UK hospitals lose millions after AI startup valuation collapses

Two NHS hospitals in the UK have lost nearly £15 million ($18 million) between them due to the collapse in value of an AI startup.

Last month, The Register reported that seven NHS hospital trusts appeared to have lost millions following deals with Sensyne Health - a fledgling AI business trying to discover and develop new medicines - which saw company shares exchanged for patient data.

The company has since delisted from AIM, part of the London Stock Exchange, while some projects continue.

In recently published financial reports, the University of Oxford and Oxford University Hospital revealed it had lost £9.2 million ($11.12 million) of the value of the shares it had received while Chelsea and Westminster Hospital NHS Foundation Trust said the value of the shares it held had fallen by £5.4 million (c $6.52 million).

In 2017, the University of Oxford and Oxford University Hospital was set to receive in aggregate £5 million ($6 million) worth of equity in Sensyne - then called Drayson Technologies - as part of the Series C funding round. In its 2020-2021 annual report [PDF], Oxford University Hospital valued the equity it held at £7.3 million ($8.7 million).

But its published 2021-2022 annual report [PDF] shows its investments in associates and joint ventures took a £9.16 million hit down to the "revaluation of a shareholding in Sensyne Health PLC, due to falling share price over the year."

The hospital has been asked to comment.

In August 2018, Chelsea and Westminster Hospital NHS Foundation Trust said it would get a £5 million ($6 million) equity stake in Sensyne. Last month, it did not respond to The Register's questions over the current value of its stake.

However, in its latest financial report [PDF], the trust said the shares had been valued at £5.77 million ($6.95 million) in March 2021.

"As at 31 March 2022 the Trust recognised the shares at the AIM listed valuation," the report said, putting the figure at £387,000.

The trust has been contacted for further comment.

Sensyne's shares were delisted from AIM in May, after the agreement of a financing deal which saw the introduction of a new management team.

Other trusts have been hit by the collapse in the company's value. In September last year, Great Ormond Street Hospital for Children said it would receive 1,428,571 shares in Sensyne Health, when the price was around 140 pence, making the holding worth around £2 million ($2.4 million).

In its financial 2021-2022 report [PDF], the Trust recognized the shares at the AIM-listed valuation.

In a statement to The Register last month, the trust said: "Since Sensyne has delisted from AIM, GOSH cannot assign a value to the shares held. Funding from Sensyne is enabling the development of the hospital's data infrastructure to achieve our ambition to advance paediatric healthcare and research outcomes."

In a statement shared with The Register, Somerset NHS Foundation Trust said that under its deal announced in 2020, a total of 1,428,571 shares were issued at a notional value 175p per share, or about £2.5 million ($3 million).

"While the Trust still holds shares in the company, these are no longer traded on the stock market and as a result there is no readily available valuation of the shares," the statement said.

However, the trust said it had not yet shared data under the agreement. Milton Keynes University Hospital and Royal Wolverhampton NHS Foundation Trust also had deals with Sensyne worth £1.3 and £1.7 million respectively when they made the agreements. They have yet to publish their financial statements.

Cambridge University Hospital had agreed to receive 4,285,714 ordinary shares in Sensyne Health for its part in the research project, announced in December 2021. In a statement to The Register, it said it had not shared data with Sensyne, and held no shares. ®

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