the hormone.
A third type, gestational diabetes, affects women during pregnancy and is characterised by high blood sugar levels that remain below the level of chronic diabetes. It can, however, cause complications and increase the risk that mother or child will develop type 2 diabetes.
A total of 1.6 million deaths each year are directly attributable to diabetes, according to the WHO, a figure likely to rise further as one in three adults is overweight and one in 10 is obese.
The disease – if not monitored constantly and treated through insulin injections, medication, diet and physical activity – leads to serious damage to the heart, blood vessels, eyes, kidneys and nerves.
That it was Novo Nordisk which picked up Ziylo is no coincidence – the corporate is the world’s largest manufacturer of diabetes medicines, dominating more than a quarter of the market.
Neither party has revealed the specifics of the acquisition deal, noting only that, including milestone payments, the total amount could exceed $800m – an outstanding return for a spinout that had raised just $2.5m in combined angel funding and government grants.
Founded in 2014, Ziylo has designed synthetic glucose-binding molecules that react and adapt to glucose levels in the blood and thereby prevent dangerously low blood sugar levels, known as hypoglycaemia.
Ziylo is based on research by Anthony Davis, professor of supramolecular chemistry, and PhD student Harry Destecroix, who went on to become the spinout’s chief executive. The pair co-founded the business with chief financial officer Tom Smart.
The acquisition gives Novo Nordisk full rights to the platform. But in an interesting twist, the deal also included the formation of a new spinout, Carbometrics, that has licensed back rights to help Novo Nordisk optimise glucose-binding molecules and to develop non-therapeutic applications, including continuous glucose monitoring products. Carbometrics has employed Ziylo’s team.
Novo Nordisk hopes to start clinical trials within three years and will carry out its research and development activities in Oxford and in Denmark.
Allakos (Johns Hopkins University), $128m IPO
Moderna (Harvard University), $604m IPO
Orchard Therapeutics (University College London), $200m IPO
SecurityMatters (University of Twente), acquired by Forescout Technologies for $113m