west midlands nhs innovations conference 2006 ‘sharing innovation for healthcare’
TRANSCRIPT
West Midlands NHS Innovations Conference 2006
‘sharing innovation for healthcare’
Welcome and Introduction
Alan Wenban-SmithChairman
MidTECH
‘sharing innovation for healthcare’ – 8 March 2006
Conference AimTo bring together key stakeholders involved in taking NHS innovations from idea to application
– Share experiences & best practice– Identify challenges & opportunities– Celebrate success– Create contacts
‘sharing innovation for healthcare’ – 8 March 2006
Some different perspectives …
• Chief Executive’s view – Mark Goldman• Innovation Hub view – David Gleaves• Innovator’s view – Monica Spiteri• Industry view – Matthew Harte• Investor’s view – Terry Swainbank
• Panel discussion
‘sharing innovation for healthcare’ – 8 March 2006
Who is MidTECH?
• Top down:– MidTECH is the NHS Innovations ‘hub’ for the
West Midlands– Our job is to help Trusts to identify and manage
innovations arising from their work– We provide expertise and resources
• Bottom up:– Innovation is a bottom-up process– We have a regional membership– We are there for all NHS Trusts in the region
‘sharing innovation for healthcare’ – 8 March 2006
What is MidTECH for?
• Improving health care by making good use of new ideas
• Realising potential income for NHS, Trusts and inventors
• Generating employment in the national and regional economies
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MidTECH Strategy• Membership
– NHS Trusts in the West Midlands– Members’ service entitlement menu– ‘Pay as you go’ also available
• Resources– Core funding: for sustainable capability– Exploitation funds: for investment in projects
• Operation– Not for profit: commercial income ploughed back– Grow regional ownership, reduce central dependency
‘sharing innovation for healthcare’ – 8 March 2006
NHS Trusts Companies
IndustryNHS
Collaborative Development Project
MidTECH Medilink WM
Includes:• prototyping• design • manufacture
Includes:• clinical trials • access to staff• know how
Innovation
SupplyNew product
or service in use
NHS Procurement Process
Manufacture and marketing (NHS & wider)
Idea for a new
product or service
Staff ideas
Know how
Medical schools Industrial research
Specific agreement• Development Plan• Partner Responsibilities• Costs & Risks• IP arrangements• Benefits• Commercialisation Plan
The MidTECH approach
‘sharing innovation for healthcare’ – 8 March 2006
New NHS
New Business Opportunities
Dr Mark Goldman
Chief Executive
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The NHS
• Conceived in 1948 after
the 2nd World War
• “Healthcare free at the
point of delivery
according to need”
• The envy of the world
‘sharing innovation for healthcare’ – 8 March 2006
‘sharing innovation for healthcare’ – 8 March 2006
The changing face of healthcare
– Diversity of provision
– Care in the community
– Self help
– Choice
‘sharing innovation for healthcare’ – 8 March 2006
Structure of the NHS
Secretary of State
Department of Health
Strategic Health Authority
28
Primary Care Trusts
Acute Hospitals206
298
Monitor
Foundation Trusts
Private Sector
31
‘sharing innovation for healthcare’ – 8 March 2006
‘sharing innovation for healthcare’ – 8 March 2006
‘sharing innovation for healthcare’ – 8 March 2006
How can you help?
Understand us and our problems
Bring us solutions but respect our culture
Recognise our achievements
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What’s in it for YOU?
