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Enviromed goes public
Biosensors & Bioelectronics Vol. 8 No. 9/10 (1993)
Enviromed Goes Public Phil Yates Earlier in 1993 a new company, Enviromed, was floated on the UK stock exchange. It is made up of four separate companies: Cranfield Biotechnology, Euro Laboratories, Permatemp, and EMP. It is interesting that the group’s combined turnover in 1992 was only around &2M - a level that is normally thought to be far too low to justify the costly process of going public. I spoke to Professor John Higgins, the company’s Biotechnology Director, to find out more.
Cmanufactures ranfield
Biotechnology develops and sensors for medical and environmental applications. It began in 1989 as an offshoot of the Cranfield Institute of Technology and quickly built up a reputation for developing new techniques for biological and chemical sensors, both for in-house projects, and as consultants to other companies.
can be chelated from the blood stream. It is in the testing that Enviromed sees an opportunity. It produces a disposable plastic printed sensor that rapidly produces results and is suitable for large scale testing. Similar techniques will also be used to provide chemical sensors to measure heavy metals and other pollutants in waste water. There is considerable interest from water companies in portable testing equipment.
Heavy metal pollution Some of the techniques it developed for biosensor processes - particularly controlled deposition of thin layers of material, opened up possibilities for new chemical sensors and it is these that form the majority of the company’s products for the short term future. The most promising is a sensor that detects heavy metal pollutants, in particular lead and copper. The sensor consists of a metal film on a substrate and the composition and quantities of heavy metals are detected by anodic stripping. A major market is seen in the USA, where many houses still have extensive lead-based paint work. The result is lead-laden dust which can contaminate food. In some states it is becoming compulsory to test all children for lead poisoning so that the lead
X
Medical sensors A medical sensor, soon to be released into the market, will be used to test vaginosis. It is a chemical test that can distinguish between bacteriological and fungal causes so that the treatment is appropriate. (The normal method is to prescribe fungicidal cream and only investigate further if the treatment fails - which it does half the time). Cranfield’s new products will make two types of test commercially available. The first will be a “do it yourself’ kit similar to a pregnancy test; the other will be for use by clinicians.
Glucose monitor However,
0956-5663/93/$6.00
not all Cranfield’s
new products
are
0 1993 Elsevier Science Publishers
Ltd.
Biosensors & Bioelectronics
Vol. 8 No. 917 0 (1993)
chemically based. Biological tests are developed where the technology is the most appropriate. The company’s glucose sensor, which is due to be released early next year, introduces a blood sugar test for diabetics which is easier to use. The biological sensors used in current sensors are susceptible to contaminants in the air, especially water vapour, and have to be individually sealed. This makes them expensive and inconvenient. Enviromed will introduce a cassette of fifty blood sugar sensors (approximately one month’s supply) that can be easily dispensed. To improve the stability of the biosensor a new chemical carrier was developed. This, coupled with a well-sealed cassette mechanism has led to a viable product.
DNA biosensor A longer term project that is currently in development is a DNA Biosensor that will recognise base sequences. It works by measuring the electrochemical properties of changes of bases. It will have applications in research into recombinant DNA and in detecting pathogenic micro-organisms.
substances will require testing, so the company has a promising future.
Permatemp & EMP For over fifteen years, Permatemp’s main business has been the design, manufacture, and installation of hospital operating theatre units and equipment. The units are based on a modular design and are assembled as a free-standing structure. The company’s operating theatre components, which are marketed for the company by Vickers Medical, are instrument pendants that reduce clutter in operating theatres and intensive care units. Business levels have been variable, but recent changes in the organisation and working methods of the UK’s National Health Service (NHS) have opened up an opportunity for the company. This is being exploited by EMP. In the UK there is very little special provision for routine surgery. Nearly all is carried out in theatres that are over-equipped and inappropriately organised for the process. The result is long (and politically contentious) waiting lists, and an unnecessarily high cost for routine operations.
