West Midlands NHS Innovations Conference 2006 ‘sharing innovation for healthcare’

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


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


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


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


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


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


New NHS

New Business Opportunities

Dr Mark Goldman

Chief Executive


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



The changing face of healthcare

– Diversity of provision

– Care in the community

– Self help

– Choice


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




How can you help?

Understand us and our problems

Bring us solutions but respect our culture

Recognise our achievements


What’s in it for YOU?

• Growing market

• Recession proof

• Global marketing opportunity

• Under developed product ranges

• Wide product requirements

• New approaches to healthcare


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%


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


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


Complex products

• Communication

• Instrumentation

• Software solutions

• Implantable devices

• Drug delivery systems

• Lab equipment


Medipark


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


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


Research

– Hygieia – SkinSure barrier cream

– Bioquell

– 2 hour MRSA rapid test

– Surface coatings


Practical application

– Hand gel dispensers

– Coated bags and aprons

– Disposable bags

– Cleaning systems

– Voice activated alerts

– Patient tagging

– Telemetry


Learning together – the Initial experience

Initial – a cleaning company

Initial – hygiene solutions

Initial – public health education

Initial – a partner in healthcare


Centre of excellence

National and international

interest


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


Ingredients for a successful Innovations Hub

• Accessible to regional NHS

• Capability & Capacity

• Networked


MidTECH Plan

2004-5: Establish baseline capability & client base

2005-6: Demonstrate capability; grow client base & networks

2006-7+: Enhanced capability & delivery


2005-6 Client Base

• Client base of 33 NHS bodies– Increase of 100% on 2004-5– 66% of total


Coverage – Birmingham & the Black Country

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Coverage – Shropshire & Staffordshire


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Coverage – West Midlands South


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


2005-6 Networks

• Working relationships:• Medilink West Midlands• HealthTech (WMG)• CHID• Regional design & prototype community

• Stakeholder relationships:• DH, DTI, AWM, regional University sector


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


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


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


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


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.


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.


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.


HITF actions - Crucial and timely

Medical device evaluation serviceNHS Innovation Centre and hubNHS regional procurementBuilding R&D capacity – UK Clinical

Research CollaborationTraining &Education


“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


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.


EXCITING BLUEPRINT

☺a dream come true for NHS researchers

Or

☻just wishful thinking!


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?


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).


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.


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.


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’.


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)


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.


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.


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.


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.


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


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?


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


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


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!


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.


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?


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


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


Content

• Early stage investments

• Risk / investment profiles

Tackle obliquely – experience with PSREs – Rainbow Seed Fund

- what it looks for

- some examples


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


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


•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


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


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


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)


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


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


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?


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


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


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


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


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


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


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.


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


Further Information / Discussion

• www.rainbowseedfund.com

• www.midven.com

• Terry Swainbank 07710 491589

http://www.rainbowseedfund.com/

http://www.midven.com/

West Midlands NHS Innovations Conference 2006

‘sharing innovation for healthcare’

Documents

West Midlands NHS Innovations Conference 2006 ‘sharing innovation for healthcare’