• Growing market
• Recession proof
• Global marketing opportunity
• Under developed product ranges
• Wide product requirements
• New approaches to healthcare
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The opportunity
• £15 billion non pay expenditure
• Massive Health Spend 10% GDP by 2008
• Local Trusts
– University Hospital Birmingham £300m
– Heartlands and Solihull £240m
– Manchester United £230m
• Spend on equipment alone approximately 28%
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Markets
New
Existing
Markets
Existing NewProducts
Existing marketExisting product
eg business as usual, Choice
New marketExisting product
New marketNew product
eg innovation
Existing marketNew product
eg new model of healthcare
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Potential areas for development
Low Tech Opportunities
• Cleaning materials
• Disposable plastics/drapes/clothes
• Manual handling equipment
• Protective clothing
• Wheelchairs/trolleys/stretchers
• Tagging and security devices
• Anti bacterial support
• Furnishings, packaging
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Complex products
• Communication
• Instrumentation
• Software solutions
• Implantable devices
• Drug delivery systems
• Lab equipment
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Medipark
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Purpose of the Medipark
– Enhance research
• Attract other organisations
• Attract funding
– Enhance reputation of HEFT
• Recruitment and retention of the best people
– Support regeneration
• Jobs
• businesses
Infection Control – Working Together with Industry
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MRSA
• Methicillin Resistant Staphylococcus
Aureus
• 30% people carry the germ
• SA and MRSA not risk to healthy
• 40% SA cases resistant to meth and
antibiotics
• The Chief Medical Officer report
Winning Ways – working together to
reduce Healthcare Associated
Infection in England
• Everyone has a role to play - nurses,
doctors, cleaners, patients, visitors
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Research
– Hygieia – SkinSure barrier cream
– Bioquell
– 2 hour MRSA rapid test
– Surface coatings
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Practical application
– Hand gel dispensers
– Coated bags and aprons
– Disposable bags
– Cleaning systems
– Voice activated alerts
– Patient tagging
– Telemetry
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Learning together – the Initial experience
Initial – a cleaning company
Initial – hygiene solutions
Initial – public health education
Initial – a partner in healthcare
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Centre of excellence
National and international
interest
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Conclusion
Healthcare needs innovation and new products to deliver a
new agenda
Healthcare is a global business opportunity
NHS Innovations in the West MidlandsA perspective from the NHS innovations hub
David GleavesDirector
MidTECH
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Ingredients for a successful Innovations Hub
• Accessible to regional NHS
• Capability & Capacity
• Networked
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MidTECH Plan
2004-5: Establish baseline capability & client base
2005-6: Demonstrate capability; grow client base & networks
2006-7+: Enhanced capability & delivery
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2005-6 Client Base
• Client base of 33 NHS bodies– Increase of 100% on 2004-5– 66% of total
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Coverage – Birmingham & the Black Country
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Coverage – Shropshire & Staffordshire
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Coverage – West Midlands South
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2005-6 Delivery
• Over 90 Innovations registered• 60% increase on 2004-5
• 10 Patents, designs & trademarks• 3 times the number for 2004-5
• First NHS-University agreement• 6 more in pipeline
• 20 development projects• 2 licence deals
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2005-6 Networks
• Working relationships:• Medilink West Midlands• HealthTech (WMG)• CHID• Regional design & prototype community
• Stakeholder relationships:• DH, DTI, AWM, regional University sector
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2006-7 DeliveryMeeting clients’ growing needs
• Working in partnership with Trusts to deliver their commercialisation plans– Joint ventures, spin-out companies, science parks
• Developing regional differentiators– Capability mapping– Focus on design & prototyping
• Promoting regional NHS innovation– Conference– Competition– Surgeries– Local events
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2006-7 & beyond
• Capability– Marketing & Communications– NHS Designer (unique to UK NHS)– “Embedded” innovation “champions”– Plan to recruit senior innovation manager– Forming as CLG in March 2006– Secured 3-years further DTI support
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Networks & Partnerships
• Working with AWM & partners to deliver regional economic strategy
• Improve industrial links through co-location with Medilink West Midlands
• Develop regional NHS VC network• Improve links with NHS National Institute for
Innovation & Improvement, HPC, CEP, etc.
An Innovator’s Perspective
Monica SpiteriProfessor in Respiratory Medicine
University Hospital of North Staffordshire
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Society has changed dramatically
The Public expects and demands scientific and engineering advances.
