Stories of Growth

Ian Shott, Arcinova: “I was considered a maverick”

As part of our Stories of Growth series, we hear from the co-founder of a drug development company in Northumberland.

13 October 2021

In 2018, BGF invested £5 million into Arcinova, an Alnwick-based pharmaceutical research and development company. The funding enabled Arcinova to accelerate its growth, by increasing production capacity and recruiting more staff. We also provided strategic support, helping to strengthen Arcinova’s board and management team. Learn more about the business from its co-founder, Professor Ian Shott, in this in-depth interview about his life and career to date.

Professor Ian Shott, Founder of Arcinova

I studied chemical engineering at Imperial College and joined ICI when I graduated, which used to be one of the largest companies in the world. It wasn’t necessarily my dream to work for someone else, but this was the seventies. In the seventies, people got degrees, joined big companies, and ended up with a good pension after a job for life.

In my early thirties, I was headhunted by Lonza, which was Switzerland’s largest fine chemical company. I was the first person on the board in a hundred years who didn’t speak German as a mother tongue. From there, I joined a Nasdaq-listed company called ChiRex, which was sold to a French multinational chemical company.

By this point, I was tired of big corporations and frustrated with corporate politics. I decided to stop jumping around the world, dragging the family through my international career, and do something different.

“I was tired of big corporations and frustrated with corporate politics”

I was always committed to running things, even at a young age. In the large company corporate world, I had bought businesses, taken businesses over and moved to different territories. I was in China when it was a bicycle economy. I was in India in the early eighties. I had seen much of the world.

I created my first company, Shott Associates, on April Fool’s Day, 2003 and that was the first day since I was 14 when I didn’t have a job with income.

A hairy trip

I went on to buy an unwanted chemical plant in North Wales and a bankrupt business in Durham in addition to the original consultancy. Then, in 2004, I created Excelsyn – as in, the ‘excellent synthesis’ of chemicals for business – which majored on drug development.

We had a hairy trip through the financial crisis. During the financial crash, nine out of 10 of the world’s top pharma companies changed their CEO over an 18-month period. All the new CEOs cancelled many of their production orders to release working capital, got rid of a third of their development pipelines, which was primarily the stuff that was outsourced. Excelsyn did outsourced development and production, so we took a hammering. We took on venture capital and I renegotiated everyone’s payment conditions, retaining most of the employees.

We stayed profitable and sold to a US company a year later in 2010. During the sale transaction I created Shott Consulting, which became Shott Trinova when a former colleague, Paul Ryan, joined as finance director in 2012.

The gemstone of all

The concept was to help other businesses whilst taking a minority interest and drive a modified strategy to multiply enterprise value rapidly so that the founders could retire with money and leave a legacy. My three rules were that we would only take on businesses where I understood the sector and the technology, and where I believed the people chemistry was right, so I could leverage my international network to accelerate growth and performance.

We had 150 approaches from different companies, individuals or sites. We secured 12 contracts and six converted into us taking an equity position and directorships as chairman and finance director. Two of those we backed out from with no loss and four of them we sold for between five and 17 times their original enterprise value.

The gemstone of all was the Arcinova site in Alnwick, Northumberland. At Arcinova, the focus is to make new drugs more effectively, using more direct manufacturing processes that dramatically reduce the cost whilst accelerating the development and scale up processes.

BGF invested in Arcinova in 2018, its first investment in life sciences. In 2021, the business was acquired by Quotient Sciences, a drug development and manufacturing accelerator backed by private equity firm Permira. We were majority owners and made a huge return.

Lots of broken bones

I was born in Tanganyika, East Africa, on the Indian Ocean. My first memories were of living in a missionary village north of Nairobi. I was then in Plymouth briefly before returning to Africa in a move to Johannesburg. Having been born in a German protectorate I ended up with no nationality and subsequently became a South African citizen before moving through Nelspruit to Swaziland and Rhodesia, and then back to the UK in Southampton.

My father was an accountant, and my mother was a nurse. Their relationship was tempestuous so there was lots of breaking up and coming together. My mother was always around but my father was an irregular feature and he died when I was 14.

I went to 13 schools by the time I was 13 in six countries and two continents. Always in the wrong colour blazer with the wrong accent. I had a “Pommy” accent in South Africa when the sanctions were coming in, then back in England with a South African accent when the UK and US were trying to change the politics of Rhodesia and South Africa.

I am a person who finds it difficult to back down when confronted with a challenge and several times ended up on wastelands surrounded by an angry gang of kids. It’s hard to fight 20 to 30 others and consequently I ended up with some broken bones. These are tough lessons that teach one to be more thoughtful when dealing with risk and conflict, and to pre-empt crises and danger whenever possible. These are lessons that have served me well in my international career, both corporate and entrepreneurial.

Playing cards through the night

At university I was one of the worst students. I missed a third of my lectures, frequently played cards for money through the night, ran a second-hand car business and played water polo for the university – but, subsequently, in later life, and quite accidentally, I’ve ended up a visiting professor at Newcastle, Nottingham and Oxford universities. I’ve been the president of the Institution of Chemical Engineers, too and am a fellow of the Royal Academy of Engineering.

I was also a governing board member at Innovate UK. I set up an enterprise hub at the Royal Academy of Engineering that has helped 100 businesses be created from university spinouts.

“I was one of the worst students”

I’m 64. I’ve had a pretty busy life. When BGF invested I had five separate businesses, in all of which I was chairman and invested. However, my family has been urging me to retire for many years, so my ambition at the moment is to improve my work life balance. I last saw my two-year-old grandson when he was two months old. My daughter and her husband and son live in Singapore. The current plan is semi-retirement, working only 25% of the time, leaving much more time for family engagement – by necessity involving significant international travel – as well as hobbies and pastimes.

While I was a senior executive in many major multinational companies, I was often considered a maverick and many of those colleagues were not surprised when after 20 years of corporate life I became a serial entrepreneur. I am not driven and motivated by money, and have had a very comfortable life, but I am always focused on winning and creating wealth for the benefit of the many.

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