An artificial intelligence company has yielded a significant financial gain for Dundee University, following its recent acquisition by a US-based firm. Exscientia, which was founded in Dundee in 2012, was acquired last month by Recursion in an all-share deal valued at £500 million. The university, which held a meaningful stake in the company, stands to benefit immensely from this transaction, having netted approximately £40 million from selling the majority of its shares in 2021.
The inception of Exscientia can be traced back to post-doctoral research at Dundee University, led by Dr Andrew Hopkins. The company utilizes artificial intelligence technology to expedite the drug discovery process. Since its founding, Exscientia has secured several multi-million-pound contracts with major pharmaceutical firms and established its headquarters in Oxford in 2017, while maintaining a presence at City Quay in Dundee, alongside additional offices in the United States.
Exscientia's initial public offering on the Nasdaq stock exchange in October 2021 saw its shares soar, reaching a valuation of £2.5 billion. However, this upward trajectory was short-lived, as the share price began to decline significantly. It fell from a high of around $27 per share to a valuation of below $5 at the time of its acquisition. The university's strategic decision to sell most of its shares in 2021 allowed it to capitalise on the company's peak performance.
The funds accrued from this windfall have been earmarked for strategic investment. A spokesperson for Dundee University stated that this financial boost facilitated the development of the new Life Sciences Innovation Hub, a project which is part of the Tay Cities Deal, aimed at fostering growth in the life sciences sector within the region. This new facility, expected to open early next year, is designed to support life sciences start-ups spun out from the School of Life Sciences and to accommodate companies looking to scale up operations in partnership with the university.
Despite the success surrounding the Exscientia acquisition, Dundee University is grappling with financial challenges, including a notable £30 million budget deficit. In light of these circumstances, Principal Professor Iain Gillespie has indicated to staff that job losses are "inevitable". The university remains hopeful that continued investment in innovation will yield further lucrative opportunities similar to its experience with Exscientia.
Recently, Dundee University received recognition as the outstanding entrepreneurial university of the year at the Times Higher Education Awards, celebrating its role in fostering a conducive environment for innovation and growth. While not all stakes in Exscientia were sold, the university retained 234,600 shares, which have since been converted into shares of Recursion and are currently valued at nearly £1 million.
The overarching initiative of the Tay Cities Biomedical Cluster, which received £25 million from the Scottish Government, is projected to create around 800 new jobs and generate over £190 million for the region by 2053, reinforcing Dundee's position as a burgeoning hub for life sciences and technology.
Source: Noah Wire Services