From start-up to exit: DJS Antibodies

The small team at biotech start-up DJS Antibodies, based in our Wood Centre for Innovation, achieved an incredible feat, when in 2022, only eight years into their business journey with their innovative antibody discovery platform, HEPTAD, they were acquired by global biopharmaceutical company AbbVie for $255 million.

Dr David Llewellyn, co-founder and CEO of DJS Antibodies, shared their journey from start-up to exit at the first event of the Exit Right 2023 series. Theirs is a story of ups and downs, driven by hard work and optimism, and supported by a few fortuitous moments and connections made along the way.

A match made in … the lab

In 2010, David came to Oxford to complete his PhD at the University of Oxford’s Jenner Institute. On his first day in the lab, he met future DJS Antibodies co-founder, Joe Illingworth, a fellow PhD student at the time. The pair have worked together every single day since that day 13 years ago. “That’s either a good match or a bad ability to break up,” jokes David.

During their PhDs and short stints as post-docs, David and Joe had always said it would be fun to start a business, but they had no idea how or even a viable business idea. At the end of their post-docs, while wondering what to do next and looking at other academic positions around the world, they by chance received an email about the OneStart Biotech Business Competition, organised by Oxbridge Biotech Roundtable and SR One, with the prize of £100,000.

The start of one incredible journey

Believing the competition would be a good route to learn about biotech business, they put together a one-page business plan and submitted it with only minutes to spare. Their first rejection was immediate – they had failed to supply a name of their company! In the spur of the moment, they came up with DJS Antibodies, named after the three people in the room at the time – David, Joe and Simon. And so, the journey began.

They aimed to do something no one had done – create antibodies to a set of cellular receptors involved in inflammatory disease.

‘Accidental’ connections helped along the way

David and Joe were then on a quest to learn as much as they could. After attending a talk by John Haurum, CEO of F-star, a biopharmaceutical company developing novel antibodies, they managed to convince him to have a cup of coffee (on them). He willingly talked about how he got into business. Their relationship grew from there and John became a long-term mentor as well as a member of the DJS board.

Making it through to the final stage of the Biotech Business competition, they attended an intense ‘bootcamp’, where they learned about various facets of business, such as how to raise finance and what legal aspects they needed to consider. During this time, they learned a lot through meeting and connecting with people also starting out in biotech business as well as mentors willing to share their own stories and advice.

Not the winners then, but…

Although they did not win the competition, while celebrating the winners at a pub, they met the head of innovation at Johnson & Johnson Innovation, who, impressed by their pursuit, offered them £75,000 seed money to test their idea. At this stage, they just had a bright idea, but no real data.

So, they rented a bench in Oxford Innovation Space’s centre in Upper Heyford, the only place where they could rent a small bench space in a fully equipped lab. They chose 10 receptors, each with different properties, and tried to make antibodies against each, testing the capacity of their platform. During mid-2015 to 2016, David and Joe worked in shifts and managed to make antibodies against all 10 targets. For the first time, they believed their idea could actually work!

Funding success

In the mid to end of 2016, Oxford Sciences Innovation, now called Oxford Sciences Enterprises,  was making their first investments. They were fortunate, says David, that although other VCs had little interest in them without more robust data, Oxford Sciences Innovation invested just under £700,000. With this investment, they were to choose two or three targets from the 10 and continue further development of antibody treatments. Then, in 2017, they were also awarded an Innovate UK grant. They took on their first employee, Megan Ingham, growing their team to three. Now a Senior Research Associate, Megan says joining DJS “was the best decision of her life.”

The ups and downs

As with many companies starting out, DJS had its ups and downs. Although they had little money at the start of their journey and scrounged for used equipment to fix and make functional, they had a lot of fun, says David. He admits they were fortunate to be saved by boosts of funding arriving at times when their finances dipped to critical levels. He also acknowledges they were fortunate to be supported through the Covid pandemic with their Innovate UK grant.

With a small team and tight funds, they needed to be deliberate about what experiments they chose to conduct. In these early days, they relied heavily on outsourcing research resources. This came with challenges. When an external lab who had been tasked to help identify antibody hits to their chosen receptors caused a mix up in labelling of their samples, they lost months of work and money, and their hopes came crashing down. They could not repeat it all. But, among the mess, they were able to identify one antibody. This antibody did everything they wanted it to and it kept them going.

Series A funding success

In 2020, they went out for Series A funding for £6 million. Their aim with this round was to take an antibody for the target receptor LPAR1 to candidate stage. LPAR1 is a receptor involved in many fibrotic diseases, especially fibrotic lung disease. At the same time, they also had another early-stage program they were developing in parallel, and they had their fundamental antibody discovery technology, their HEPTAD platform.

They pitched to 200 investors and, in the end, four investors came together to invest in the round in December 2020 (read a news report here)

“Something I’m proud we did”

After raising this money, they created a share option pool for employees, a new share class protected from dilution and shared amongst all employees. As a small team, no matter what the roles of individuals were, any success of the company was dependent on everyone doing their share of the work. So, for David and Joe, it was important that everyone should share in any future success. David says, when the acquisition was concluded, “The best thing I’ve ever done in my life was having those conversations with the team to say your options are now really worth something meaningful!”

As an employee, Megan said, “This made the team feel part of the acquisition and excited by the prospect of the opportunities that were around the corner. Teamwork has always been at the heart of DJS.”

From Series A to acquisition

By the end of 2020, they had their lead asset and needed to get it into clinic to start Phase 1 trials. They also had a pipeline of other antibodies to follow. To achieve their goals, they needed more funding. They went out to investors with the aim of raising £40 million.

Unexpectedly, as they were still at a preclinical stage, they received interest from a pharmaceutical R&D team for a licensing deal. Not wanting to sell to the first party that showed interest, they started to reach out to other pharma companies.

As a licensing deal evolved, what ended up on the table was to effectively demerge the company, selling the lead asset and then create another company that held onto the pipeline of antibodies and the HEPTAD discovery platform.

It wasn’t simple, though. The technology for how they discovered antibodies was their trade secret, known only by David and Joe and not patented, and they were paranoid that this know-how could accidentally be included in documentation and vehicles they would sell with their lead asset. Although, over about six months, they put a lot of work, long hours and much sacrifice into trying to make it possible, it was complicated and was ultimately an unsuitable route for DJS.

David and Joe decided that the best way forward would be to sell the company as a whole to whomever offered the most attractive proposal. At this stage, AbbVie stepped up, and within 30 days, with the help of a strong team of lawyers and other experts, they signed a deal with a payment of $255 million upfront.

Small biotechs drive agile drug discovery

At the end of the day, David reflects, they have had a great result. They took on less than £9 million and exited for $255 million. They have retained their whole team, still work relatively independently out of The Oxford Trust’s Wood Centre for Innovation in Oxford, but with the buying power and expertise of a large pharma company backing their work. David says, “I think AbbVie recognises that small biotechs drive drug discovery in an agile, interesting and efficient way.”

That’s what they are continuing to do.

If you are interested in our upcoming Exit Right 2023 talks from other company leaders and M&A experts, see https://www.wcfi.co.uk/exit-right/