Eurolabs Eurolabs started as part of Cranfield Biotechnology but became a separate company in 1991. It offers a service to assess the effect of microbiological and chemical substances on the environment. It also assesses the changes to the substances that exposure to the environment can make and so guards against harmful by-products. Most of Eurolab’s customers are large chemical companies. The company is in a good position to benefit from the European Community’s increasing involvement with environmental issues. Any company, world-wide, that wishes to continue selling chemicals into an EEC country will have to carry out testing of the sort Eurolabs offers. It is estimated that at least one hundred thousand different microbiological and chemical
Day surgery units By contrast, in the USA and Canada, around a third of all operations are carried out in “Day Surgery Units” (DSUs). Britain’s Royal College of Surgeons believes that the optimum level could be as high as a half. Enviromed says that by moving routine operations to DSUs, savings could be as high as 70%. Also favourable is a combination of Government curbs on public spending - meaning that capital investment is difficult - and the formation of NHS trusts and fund holding General Practitioners who are now free to choose where to buy their health care. EMP believes itself to be the only turnkey supplier of DSUs to the NHS. It handles all aspects from financing, design and building, to non-medical staffing: the NHS is still responsible
xi
Biosensors & Bioelectronics Vol. 8 No. 9AO (1993)
for medical staffing and for supplying consumable items, but is not responsible for the capital investment. The facility itself is, of course, made by Permatemp and the result is a suite of fully equipped rooms including reception, pre-clinical areas, anaesthesia rooms, the operating theatre, and recovery rooms. EMP runs the facility and charges for each patient. At the moment the NHS contract for a minimum number of operations per year so Enviromed cannot lose. However, with such favourable business conditions they cannot expect to remain the only turnkey supplier for long.
Group synergy There seems to be little doubt that the companies that make up Enviromed each have excellent prospects for future business, but I feel that the advantages to the companies of forming a group remain to be proved. There is a clear synergy between the two companies. For example, CBL is currently beginning a venture to develop a novel haematology/blood chemistry instrument for incorporation into operating theatres. Maybe Cranfield Biotechnology’s undoubted technical strength will help the other three to gain business. Maybe there is the prospect of companies providing complementary marketing. Certainly
xii
the directors expect the company to grow both organically and through further acquisition so the company’s current makeup is unlikely to be final.
Future positioning The need to become a public limited company (plc), is driven by a combination of the demands of customers and positioning the company for future opportunities. In Enviromed’s case being a plc will help. Health Authorities, when placing major contracts for facilities, apparently wish to deal with plc’s. In the meantime the company will have to pay the extra costs and bear the extra management responsibilities associated with being a public company. Phil Yates was formerly an independent technical writer and marketing consultant who left industry to form his own company Insight in Teddington, Bedfordshire, UK. He specialises in the commercial aspects of high technology and electronics in particular. He has since returned to industry and is presently involved in a project assessing the viability of value-added services for cable TV. Contact: Prof. John Higgins, Cranfield Biotechnology Ltd., 20 Howard Way, Newport Pagnell, Bucks MK16 9QS, UK. TeNfax: [44] (0)908 2173OOl217400.
Enviromed Goes Public Phil Yates Earlier in 1993 a new company, Enviromed, was floated on the UK stock exchange. It is made up of four separate companies: Cranfield Biotechnology, Euro Laboratories, Permatemp, and EMP. It is interesting that the group’s combined turnover in 1992 was only around &2M - a level that is normally thought to be far too low to justify the costly process of going public. I spoke to Professor John Higgins, the company’s Biotechnology Director, to find out more.
Cmanufactures ranfield
Biotechnology develops and sensors for medical and environmental applications. It began in 1989 as an offshoot of the Cranfield Institute of Technology and quickly built up a reputation for developing new techniques for biological and chemical sensors, both for in-house projects, and as consultants to other companies.
can be chelated from the blood stream. It is in the testing that Enviromed sees an opportunity. It produces a disposable plastic printed sensor that rapidly produces results and is suitable for large scale testing. Similar techniques will also be used to provide chemical sensors to measure heavy metals and other pollutants in waste water. There is considerable interest from water companies in portable testing equipment.
Heavy metal pollution Some of the techniques it developed for biosensor processes - particularly controlled deposition of thin layers of material, opened up possibilities for new chemical sensors and it is these that form the majority of the company’s products for the short term future. The most promising is a sensor that detects heavy metal pollutants, in particular lead and copper. The sensor consists of a metal film on a substrate and the composition and quantities of heavy metals are detected by anodic stripping. A major market is seen in the USA, where many houses still have extensive lead-based paint work. The result is lead-laden dust which can contaminate food. In some states it is becoming compulsory to test all children for lead poisoning so that the lead
X
Medical sensors A medical sensor, soon to be released into the market, will be used to test vaginosis. It is a chemical test that can distinguish between bacteriological and fungal causes so that the treatment is appropriate. (The normal method is to prescribe fungicidal cream and only investigate further if the treatment fails - which it does half the time). Cranfield’s new products will make two types of test commercially available. The first will be a “do it yourself’ kit similar to a pregnancy test; the other will be for use by clinicians.
Glucose monitor However,
0956-5663/93/$6.00
not all Cranfield’s
new products
are
0 1993 Elsevier Science Publishers
Ltd.
