Biotech star BenevolentAI floats with a £1.3bn valuation in Europe’s biggest SPAC takeover

·3-min read
 (BenevolentAI)
(BenevolentAI)

British biotech star BenevolentAI today made a commitment to remain rooted in the UK after being taken public with a €1.5 billion (£1.3 billion) valuation in Amsterdam via Europe’s biggest ever healthcare SPAC merger.

The firm, which uses artificial intelligence to discover and develop new treatments for complex illnesses, is set to join the Euronext after a reverse takeover by Odyssey, a blank-cheque company founded by the deal-making Zaoui brothers.

The deal will raise up to €390 million (£332 million), with Benevolent receiving Odyssey’s €300 million war-chest alongside €135 million from existing backers such as Singapore’s Temasek.

AstraZeneca, which is working with the firm to find new treatments for chronic kidney disease, is taking a stake.

The cash will be used to accelerate research, develop its machine-learning systems and scale up the drugs pipeline.

It has pledged to stay headquartered in the UK as it expands its team and operations both here and in the US.

CEO Baroness Joanna Shields, a former Google and Facebook executive who worked as an advisor to David Cameron’s government, said: “The combination with Odyssey will allow us to scale our vision and ambition of uniting purposeful technology and cutting-edge science to discover life-changing medicines.”

Founded by serial entrepreneur Ken Mulvany in 2013, Benevolent employs more than 300 staff with UK researchers and executives split between a science campus in Cambridge and a corporate HQ in London’s Fitzrovia.

Its research alerted US pharma group Eli Lilly to the potential of arthritis drug baricitinib in treating Covid-19, which is now approved for emergency use in the US.

The firm recorded a loss after tax of £55 million in 2020 after ploughing almost £75 million into research while generating revenue of £7 million.

It was one of the top holdings in fallen stock-picking star Neil Woodford’s Patient Capital Trust and Equity Income Fund.

Following their dramatic collapse in 2019, the stakes were inherited by administrators Schroders UK Public Private (SUPP) trust - of which it comprises 5% - and Link Fund Solutions.

Link holds a stake valued at £36 million in its most recent financial statement. It said: “The value will be under review as events unfold.”

Brothers Michael and Yoel Zaoui — who built their reputations as dealmakers during careers at Morgan Stanley and Goldman Sachs — launched Odyssey onto Euronext in June, and have spent the past six months hunting a target in the healthcare tech sector.

Michael Zaoui, chairman of Odyssey, said: “We established Odyssey with the objective of supporting and bringing to the European capital markets promising European growth companies in the healthcare and/or technology sectors.

“BenevolentAI is positioned at the convergence of these two sectors, is a proven leader in the emerging area of AI-driven drug discovery, and is led by a very experienced management team.

“We are convinced BenevolentAI offers superior growth prospects in a sector which itself is at an inflection point. We see our combination with BenevolentAI as a compelling investment opportunity and are convinced that this transaction will create value for all our shareholders.”

Olivier Brandicourt, the former CEO of French vaccine specialist Sanofi and Jean Raby, ex chief of investment managers Natixis will join the board following completion of the deal.

Goldman Sachs acted as advisors to Benevolent with JP Morgan working for Odyssey.

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