Immediate and rapid new solutions, new gadgets and new systems.
Improvement in quality of life and, Aspiration to ‘Dr Who-like’ immortality
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Public Needs drive NHS Strategy
To enhance public health and well-being, the NHS has
To improve service delivery and patient access.
To invest in and deliver technological and pharmacological innovations.
‘sharing innovation for healthcare’ – 8 March 2006
What price to pay for innovation?
A delicate interplayNHS resources not bottomless. Which innovations, devices or drugs, are
‘essential’ vs merely ‘nice-to-have’.Patient benefit vs costs of scientific progress.Safe clinically effective vs rapid development,
commercialisation, implementation.
‘sharing innovation for healthcare’ – 8 March 2006
Recent NHS Initiatives
Healthcare Industries Task Force (2003)
• Joint venture, NHS and Industry
• Explored common grounds of working - To stimulate/promote NHS innovation. To facilitate commercial realisation. To speed up implementation of target
discovery into the clinical arena.
‘sharing innovation for healthcare’ – 8 March 2006
HITF actions - Crucial and timely
Medical device evaluation serviceNHS Innovation Centre and hubNHS regional procurementBuilding R&D capacity – UK Clinical
Research CollaborationTraining &Education
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“Best Research for Best Health”NHS Science and Innovation
Investment Framework, 2006A National Institute for Health ResearchA FacultyAcademic Medical CentresExpanded Funding streams and
Technology PlatformsNew Innovation funds
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NHS NEW FUNDING SCHEMES Responsive funds – for applied and practice based
research in areas important to front-line staff Programmes of applied research – allocated
competitively to NHS trusts for areas of high priority to the NHS
Challenge fund for innovation - to encourage well-managed risk-taking and innovation in the NHS
RISC (Research for Innovation, Speculation and Creativity) awards - to ensure that new and radical ideas can be developed and tested.
‘sharing innovation for healthcare’ – 8 March 2006
EXCITING BLUEPRINT
☺a dream come true for NHS researchers
Or
☻just wishful thinking!
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ENSURE DELIVERY, NOT FAILURE
Who can ensure it happens in the NHS?How will the best ideas for patient benefit be
heard in the NHS?What ‘medium’ is best placed to progress
innovative ideas across traditional boundaries in the NHS, however daring at the time?
‘sharing innovation for healthcare’ – 8 March 2006
Time to change the balance?
From a loaded top-down approach (systems organised along Institutional agendas)
To a bottom-up approach (engaging and guiding teams of players at the clinical front).
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Opportunities for Innovation in NHS
Largest skills-mix platform in UK (>1M staff); greater than health-care technologies industry (~ 2000 companies; 50,000 personnel).
NHS staff already work in teams under diverse clinical situations for patient benefit.
First-hand knowledge of niche areas in diagnosis / therapy requiring urgent innovation and development.
NHS is universally established, visible to the Public.
Thus, the NHS community offers
Unique opportunity to drive growth of, and to implement, technological
pharmaceutical and service innovations.
‘sharing innovation for healthcare’ – 8 March 2006
Difficulties of innovating in NHS NHS staff struggle to establish research portfolios against a
backdrop of heavy clinical commitments and targets. Endless difficulty in getting ideas heard and securing support
funds, losing out to university-based counterparts. Academic agendas driven by institutional politics and
research assessment exercises, not by patient / NHS needs – clinical researchers left frustrated.
Intricate, but necessary, regulatory / legal requirements and systems – process too complex!
Slow translation journey – from idea to trials to clinical endorsement to bedside, delays patient benefit.
‘sharing innovation for healthcare’ – 8 March 2006
Future challengesUrgent need for radical change in attitude to research
across the NHS.Encourage and stimulate an entrepreneurial culture
amongst NHS employees.Harvest, groom, and support... Allow ‘thinking outside
the box!’.Foster a pipeline of innovations from NHS grassroots.Ensure NHS innovator owns and drives the venture,
in partnership with industry – ‘feel good factor’.