Biosensors & Bioelectronics
Vol. 8 No. 917 0 (1993)
chemically based. Biological tests are developed where the technology is the most appropriate. The company’s glucose sensor, which is due to be released early next year, introduces a blood sugar test for diabetics which is easier to use. The biological sensors used in current sensors are susceptible to contaminants in the air, especially water vapour, and have to be individually sealed. This makes them expensive and inconvenient. Enviromed will introduce a cassette of fifty blood sugar sensors (approximately one month’s supply) that can be easily dispensed. To improve the stability of the biosensor a new chemical carrier was developed. This, coupled with a well-sealed cassette mechanism has led to a viable product.
DNA biosensor A longer term project that is currently in development is a DNA Biosensor that will recognise base sequences. It works by measuring the electrochemical properties of changes of bases. It will have applications in research into recombinant DNA and in detecting pathogenic micro-organisms.
substances will require testing, so the company has a promising future.
Permatemp & EMP For over fifteen years, Permatemp’s main business has been the design, manufacture, and installation of hospital operating theatre units and equipment. The units are based on a modular design and are assembled as a free-standing structure. The company’s operating theatre components, which are marketed for the company by Vickers Medical, are instrument pendants that reduce clutter in operating theatres and intensive care units. Business levels have been variable, but recent changes in the organisation and working methods of the UK’s National Health Service (NHS) have opened up an opportunity for the company. This is being exploited by EMP. In the UK there is very little special provision for routine surgery. Nearly all is carried out in theatres that are over-equipped and inappropriately organised for the process. The result is long (and politically contentious) waiting lists, and an unnecessarily high cost for routine operations.
Eurolabs Eurolabs started as part of Cranfield Biotechnology but became a separate company in 1991. It offers a service to assess the effect of microbiological and chemical substances on the environment. It also assesses the changes to the substances that exposure to the environment can make and so guards against harmful by-products. Most of Eurolab’s customers are large chemical companies. The company is in a good position to benefit from the European Community’s increasing involvement with environmental issues. Any company, world-wide, that wishes to continue selling chemicals into an EEC country will have to carry out testing of the sort Eurolabs offers. It is estimated that at least one hundred thousand different microbiological and chemical
Day surgery units By contrast, in the USA and Canada, around a third of all operations are carried out in “Day Surgery Units” (DSUs). Britain’s Royal College of Surgeons believes that the optimum level could be as high as a half. Enviromed says that by moving routine operations to DSUs, savings could be as high as 70%. Also favourable is a combination of Government curbs on public spending - meaning that capital investment is difficult - and the formation of NHS trusts and fund holding General Practitioners who are now free to choose where to buy their health care. EMP believes itself to be the only turnkey supplier of DSUs to the NHS. It handles all aspects from financing, design and building, to non-medical staffing: the NHS is still responsible
xi
Biosensors & Bioelectronics Vol. 8 No. 9AO (1993)
for medical staffing and for supplying consumable items, but is not responsible for the capital investment. The facility itself is, of course, made by Permatemp and the result is a suite of fully equipped rooms including reception, pre-clinical areas, anaesthesia rooms, the operating theatre, and recovery rooms. EMP runs the facility and charges for each patient. At the moment the NHS contract for a minimum number of operations per year so Enviromed cannot lose. However, with such favourable business conditions they cannot expect to remain the only turnkey supplier for long.
Group synergy There seems to be little doubt that the companies that make up Enviromed each have excellent prospects for future business, but I feel that the advantages to the companies of forming a group remain to be proved. There is a clear synergy between the two companies. For example, CBL is currently beginning a venture to develop a novel haematology/blood chemistry instrument for incorporation into operating theatres. Maybe Cranfield Biotechnology’s undoubted technical strength will help the other three to gain business. Maybe there is the prospect of companies providing complementary marketing. Certainly
xii
the directors expect the company to grow both organically and through further acquisition so the company’s current makeup is unlikely to be final.
Future positioning The need to become a public limited company (plc), is driven by a combination of the demands of customers and positioning the company for future opportunities. In Enviromed’s case being a plc will help. Health Authorities, when placing major contracts for facilities, apparently wish to deal with plc’s. In the meantime the company will have to pay the extra costs and bear the extra management responsibilities associated with being a public company. Phil Yates was formerly an independent technical writer and marketing consultant who left industry to form his own company Insight in Teddington, Bedfordshire, UK. He specialises in the commercial aspects of high technology and electronics in particular. He has since returned to industry and is presently involved in a project assessing the viability of value-added services for cable TV. Contact: Prof. John Higgins, Cranfield Biotechnology Ltd., 20 Howard Way, Newport Pagnell, Bucks MK16 9QS, UK. TeNfax: [44] (0)908 2173OOl217400.