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10-07-2017 - Modwenna Rees-Mogg - 0 comments
The Secret Investor - life sciences opportunities grow

 The importance of angel investment in the life sciences sector is becoming very apparent.  The opportunity is large which explains why everyone from respected names like Deepbridge Capital to newcomers like Capital Cell are now focussing on bringing life sciences opportunities to the angel market.  We are also seeing interesting companies emerging from other sources such as medical charities like RAFT.

In this month's angel deal of the month, we have profiled Push Doctor which first raised angel finance a couple of years ago and has grown significantly ever since, It stands a s a current case study on why angels should take the wider med tech industry seriously.  So it may be worth looking at both Smart Matrix and Zilico which represent opportunities in the parallel area of medical technology.  

Smart Matrix is commercialising a suite of regenerative medicine products based on a proprietary platform to heal acute wound such as those caused by skin cancer.  This is a $2bn opportunity in the US alone.  Comprising a significant proportion of the acute surgical wound market, 3.3 million patients are diagnosed with non-melanoma skin cancer (NMSC) in the USA annually (source: www.skincancer.org). According to clinical key opinion leaders, 25% of patients undergoing surgery for non-facial NMSC will require a skin graft to heal their surgical wound. It needs the funds to conduct a pivotal clinical trial to secure regulatory approval in Europe in Q1 2018. Regulatory approval is expected in late 2020. Having raised £5.4m to date, the company is now raising a further £6.5m.  We can expect that a significant proportion of this funding will come from expert Venture Capitalists and this is an opportunity for angels to get in early on the act in a company that has been derisked to the extent that it has used its existing £5.4m of funding to get where it is today. 

Zilico is the first of the deals being presented by the Deepbridge Syndicate. It has developed an innovative and patented cancer diagnostic device technology that will improve and extend current cancer screening programmes by providing accurate and objective results real-time. The initial focus of the Company is on cervical cancer and oral cancer, with over 13m colposcopies performed in mature markets, and a further 30m in emerging BRIC markets – equating to a target market size of $700m for Zedscan. The Company’s device, Zedscan, examines the electrical impedance properties of tissues through electrical resistance analysis and measurement. Different organs have characteristic electrical impedances, and research has shown that it is possible to predict the impedance of different tissues once you know enough about their structure, resulting in knowledge of the impedance spectrum characteristic to a particular tissue. The Company’s technology provides an objective method to differentiate between normal, precancerous, and cancerous cells. This provides a real-time diagnosis that removes subjectivity and potentially avoids the need for a biopsy. Zedscan is already routinely in use in Royal Stoke University Hospital, County Hospital Stafford, St Mary’s Manchester and Hallamshire Hospital, Sheffield and has met several key milestones already from EU CE marking in 2013 to being selected by the IFC, a member of the World Bank Group, to be part of the inaugural TechEmerge program, to conduct pilots across India in 2016.  The company is raising £500,000 from angels, alongside VCs as part of a £4m raise to expand sales, launch new products and obtain FCA approvals via various clinical trials.

We can expect to see many more opportunities for angels emerge in this sector as the year progresses and investment platforms such as Capital Cell and Deepbridge Syndicate start to scale up in the number of deals they show the market.  For angels who have traditionally avoided life sciences as too risky, these  new models where you can invest alongside experienced investors who understand the risks and rewards on offer, does mean that it is an area now worth re-considering, especially if the companies seeking investment really do have global potential.  Whilst the soft benefits of angel investment should never influence the price you pay - this is a hardnosed sector where early stage investors have to be very careful - there is a sense of satisfaction to be had from backing medical technologies that could make people's lives significantly better.

 

 

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