‘sharing innovation for healthcare’ – 8 March 2006
FUTURE CHALLENGES
Empower staff to venture into unfamiliar technological territories – cross transfer knowledge and expertise.
Facilitate NHS Trust-Industry partnerships to enable cost effective, quick, safe, reliable products for our patients.
Reducing the Burden of Lung Cancer :investment in superior screening tools
A multi-disciplinary Team Project
University Hospital of North Staffordshire
working together with
Patient Groups (Macmillan & BLF Breathe Easy)
‘sharing innovation for healthcare’ – 8 March 2006
CLINICAL NEED
• Lung cancer leading cause of deaths in UK: 1 in 13 men and 1 in 23 women develop lung tumours.
• Survival rates remain poor.• Only 13% can be cured, having surgery as first
treatment option; surgical rates in England lag behind US and Europe.
• 85% of lung cancers originate within the bronchial wall lining; and development is a multistage process over a long time period.
‘sharing innovation for healthcare’ – 8 March 2006
OCT PROJECT FOCUS• To develop safe, reliable, imaging device
based on infrared technology, OCT.
• To provide real time, ultrasound-like, optical histology of lung micro- structures.
• To identify in situ pathological changes.
• Ultimate OCT prototype to be cost-effective, portable and adaptable to the immediate clinical setting.
‘sharing innovation for healthcare’ – 8 March 2006
OCT Project Progress Time-line
1999 – March 2005 : Idea, project design and initial studies funded by Trust charitable funds; turned down by other sources.
April 2005 : Nominated for MidTECH Innovations award. May 2005 : Start of collaboration with MidTECH. June 2005 : Preparations for IP protection. July 2005 : UHNS patent application for OCT development in the lung. August 2005 : First meeting with industrial partner. September – December 2005 : Joint venture initiatives. December 2005 : 5 year clinical – technical plan established. February 2006 : First OCT system update delivered.
‘sharing innovation for healthcare’ – 8 March 2006
OCT Project adoption by MidTECH
Excellent example of energised progress of NHS-based innovation.
Our requirements were listened to, leading to an appropriate industrial partner.
MidTECH-mediated JV ensures that NHS staff continue to drive the innovation.
Whilst attracting “third-stream” funding from private sector, enabling seamless translation of device to clinical benefit.
‘sharing innovation for healthcare’ – 8 March 2006
NHS innovation Hubs
MidTECH
Funding‘Angels’
NHS, Industry,Venture capitalists
NHS-drivenideas
Staff & Patients
An Innovator’s Vision
An Industry Perspective
Matthew HarteManaging Director
BioCote Ltd
‘sharing innovation for healthcare’ – 8 March 2006
Why use Industry?
• Potentially very attractive customer• Many strengths of industry
– Flexible– Speed– Low Cost– Platform for innovation and ideas– Eager to provide solutions
• However we need guidance– What does the NHS want?
‘sharing innovation for healthcare’ – 8 March 2006
BioCote Experience
• Antimicrobial Powder coatings
• Original Invention 1994– Lacked ability to commercialise
• Financial backing 2001– Enabled commercialisation of technology– Continued technical development
• Partner with existing manufacturers
‘sharing innovation for healthcare’ – 8 March 2006
BioCote Experience
• Create solutions for existing products– Plastics, coatings and textiles – Silver based technology
• Technology and support– Marketing– Microbiological
• Wide range of applications– 40 Partners– Ability to create environments
‘sharing innovation for healthcare’ – 8 March 2006
Our Experience
– PASA– Rapid Review Panel– Architects– Designers– Building Contractors
– NHS Trusts• R&D• Procurement• Infection Control• Chief Executive• Director of Infection
Prevention and Control• Estates & Facilities
• NHS long and complicated
• Who do we need to speak to?
ALL!!!
Very time consuming!
