The charities Cancer Research UK and Wellcome Trust plan to merge two companies Syncona and BACIT, to create a billion-pound life sciences investment firm.

Subject to approval by shareholders in BACIT, the UK investment firm will acquire a majority or all of the interest in the Pioneer Fund held by Cancer Research UK.

BACIT will also acquire Syncona, founded by the Wellcome Trust, which owns an existing portfolio of life science investments, many of which are focused on oncology.

If approved, a proposal to combine BACIT with Syncona, an independent subsidiary of Wellcome, could create a £1 billion investment company listed on the London Stock Exchange.

The new firm, renamed Syncona, hopes to invest £100 million a year into promising life sciences projects.

The firm will also recruit the investment team of Syncona and Cancer Research UK. In return for their holdings, Cancer Research UK and the Wellcome Trust will receive new ordinary shares in BACIT.

At least a quarter of life science investment will be committed to oncology projects and businesses.

A pipeline agreement, which would give the new firm the first option on treatments developed by Cancer Research UK.

In the longer term, standalone companies created as a result could have valuations in excess of £1 billion.

Cancer Research UK and its commercialisation arm, Cancer Research Technology created the £70 million Pioneer venture life sciences fund in 2012.

It aimed to bridge an investment gap between cancer drug discovery and early development, by taking potential cancer drugs from discovery through to the start of phase 2 trials.

Wellcome set up Syncona in 2012 with a £200 million investment, increased to £250 million, to help address the lack of long-term funding for UK biotech.

Wellcome director, Dr Jeremy Farrar, said: “We launched Syncona with a long-term vision to offer support for some of the best innovators in life sciences, and to deliver impact to patients.”

“It has already achieved great things, and this proposal, which will see it align with BACIT and Cancer Research UK, will allow it to spread its wings and expand its horizons further. We see this as a logical next step for Syncona and we look forward to watching it, and the companies it supports, expand and prosper.”

Further details of the deal are available on the Syncona website.