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This is an HTML version of an attachment to the Freedom of Information request 'Spin out company valuations'.
 
 
Paul Philips 
 
[[FOI #18453 email]] 
22 October 2009  
Our Ref: FOI 2009/164 – F0072089 
 
Dear Mr Philips, 
 
Re: Freedom of Information (Scotland) Act 2002 – Request for Information 
 
Thank you for your email which was received by the University on 23 September 2009 timed 
21:32 hours requesting the following information: 
 
 
For the list of companies below, identified by the University of Glasgow as its spin out 
companies formed in the past five years, can you please provide the following 
information for each one: 
 
(a) valuation of company on incorporation; (b) value of any equity held by the 
University of Glasgow in each company; (c) names of all other shareholders; (d) current 
valuation of each company; and (e) how many of these companies have an operational 
base in Scotland. 
 
If the answer to (e) is that one or more of these companies is based outside Scotland, 
can you explain why the public purse is being used to create companies that do not 
create jobs in Scotland and do not contribute to the Scottish economy or to the tax 
revenue collected by HMRC. 
 
Is this a deliberate attempt by the University of Glasgow to avoid paying tax on its 
investments? 
 
Grannus Biosciences Ltd MD Biosciences Inflammation Discovery Services Ltd Crucial 
Genetics Ltd Mode Diagnostics Ltd Xanic Ltd Reactivlab Ltd TMRI Ltd Senectus 
Therapeutics Ltd Pathfinder LLC Cara Therapeutics Inc 
 
 
 
 
 
 
 
DATA PROTECTION AND FREEDOM OF INFORMATION OFFICE 
Main Building, University of Glasgow, Glasgow G12 8QQ 
Data Protection: Telephone: 0141-330-3111 E-Mail: [email address] 
Freedom of Information: Telephone: 0141-330-2523 E-Mail: foi@gla.ac.uk 
The University of Glasgow, charity number SC004401 
 
 
 
 
 
University’s Response 
 
 
a.)  The University of Glasgow, after consultation with the companies in question, has 
agreed to release the requested information for the following: 
 
Pathfinder LLC – no valuation on incorporation 
TMRI Ltd - no valuation on incorporation 
Crucial Genetics Ltd - no valuation on incorporation 
 
For the remainder of the companies, and after consultation, the University considers 
that disclosure of the valuation on incorporation of such spin out companies would be 
likely to prejudice substantially the commercial interests of both the University and the 
spin out companies. 
 
Notwithstanding the result of the “harm test”, section 33 of FOISA does not provide an 
absolute exemption to the general entitlement to information. The University has 
therefore considered whether, notwithstanding the exemption, it is in the public interest 
to release the information. 
 
The University has considered the public interest by applying the “public interest test”. 
That is, the University has balanced whether the release of the information is in the 
public interest against whether disclosure would substantially prejudice its own, or 
another person’s, commercial interests. The view of the Office of the Scottish 
Information Commissioner (OSIC), in its advice on the application of the “public 
interest test”, is that the public interest should not be interpreted as “of interest to the 
public”. That is, the potential release of the information must be in the interests of the 
public and not merely of individual interest. The public interest in the disclosure of the 
information requested is slight. The University of Glasgow operates in a very 
competitive environment and the public interest is in ensuring the continuing success 
of the University. The disclosure of the requested information would be likely to be 
detrimental to the public interest by inhibiting organisations from entering into 
relationships and working with the University. This potential to fail to achieve best 
value would substantially prejudice the commercial interests of the University of 
Glasgow.  
 
In addition, the University must also consider the commercial interests of each of the 
spin out companies. Each operates in a very competitive environment and any release 
of information concerning its valuation may be likely to lead to their competitors gaining 
an advantage. This would in turn be likely to adversely affect the commercial position 
of these organisations thus potentially jeopardising the position and reputation of the 
University in future activities or negotiations with others for similar initiatives. 
 
The University therefore concludes that the “public interest test”, as required when 
applying section 33 of the FOISA, is met as the disclosure of the information requested 
would prejudice substantially the negotiating position of the University. The public 
interest in withholding the information is greater than the public interest in its release. 
 
 
 
 
 
 
b.) 
There have been no recent material events such as shareholder transactions for these 
companies which could be used as a method to base a current valuation. Any value of 
equity held by the University of Glasgow would therefore be both speculative and 
notional. Accordingly, the University of Glasgow does not hold the information that you 
have requested and is not aware of any other public authority that could respond to 
your request.  Section 17 of FOISA states that where public authorities receive 
requests for information that they do not hold, they must issue a notice advising that 
they do not hold the requested information.  
 
c.) 
The names of all other shareholders for the spin-out companies, with the exception of 
Cara Therapeutics Inc, are attached in Appendix A.  Please note the information within 
Appendix A, is also available from Companies House 
http://www.companieshouse.gov.uk/.  
 
The University of Glasgow, after consultation with the company, considers that 
disclosure of the names of all other shareholders in Cara Therapeutics Inc would be 
likely to prejudice substantially the commercial interests of both the University and the 
spin out company. 
 