‘sharing innovation for healthcare’ – 8 March 2006
Rapid Review Panel
• Convened by the HPA at the request of The Department of Health– Winning Ways and Towards cleaner
hospitals and lower rates of infection.– The panel provides a prompt assessment of new
and novel equipment, materials, and other products or protocols that may be of value to the NHS in improving hospital infection control and reducing hospital acquired infections.
‘sharing innovation for healthcare’ – 8 March 2006
Rapid Review Panel
• Received a rating of 3– More Clinical data required
• How do we get clinical data?– Finance– Timescales
• Will it make a commercial difference?
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Help and Experience
• Medilink WM– Guidance– Key contacts and events
• Heart of England NHS Foundation Trust– Very receptive to new innovations– Provided opportunity to create Biocote
environment within Hospital– Clinical evidence
• Partner Companies
‘sharing innovation for healthcare’ – 8 March 2006
What can the NHS learn?
• Innovation– Traditionally from smaller companies
• Financial pressures• Time constraints• Innovator vs Commercial
• NHS has a part to play– Backup clinical data– encouragement/direction (key proactive
individuals)
What an Investor Seeks
Terry SwainbankInvestment Director,Rainbow Seed Fund
Midven
‘sharing innovation for healthcare’ – 8 March 2006
Content
• Early stage investments
• Risk / investment profiles
Tackle obliquely – experience with PSREs – Rainbow Seed Fund
- what it looks for
- some examples
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Background
• Midven – Birmingham-based VC Fund Manager
• Specialises in early stage investment and manages 3 Funds– Advantage Growth Fund– Rainbow Seed Fund– HSBC Fund for the Midlands
‘sharing innovation for healthcare’ – 8 March 2006
Rainbow Seed Fund
• A venture capital fund specialising in seedcorn investment to commercialise research and innovation
• Risk finance; not an alternative to grant funding
• Investment opportunities drawn from dstl, 4 research councils (CCLRC, NERC, BBSRC, ) and UKAEA Fusion
• Another 6 PSRE’s will join shortly
• £6m fund
• DTI funded, through PSRE competitions
‘sharing innovation for healthcare’ – 8 March 2006
•Roslin Institute•Institute for Animal Health•John Innes Centre•Institute of Food Research•IGER•Rothamsted Research•Babraham Institute
•Porton Down•Fort Halstead
•Daresbury Laboratory•Rutherford Appleton Laboratoryt•Chilbolton Observatory
•UK Astronomy Technology Centre
•British Antarctic Survey•British Geological Survey•Centre for Ecology & Hydrology•Proudman Oceanographic Laboratory•Plymouth Marine Laboratory
•Centre for Emergency Preparedness and Response, Porton Down•Health Protection Agency Centre
or Infections Colingdale•Centre for Radiation, Chemical and
Environmental Hazards Chilton
‘sharing innovation for healthcare’ – 8 March 2006
Capital required
£10m
‘Early’ Stage Venture Capital
Funds
£20m
MainstreamVC
£10k
£250k
Business Angels /
RVCs
Trade Buyer or IPO
Stage of Development
Seed Funding
Risk Funding for Technology Businesses
£1m
‘sharing innovation for healthcare’ – 8 March 2006
The Rainbow ModelInitial filtering by TTO and RSF Investment Manager
Quick and simple approval process for RSF investments up to £25,000 on PoC, IP, market assessment, etc
RSF helps to build management team
RSF follow on investment leveraged by other risk capital, with help from RSF investor network
£££ Trade sale, IPO or licensing deal
‘sharing innovation for healthcare’ – 8 March 2006
So Far…..
