Business
Ministers’ botched £50m life sciences fund ‘achieved all its aims’
A “FAILED EXPERIMENT” of investing public money in risky biotech-style businesses cost Welsh taxpayers at least £28m but achieved all of its original objectives, a committee heard.
Giles Thorley, who heads the Development Bank of Wales, largely blamed external factors for the poor performance of the now-closed Wales Life Sciences Investment Fund.
And the chief executive told the Senedd’s public accounts committee the venture could be repeated in future provided the lessons are learned.
His report detailed how the Welsh Government-owned development bank lost £28.2m investing into “very high risk”, unprofitable life sciences businesses.
According to the paper published this week, the fund, which was managed by Arix Bioscience plc, paid £7.7m in fees or 15% of the initial £50m invested.
Mr Thorley revealed the fund contract set no limits on the fees charged by the manager.
He claimed the fund, which ran for the decade to 2023, met all of its initial four aims: to increase access to finance, attract businesses, grow the sector and boost research.
The fund also had an ambition to raise another £50m, bringing the total to £100m, but Arix invested £5m in 2016 – with only £21.8m returned to the public purse to date.
Managers ordinarily limit the investment into any one business to 10% but 40% of the fund was invested in only two businesses: Rutherford Health and ReNeuron.
Each received £10m from the fund and both later went under, returning nothing and raising concerns that the portfolio was “overly concentrated” in a handful of businesses.
Mr Thorley wrote: “Normally the maximum investment from a fund into a single business is limited to 10%. This mitigates the impact to the fund should some of the investments fail.”
The fund held investments in only nine companies, with three exceeding 10% each and totalling nearly 60% of all investments held.
By comparison, International Biotechnology Trust – a listed life sciences fund – holds dozens of investments to reduce risk, with none making up more than 5% according to its accounts.
That fund has returned roughly 60% to investors over the past decade compared with a -56% return for taxpayers from the Wales Life Sciences Investment Fund (WLSIF).
Mr Thorley said the failed investment strategy assumed the further £50m would be raised, which resulted in less diversification, increased risk and limited follow-on funding.
He also pointed to the pandemic, a big factor in Rutherford’s failure, and the high-profile collapse of the Woodford Equity Income Fund – a co-investor in some WLSIF businesses.
Mr Thorley said disappointing clinical trial results were the main factor for businesses like ReNeuron, which relaunched as a private company in March after a year in administration.
He said: “The nine investee businesses represented a broad portfolio, … from lower risk established businesses with revenue streams to very high risk (potentially very high return) pre-revenue businesses where future returns were wholly dependent on successful trials.
“To that extent, the portfolio was considered balanced.”
Mr Thorley pointed to Simbec-Orion, the fund’s only success story, which provided a £19.7m (2.24x) return on an £8.75m investment.
He wrote: “The fund did achieve all four of its objectives and it may have taken just one more portfolio company to succeed for the fund to have returned the full investment or profit.
“For that reason, provided all the lessons learnt from this fund are considered, the final lesson learnt is not to write off any future considerations for using a specialist fund manager with a dedicated fund as part of a wider approach to supporting growth in a business sector.”
But Senedd Members seemed less keen as they briefly discussed the paper on May 3.
Arix Bioscience blamed a two-year Wales Audit Office review of the fund as a major reason the extra £50m could not be raised.
Adrian Crompton, the auditor general for Wales who sits on the public accounts committee, said: “At a high level, the lessons learned report indicates that, the assessment is that all of the objectives of the fund were met and you, I’m sure, will have some observations on that.”

Describing the fund as a failure, Plaid Cymru’s Adam Price said: “I would suggest on the basis of this that we shouldn’t replicate this experiment.
“It’s fine to experiment but if an experiment fails and you say ‘oh well, it’s OK for us to try again’, I think there are some more basic questions.”
The public accounts committee, chaired by the Conservatives’ Mark Isherwood, decided to discuss the matter in more detail behind closed doors, excluding the public and press.
Business
Pembrokeshire Lydstep Beach Village development refused
A CALL for an extra sign advertising a Pembrokeshire holiday park, adding to exiting unauthorised ones, which planners say would create “visual clutter and intrusion” and a distraction to drivers, has been refused.
In an application to Pembrokeshire Coast National Park, permission was sought, through Lakeside Signs Limited, for an additional sign advertising Haven’s Lydstep Beach Village, near Tenby, the sign proposed for North Lodge where the holiday park joins the main road.
Pembrokeshire County Council’s highways authority raised no concerns regarding the specific location of the sign, but said “there remains a broader concern regarding the cumulative impact of signage along this section of highway,” adding: “The increasing proliferation of signs in this location has the potential to create a visually cluttered environment, which may distract drivers and, in turn, give rise to road safety implications.”
A Park officer report recommending refusal said: “Currently, there are eight flagpoles, one A-frame banner type sign, one pole mounted panel sign, and a further panel sign, located behind the stone wall on the western side of the park’s entrance. None of these advertisements have the benefit of advertisement consent.”
