What Diabetes UK doesn’t make clear about the £50 Million Fund for a Cure

Back in 2022, Diabetes UK announced the Type 1 Diabetes Grand Challenge, built around a £50 million gift from the Steve Morgan Foundation intended to accelerate research towards better treatments and ultimately a cure. It was described as the largest single philanthropic gift ever made to diabetes research in the UK.

The gift also came with an intensely personal story: Steve Morgan’s son has type 1 diabetes. That may help explain why the announcement was received so positively and why there appears to have been so little scrutiny of what the £50 million arrangement actually involved. But there’s a ‘catch’!

The research it funds may ultimately prove extremely important. But this is not £50 million simply handed over with few strings attached. Firstly, the money is tightly restricted, many ordinary expenses excluded, and researchers and universities accepting the funding must agree to onerous, extensive and continuing conditions covering how the research is conducted, how discoveries are handled and what happens if those discoveries later have commercial value.

This is all contained within contractual agreements which also reveal that there are ongoing rights for the Steve Morgan Foundation connected to the research, and if successful discoveries lead to a product that’s marketable – whether a ‘cure’, or not - some of the resulting income can flow back to the Foundation i.e. there’s the possibility of a return on the investment.

That makes the word “gift” considerably more complicated than it first appears — and the fuller picture deserves to be understood.

This is not how most of us donate

An ordinary supporter might run a marathon, raise £1,000, make a monthly donation or leave Diabetes UK money in their will. Unless that gift is specifically restricted – and there’s nothing on the website to explain how, or even if, this could be done - once the money raised is handed over to Diabetes UK, control over how it is spent passes to the charity and they decide how it can be applied across the organisation.

The Steve Morgan Foundation’s £50 million works very differently. Steve Morgan has publicly emphasised that he did not want donated money being swallowed up by administration and wanted it directed towards finding a cure.

The Grand Challenge is very specific about the costs that it is willing to cover such as researchers, consumables, equipment and project support. universities are not given unrestricted money to develop projects funded under the Foundation, control is instilled in their contracts along with rights for the Foundation to determine the direction of research and the priorities that researchers should follow. They can’t even make a announcement in the media without approval from the Foundation.

While there is nothing inherently wrong with a major funder negotiating strict conditions, this is very different to the idea of a “gift” to find a cure and is clearly a different kind of arrangement from the donation made by most Diabetes UK fundraisers and supporters.

How does the £50 million fund work

Although the £50 million Grand Challenge is presented as one programme, the funding is administered through two charities, Diabetes UK and Breakthrough T1D UK (formerly JDRF UK), with different contractual arrangements. Universities receiving grants do not simply receive the money and carry on independently. The agreements govern how funding is spent, how research is conducted and reported, and what happens if discoveries become commercially valuable.

The Grand Challenge funds three specific areas of type 1 diabetes research:

1.    Replacing beta cells: Developing ways to replace, regenerate or protect the insulin-producing cells destroyed by type 1 diabetes, including growing new cells from stem cells for transplantation. The aim is to enable people with type 1 to produce their own insulin again.

2.    Tackling the root causes of type 1 diabetes: Developing treatments that prevent or stop the immune system from attacking insulin-producing cells, potentially protecting remaining cells or preventing the destruction of transplanted replacements.

3.    Developing novel insulins: Creating new types of insulin, including ultra-fast-acting and glucose-responsive ('smart') insulins that could automatically respond to changing blood glucose levels, reducing the risk of highs and lows.

It’s important to note that while novel insulins could improve the treatment of type 1 diabetes and are not a cure the underlying condition, so not all £50 million is for a cure and it appears that focusing on novel insulins is intent for commercialisation.

Conditions that continue after the grant is paid

Importantly, a potential cure for type 1 diabetes could also become a valuable commercial asset, with the rights licensed or sold to another company for profit. A university or biotechnology company might develop a promising treatment and then sell or license the rights to a larger pharmaceutical company to undertake clinical trials, manufacture it or bring it to market. Those rights could subsequently be sold or licensed again. Research originally funded by a charitable gift could therefore generate substantial commercial income before a treatment ever becomes available to people living with type 1 diabetes.

Terms under Breakthrough T1D UK

The Grand Challenge conditions published by JDRF UK, now Breakthrough T1D UK, are particularly explicit. They give Breakthrough T1D UK and the Steve Morgan Foundation a combined entitlement to 10% of defined net income arising from the commercial use of funded research, capped at five times the value of the original grant.

For example, a £2 million research award could potentially generate up to £10 million in combined returns to the two organisations. This is the contractual maximum, not a guaranteed payment, and the agreement does not publicly specify how the income would be divided between them. It should not be assumed that the Foundation and Breakthrough T1D UK would each receive half.

Terms under Diabetes UK

Diabetes UK administers its Grand Challenge awards under different contractual arrangements. Its partnership conditions state that universities owe obligations separately to both Diabetes UK and the Steve Morgan Foundation, with each entitled to enforce its rights. They also provide for a separate Revenue Sharing Agreement if discoveries arising from the funded research are commercially exploited.

Unlike the Breakthrough T1D UK terms, the publicly available Diabetes UK Grand Challenge conditions do not specify a fixed percentage of commercial income payable to the two organisations.

How does this differ from ordinary charitable research funding?

Revenue sharing itself is not unusual in medical research. Diabetes UK's standard research agreements already contain commercialisation provisions, with its published revenue-sharing arrangements providing for approximately 35–40% of relevant net revenue in specified circumstances where it fully funded the research. Wellcome's standard share is 25%. These arrangements allow research charities to recover some of the financial value created by successful discoveries and potentially reinvest it in further research.

The distinction with the Grand Challenge is that the Steve Morgan Foundation is not simply providing £50 million and walking away. Under both funding routes, the original philanthropic funder retains contractual rights connected to research financed by its donation, including potential rights to future commercial income.

That creates an important contrast with how the funding has been presented publicly. The £50 million has repeatedly been described as a philanthropic gift towards finding a cure for type 1 diabetes. Yet the agreements impose continuing obligations on the institutions receiving the money and preserve financial rights for the Foundation if discoveries become commercially valuable.

This is not a simple no-strings gift. The funding is restricted to specified purposes, research institutions must comply with extensive contractual conditions, and successful discoveries could generate returns to the original donor's Foundation long after the grants have been paid — potentially exceeding the amount awarded to an individual research project.

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About the editor

Samantha is editor of Libre Life and founder of Love My Libre. She writes about diabetes medtech, CGM wear, hybrid-closed loop systems and practical real-world device use.