Notwithstanding the result of the “harm test”, section 33 of FOISA does not provide an 
absolute exemption to the general entitlement to information. The University has 
therefore considered whether, notwithstanding the exemption, it is in the public interest 
to release the information. 
 
The University has considered the public interest by applying the “public interest test”. 
That is, the University has balanced whether the release of the information is in the 
public interest against whether disclosure would substantially prejudice its own, or 
another person’s, commercial interests. The view of the Office of the Scottish 
Information Commissioner (OSIC), in its advice on the application of the “public 
interest test”, is that the public interest should not be interpreted as “of interest to the 
public”. That is, the potential release of the information must be in the interests of the 
public and not merely of individual interest. The public interest in the disclosure of the 
information requested is slight. The University of Glasgow operates in a very 
competitive environment and the public interest is in ensuring the continuing success 
of the University. The disclosure of the requested information would be likely to be 
detrimental to the public interest by inhibiting organisations from entering into 
relationships and working with the University. This potential to fail to achieve best 
value would substantially prejudice the commercial interests of the University of 
Glasgow.  
 
In addition, the University must also consider the commercial interests of each of the 
spin out companies. Each operates in a very competitive environment and any release 
of information concerning its shareholders may be likely to lead to their competitors 
gaining an advantage. This would in turn be likely to adversely affect the commercial 
 
 
 
 
position of these organisations thus potentially jeopardising the position and reputation 
of the University in future activities or negotiations with others for similar initiatives. 
 
The University therefore concludes that the “public interest test”, as required when 
applying section 33 of the FOISA, is met as the disclosure of the information requested 
would prejudice substantially the negotiating position of the University. The public 
interest in withholding the information is greater than the public interest in its release.   
 
d.) 
Again, there have been no recent material events such as shareholder transactions for 
these companies which could be used as a method to base a current valuation. Any 
current valuations held by the University of Glasgow would therefore be both 
speculative and notional. Accordingly, the University of Glasgow does not hold the 
information that you have requested and is not aware of any other public authority that 
could respond to your request.  Section 17 of FOISA states that where public 
authorities receive requests for information that they do not hold, they must issue a 
notice advising that they do not hold the requested information.  
 
e.) 
Of the ten spin companies, eight have operational bases in Scotland and two are 
based outwith Scotland. 
 
f.) 
The University of Glasgow does not hold the information that you have requested and 
is not aware of any other public authority that could respond to your request.  Section 
17 of FOISA states that where public authorities receive requests for information that 
they do not hold, they must issue a notice advising that they do not hold the requested 
information.  
 
Both companies with a base outwith Scotland, Pathfinder LLC and Cara Therapeutics, 
were created and financed by US based groups not the University of Glasgow. As is 
traditionally the case, these companies have, if appropriate, as part of their 
development programmes sought and obtained University of Glasgow owned 
Intellectual Property, in return for equity stakes in the companies. 
 
g.) 
The University of Glasgow does not hold the information that you have requested and 
is not aware of any other public authority that could respond to your request.  Section 
17 of FOISA states that where public authorities receive requests for information that 
they do not hold, they must issue a notice advising that they do not hold the requested 
information. 
 
Please note, the University is an exempt charity within the meaning of schedule 2 of 
the Charities Act 1992 and as such is a charity within the meaning of section 506(1) of 
the Income and Corporation Taxes Act 1988 (ICTA 1988). Accordingly the institution is 
potentially exempt from taxation in respect of income or capital gains received within 
categories covered by s.509 of ICTA 1988 or s.256 of the Taxation of Charitable Gains 
Act 1992, to the extent that such income or gains are applied to exclusively charitable 
purposes.  The institution received no similar exemption in respect of Value Added 
 
 
 
 
Tax. The University is registered with the Office of the Scottish Charity Regulator under 
number SC004401. 
 
The supply of documents under the terms of the Freedom of Information (Scotland) Act 2002 
does not give the applicant or whoever receives the information any right to re-use it in such a 
way that might infringe the Copyright, Designs and Patents Act 1988 (for example, by making 
multiple copies, publishing or otherwise distributing the information to other individuals and the 
public). The Freedom of Information (Scotland) Act 2002 (Consequential Modifications) Order 
2004 ensured that Section 50 of the Copyright, Designs and Patents Act 1988 (“CDPA”) 
applies to the Freedom of Information (Scotland) Act 2002 (“FOISA”).   
 
Breach of copyright law is an actionable offence and the University expressly reserves its 
rights and remedies available to it pursuant to the CDPA and common law. Further information 
on copyright is available at the following website: 
 
http://www.ipo.gov.uk/copy.htm 
Your right to seek a review 
 
Should you be dissatisfied with the way in which the University has dealt with your request, 
you have the right to require us to review our actions and decisions. Please refer to the 
Review Procedure (http://www.gla.ac.uk/services/dpfoioffice/policiesandprocedures/foisa-
complaintsandreview/) for further information.  All complaints regarding requests for 
information will be handled in accordance with this procedure. 
 
Yours sincerely, 
 
 
 
 
Data Protection and Freedom of Information Office