A Fork in the Road: Quethera’s Story


UKI2S announced in August the successful exit of its portfolio company Quethera. Acquired by Japanese pharma giant Astellas for up to £85 million, the deal sees Quethera’s novel ophthalmic treatment program continue under the new parent. How did this successful exit come about in under three years since first raising funds?

Quethera was founded by Dr Peter Widdowson and Prof. Keith Martin from the University of Cambridge. UKI2S joined as a founding investor with initial seed funding. This was followed with additional funds as the company developed their proprietary gene therapy technology. UKI2S was joined with co-investment from Cambridge Enterprise and Parkwalk.

UKI2S is a hands-on investor and its investment director Oliver Sexton, who has previously worked with the gene therapy company Ark Therapeutics, oversaw the investment. He remained involved with Quethera post-investment, being active on the board and appointing additional board members to support the work of the founder.

“When Quethera started, it was an idea and we had to secure intellectual property on those ideas,” Dr Peter Widdowson, CEO of Quethera, explains. “From our point of view, UKI2S was critical. Oliver has been like a fourth member of the team. He picked up on my ideas right at the start and had the foresight to see the potential.”

When Quethera reached the end of their seed funding, non-dilutive grant support from the Wellcome Trust and the Medical Research Council was crucial for keeping the company going. UKI2S also stepped in with further financial support in the form of convertible loans, allowing Quethera to continue their work. UKI2S investment enabled the company to show strong results in vitro and in vivo, taking the therapeutic towards the clinic.

UKI2S is a patient and engaged investor with a healthy appetite for risk. The fund works with high risk, big ideas like Quethera’s gene therapy technology. UKI2S helps build and develop the team, introducing new investment and investors, board members and management for each stage of growth. Oliver explains from the UKI2S side, “We invest via equity and loans. We founded Quethera with an equity investment, then provided two convertible loans to provide some more cash whilst the company conducted its Series A raise.”

As a marathon Series A funding round loomed, Quethera reached a fork in the road.

Peter, a veteran of major pharma companies including Pfizer, AstraZeneca and OSI Pharmaceuticals, knows the dangers of taking therapeutics to clinical trials. UKI2S helped Quethera arrange talks with potential investors, though it seemed a rocky road. Peter recalls difficulties in the negotiations where he relied heavily on UKI2S as an advisor. During negotiations, another option emerged.

“Astellas approached me in June last year, with it wanting to licence the technology and acquire us, and I thought it was just too early,” Peter says. A year on, the timing seemed right to open up this discussion again.

“Going down the Astellas deal was my driving rather than going down a Series A. It meant that we could return investment to UKI2S and Cambridge Enterprise. If we went down the Series A, everything would be dependent on raising a lot more money.”

For the investors and founders, the acquisition secured strong strategic support and helps ensure Quethera’s novel therapy may one day treat a large unmet need. The acquisition came after the company showed very promising results with the seed investment, turning a concept into a reality. For both founders and investors, a sale at this stage in the R&D process manages the dilutive impact of a large series A raise.