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

Kevin D’Silva points out another example of how much more seriously medical technology is taken in the US. He points out one of Prosurgics’ competitors known as Intuitive Surgical. Intuitive is listed on Nasdaq and sells a robot called a da Vinci for $1.3 million that helps surgeons remove cancerous prostates. According to seniorjournal.com, one new case of prostate cancer occurs every 2.5 minutes and a man dies from prostate cancer every 17 minutes in the US. The da Vinci offers better patient outcomes with faster recovery times than surgery without a robot. This has led some US hospitals with a da Vinci to promote themselves to prospective patients by exhibiting banners outside their hospitals. There are over 700 da Vinci robots in the US, but fewer than ten in the UK.

All this is not to say that there isn’t a successful medtech environment in the UK. It’s a smaller market, so companies need to think global from the start. But there are hotbeds of research activity in the UK where doctors and university professors are developing ideas which lead to start-up companies and prototypes. The challenges these entrepreneurs face are perhaps best illustrated by two stories – Gyrus, a recent success, and Medikidz, a start-up still looking for funding.

Gyrus was started by two brothers in 1989 – it created surgical instruments used in keyhole surgery, with initial financing from a development fund at US healthcare giant Johnson & Johnson. It was successful for three reasons. First, it set up a licensing deal with Johnson & Johnson to produce a range of arthroscopic products used in keyhole surgery. This was critical because it validated the technology through endorsement by a big player in the sector. Second, it focussed on building a position in the US, the world’s most important market for medical devices. Third, after an IPO in 1997 and subsequent public capital raisings, it was able to multiply in size between 2000 and 2005 through the acquisition of US companies – which made Gyrus so successful it attracted the eye of Olympus of Japan, which bought Gyrus in February 2008 for $2 billion.