• 25 first and 9 further investments• 10 Spin-out companies• Over £2.5m committed• Over £11m of external finance raised by our
portfolio• Portfolio value more than £0.5m above cost• Next Target: realisations into cash (exits)
‘sharing innovation for healthcare’ – 8 March 2006
RSF Portfolio
• Benefit from wide spread of research– Portfolio – diagnostics / medical physics /
biotechnology / space / security
• Includes deliberately a spectrum:– Modest service businesses which need to
generate revenues early – More profound businesses but have to
demonstrate progression to attract further investment
‘sharing innovation for healthcare’ – 8 March 2006
What will Rainbow invest in?Required
• Good science providing a platform for a differentiated product or service• IP properly protected and ownership untainted• Researchers (and their employer) keen to see their ideas commercialised• Experienced business managers willing to get involved• Proposed markets are preferably large and growing – might though be an
interesting niche
• A clear business model dealing with the possible need for additional finance
Not Required• Scientists left to their own devices to commercialise
‘sharing innovation for healthcare’ – 8 March 2006
Appraisal
• Will this investment make money?
• Can RSF negotiate satisfactory terms?
• Is there an exit for the investment?
• Will more money be needed, and if so where will it come from?
‘sharing innovation for healthcare’ – 8 March 2006
Risk v Return
• Market Risk– Maturity / Size / Barriers to Entry
• Technology Risk• Timescales • Reliance on further cash – milestones
that need to be achieved• Lower risk – 20 to 25% IRR target• Higher risk – 50 to 60% IRR target
‘sharing innovation for healthcare’ – 8 March 2006
Appraisal Issues
• Assessing technical merits– Use of research peers, specialist consultants– Technical advisory panel– Cautionary note – ‘best’ science might be elegant but not
necessarily best in a commercial context
• Assessing commercial potential– Market information often limited; researchers have often not
considered commercial potential (and indeed work of rival research teams)
– Rainbow cash for independent market / technical studies
‘sharing innovation for healthcare’ – 8 March 2006
Intellectual Property Issues for both the Investor and the Sponsoring Organisation
• Assign or licence? • Knowhow / patents• Who meets patenting costs? If attacked what is the
defence strategy?• Freedom to use• Dependence on IP held elsewhere• Pipeline agreements• Access to staff who created the IP to properly exploit
the IP
‘sharing innovation for healthcare’ – 8 March 2006
Licence or Spin-out
• Depends on scale - – single product aimed at a mature,
concentrated market – platform technology in a fragmented or
new market
• Need for additional finance downstream• Management• Patent costs
‘sharing innovation for healthcare’ – 8 March 2006
Spin-outs
Management – generally need to recruit from outside. Position of researchers / institutional goals?
Funding – almost always needs 3rd party funding (grants / SFLGS / business angels)
2nd Round Funding – VC coolness to early stage investments
‘sharing innovation for healthcare’ – 8 March 2006
Example of RSF Investment L3 Technology Ltd
• Initially £13k to fund proof of concept – an accurate cholesterol diagnostic - in 2003
• Followed by a £230k commitment to a spin-out which licensed the technology from CCLRC. RSF invested alongside others (total ~ £1m)
• RSF has an equity stake in the company as does CCLRC and two inventors.
• Seeking early licence; may need more cash
‘sharing innovation for healthcare’ – 8 March 2006
Example of RSF Investment Cellcentric Ltd
• £250k to fund a dedicated research programme at Babraham in the field of epigenetics.
• Cellcentric is developing an IP platform and has agreements over Cambridge and UCL IP. Likely revenues from cancer therapies,
• RSF has a shareholding in the company. Babraham has share options which will crystallise when patent filings are made.
• Will need to raise further (substantial) cash.
‘sharing innovation for healthcare’ – 8 March 2006
Example of RSF Investment Remo Technologies Ltd
• Telemetry devices to monitor patients developed by Dstl and a third party
• Modest markets – mainly in research• RSF invested £75k • Company has to achieve profitability on this cash –
unlikely to attract significant additional funding• Might use this company as a route to market for
related products
‘sharing innovation for healthcare’ – 8 March 2006
Further Information / Discussion
• www.rainbowseedfund.com
• www.midven.com
• Terry Swainbank 07710 491589
West Midlands NHS Innovations Conference 2006
‘sharing innovation for healthcare’