In what the EIB has described as a "first-of-its-kind" transaction, the bank said that it will receive "milestone payments" on its investment "if and when predefined milestone events are successfully achieved".
The partnership agreement is the first "risk sharing" transaction to be signed under the InnovFin - EU Finance for Innovators programme which was recently established by the EIB Group and the European Commission. The UCB financing is supported by the InnovFin Large Projects instrument, which has been developed to improve access to risk finance for research and innovation projects emanating from a range of organisations including "larger" firms, universities and public research organisations, said the EIB.
A statement issued by the bank said that the UCB programmes to be funded have been selected from UCB’s "rich portfolio of potential breakthrough medicines" and include medicines at different stages of development which can "potentially help millions of patients".
"This is an innovative partnership and a first-of-its-kind transaction," said the EIB statement. "It is intended to truly share risks and returns among the partners and therefore to give incentives to UCB to invest ambitiously in its promising development programmes."
Life sciences expert Allistair Booth of Pinsent Masons, the law firm behind Out-Law.com, said: “This deal is interesting in that it highlights the extensive funding available to companies from the EIB under the new InnovFin - EU Finance for Innovators programme. Over the next seven years it is expected that €24 billion of financing for investment in research and innovation will be made available through InnovFin.”
The EIB is the long-term lending institution of the European Union and is owned by the EU member states. It makes long-term finance available for investment in order to contribute towards EU policy goals.
UCB, which is headquartered in Brussels, focuses on the development of medicines related to severe diseases of the immune system or of the central nervous system. The company has more than 8,500 employees in around 40 countries and generated revenue of €3.4 billion in 2013, according to the EIB.
EIB vice president Pim van Ballekom said: “We are pleased to be partnering with UCB in this breakthrough operation as its pipeline of compounds in development, as well as its expertise for developing those compounds, rank 'best-in-class'. The operation showcases the direct intervention and risk-taking capacity of the EIB and its role in supporting key research and development activities."
"We are aiming to pave the way and demonstrate that innovative financial instruments such as risk sharing co-development funding can make a difference in boosting research and innovation in Europe, and this is of the utmost importance for the future of Europe," said van Ballekom.
UCB chief executive Roch Doliveux said: "Our strategy is to focus on bringing innovative medicines to people suffering from severe diseases in neurology and immunology. We’re happy that our cutting edge research and innovation is yet again recognized by the EIB, and that they have chosen UCB as a first partner for their new at risk co-development funding approach. This will help to accelerate the development of several promising projects in UCB’s pipeline.”
The InnovFin - EU Finance for Innovators initiative was launched earlier this month and offers a range of tailored financial products and advisory services designed to facilitate access to finance for innovative businesses and entities in Europe, said the EIB.