Oxford spin-out sold for US$160 million

Oxford University spin-out company Oxitec, which is commercialising technology to control disease-carrying insects and pests, has been sold to synthetic biology specialist Intrexon Corporation for US$160 million.

Oxitec uses a genetic modification technique invented by its founders — Luke Alphey, David Kelly and Paul Coleman — to design strains of insects which are bred so that their offspring die before reproducing. These ‘sterile’ strains can be mass reared and then released into the wild, causing a population crash which removes that particular insect species.

The technology has already made significant progress in addressing dengue fever, which is carried by the Aedes Aegypti mosquito and infects up to 390 million people worldwide every year. Trials in Grand Cayman, Brazil and Panama have all shown Aedes Aegypti population reductions of more than 90%, with the modified mosquito the first GM insect approved as safe for use in Brazil.

The technology can also be used to control agricultural pests that damage crops. Oxitec recently received approval for open field trials in Brazil and the USA for two strains to control the Mediterranean fruit fly and the diamondback moth, to be held later in 2015.

Oxford’s technology transfer arm, Isis Innovation, assisted with patenting the initial intellectual property, setting up the company and raising investment. The subsidiary also invested £248,000 in seed funding from the Oxford University Challenge Seed Fund for proof-of-concept research.

“By reducing dengue and other diseases, this Oxford-developed technology can have huge a positive impact on global health,” said Isis Innovation Managing Director Linda Naylor. “The proceeds of this transaction will allow Isis Innovation to continue to invest in the next generation of Oxford technologies.”

The university increased its stake in the company through further investments by OSEM (Oxford Spin-out Equity Management). As a result of the sale, Oxford’s investments will return US$14.4 million (£9.2 million) to the university.

Intrexon — capitalised at $6.5 billion — will continue to develop Oxitec’s insect control technology. The spin-out’s CEO, Hadyn Parry, said Oxitec sees the partnership as “key to developing sustainable solutions to some of the world’s most intractable health and agriculture problems and making them available on a global basis”.

Image credit: ©Henrik Larsson/Dollar Photo Club