Curing the world’s ills

Edie Lush

Edie Lush says UK biotech and medical research is world-class, but that start-ups face a challenge to raise capital and must think global from the start

If you’re an entrepreneur with an early-stage idea for a stellar piece of medical technology – perhaps a cancer drug or a new orthopaedic implant, there’s good news and bad news. The good news is the UK is as good a place as anywhere, except possibly the US, to start looking for investment. The bad news is that without a bit of luck and friends in the right places, it’s a tough game.

No surprise that in the middle of a massive credit squeeze, investment in early-stage technology companies isn’t as easy to come by as it was. However, healthcare companies have traditionally been seen as relatively recession-proof: people don’t stop getting sick just because the markets are down. As Kevin D’Silva, chairman of growing private surgical robotics company Prosurgics (which is looking to raise £8 million in its third funding round) says, ‘In boom times [medical technology markets] may not grow as quickly, but equally they are relatively safe havens in times of recession’.

That’s the theory, but 2008 may prove an exception. Neil MacDougall, managing partner of private equity firm Silverfleet Capital says he’s watching carefully what effect rising unemployment in the US might have on healthcare expenditure. ‘If you get made redundant, after a period you lose your health insurance. You may decide to have surgery quickly before you lose your coverage, but what we’re worried about is what happens several months down the line if people can’t find another job. Healthcare products and devices probably won’t be immune from that drop in spending.’