It added: “The increasing number of signs in this location has the potential to create a distraction to drivers, which may result in road safety implications. In addition, the proliferation of signage would create clutter that would result in visual intrusion in this countryside location affecting amenity. As such, the recommendation is to refuse.”
It went on to say: “Whilst it is not deemed that the proposed advertisement would result in harm being caused to the specific special qualities of this area, there are concerns that the display of this advertisement would, along with the remainder of the advertisements, which are unauthorised, result in a proliferation of advertisements, which in turn would cause visual clutter and intrusion.
“This is especially problematic in a countryside location where development is strictly controlled. Should the existing signage be consolidated and rationalised, the Authority may support the proposed sign, however, currently, any additional signage would not be deemed appropriate.”
The application was refused on the grounds that it would, along with the exiting signage, “result in visual clutter and intrusion which would detract from the visual amenity of this countryside location, and would result in potential distraction to drivers, which in turn would rise to road safety implications”.
Business
The Cheesecake Guy store could be coming to Saundersfoot
SAUNDERSFOOT’S Coal Building interpretation centre could soon host the third store for Welsh cheesecake business The Cheesecake Guy Ltd, in plans before the national park.
In an application to Pembrokeshire Coast National Park, Craig Taylor of Merthyr Tydfil-based The Cheesecake Guy Ltd seeks a change of use of part of Saundersfoot’s Cambrian Terrace Coal Building interpretation centre to create a small retail unit.
On its website, The Cheesecake Guy says of its business and products: “Established in 2019, The Cheesecake Guy is all about delivering indulgent, handcrafted cheesecake desserts with a twist. While we offer a range of sweet treats, our specialty — and customer favourite — is the signature cheesecake jar.
“Made with quality ingredients and packed with rich, creamy layers, our jars are the perfect dessert for any occasion. Whether you’re treating yourself or sharing with others, The Cheesecake Guy brings a spoonful of happiness to every bite.”
While no supporting statement has yet been published for the Saundersfoot proposal, the application says the scheme would employ two full-time members of staff, operating 10am-6pm Mon-Sat, and 10-5 on Sundays and bank holidays.
It says the proposed site is currently a mixed-use retail and gift shop, having previously been used as office space.
It adds: “This is a space within a building that is still trading, the space we are wanting a change of use was last used by Persimmon Homes as an office space.”
Of the scheme itself it says it will involve “retail sales of pre-prepared desserts and merchandise,” adding there will be “no on-site manufacturing or heavy processing,” with “equipment limited to display fridges and freezers”.
If approved, the Saundersfoot site would be the third outlet for The Cheesecake Guy, with sites in Merthyr, and, more recently, Newport Market.
After that store opened following redevelopment of Newport’s Victorian market, Craig Taylor, of The Cheesecake Guy, said: “We are very excited to be part of the new development in Newport Market alongside some other amazing small businesses.
“We feel this is definitely the next step in the right direction after our Merthyr Tydfil store taking off so well.”
For its Newport site, The Cheesecake Guy says: “We specialise in creating a wide variety of cheesecake desserts that cater to all tastes. Our menu features popular favourites that have won the hearts of many, alongside exciting new creations designed to keep your taste buds satisfied.
“Whether you’re a classic cheesecake lover or an adventurous foodie, we promise a cheesecake experience like no other. Each cheesecake is made with the utmost care, ensuring a rich, creamy texture and a burst of flavour in every slice (or jar!).”
The Saundersfoot proposal will be considered by park planners at a later date.
Business
Pembrokeshire Broad Haven holiday park works refused
A DEVELOPMENT call for a Pembrokeshire holiday park has been turned down by Pembrokeshire Coast National Park.
In an application to park planners, Broad Haven Holiday Park, through agent Gerald Blain Associates, sought permission for the relocation of a boat storage area, vehicle shed and play area along with rewilding of adjoining fields at Broad Haven Holiday Park, Broad Haven, near Haverfordwest.
The application was supported by local community council The Havens.

However, an officer report recommended refusal.
Detailing the application, it said: “The proposal relates to the extension of an existing static caravan holiday site into adjacent undeveloped woodland to accommodate the relocation of boat storage, a vehicle shed, and a children’s play area, together with associated ecological mitigation measures. No increased pitch numbers are proposed.
“The development site has already undergone some site clearance, resulting in the removal of approximately 1,000 square metres of woodland.”
It went on to say: “The existing site is already intervisible with the coast, and the proposed relocation of boat storage would likely increase its visibility rather than reduce it. Without supporting evidence in the form of a Landscape and Visual Impact Assessment (LVIA) or Zone of Theoretical Visibility (ZTV) demonstrating that the development would be visually contained, the proposal appears contrary to the guidance contained within the SPG and the objectives of Policy 41.
“As a result, the proposed development is considered to detract from the special qualities of the National Park in this location and would be detrimental to the quality and character of the landscape character area in which the site sits, and as such does not comply [with policies].”
The application was refused on grounds including it being sited within previously undeveloped land within a flood zone, a lack of information on potential impacts on biodiversity, and it is “considered to detract from the special qualities of the national park in this location and would be detrimental to the quality and character of the landscape character area in which the site sits”.
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