Jamie Bell speaks to a range of people from across the UK medtech industry about Innovate UK's Biomedical Catalyst competition, and the funding it provides
While the long-term impacts of the coronavirus pandemic are still proving difficult to predict, it seems inevitable that funding opportunities for smaller medtech companies – like the one provided by the Innovate UK Biomedical Catalyst 2020 competition – will be more important than ever in driving innovation within the industry.
The competition is making a total of £30m ($38.5m) available to SMEs (smaller and medium-sized enterprises) this year, with a view to helping them get their medical devices, technologies and innovations off the ground.
The Biomedical Catalyst 2020 is a two-stage process – meaning firms have to first submit a written application, and have it assessed by monitoring officers, before presenting their ideas in person via Dragon’s Den-style interviews.
Companies hoping to secure non-dilutive funding via this year’s Biomedical Catalyst must apply with their written applications by 7 October.
On the eve of this deadline, Jamie Bell speaks to several figures from across the UK medtech sector – and beyond – to hear their thoughts on the competition.
Medtech industry views on Biomedical Catalyst 2020 funding
Dr Thakur Raghu Raj Singh, Re-Vana Therapeutics
Northern Ireland-based drug delivery firm Re-Vana looks to overcome challenges in treating ocular diseases, and one of its leading products is a small implantable device inserted into the eye, which then slowly releases a drug to treat AMD (age-related macular degeneration) – mainly in elderly patients.
The start-up secured about £193,000 ($250,000) from Innovate UK as part of the 2019 Biomedical Catalyst competition – while the University of Belfast, which the company was spun out of in 2016, also won close to £142,000 ($183,000) to cover its own costs stemming from the project.
Dr Thakur Raghu Raj Singh, co-founder and technical director of Re-Vana, says the funding it was awarded allowed the company to “go to the next stage” in developing its implantable device.
“I think it was a great achievement – and it helped us in two different ways,” he adds.
“One was doing technical assessments to show that the technology actually does work, and the other is that it got our name out there and helped us get more partners to work with. It meant we could accelerate all the things that we wanted to do.”
Off the back of its success in last year’s Biomedical Catalyst competition, Re-Vana also closed a pre-Series A funding round worth £2.5m ($3.25m) in June 2020 – something Singh says would probably have been delayed without the Innovate UK grant.
He adds that – due in no small part to the Biomedical Catalyst accelerating “everything” the company has done over the past year – Re-Vana’s ocular drug delivery device is now between two and three years from clinical trials, and five or six years from reaching the commercial market.
Dr Neville Young, AHSN Network
The AHSN Network brings together 15 major academic health science networks (AHSNs) from across the UK in an effort to “spread innovation at pace and scale”, and ultimately help new technologies reach the NHS so they can benefit patients.
Dr Neville Young, director of enterprise and innovation, Yorkshire and Humber AHSN and commercial director lead for the AHSN Network, says: “The Innovate UK Biomedical Catalyst call is a great opportunity for UK registered SMEs to access funding to support the development of healthtech innovation.
“The AHSN Network recognises and supports the principles of this award and indeed hopes to be working with many of the successful recipients of this award as this funding drives their innovations towards, and into, the market.
“This call focuses on early detection, diagnosis, disease prevention and chronic disease management – all areas of interest to AHSNs and we look forward to working with those bidding now and the successful award winners in due course.”
Nicholas Kelly, Axela Innovations
Axela Innovations is a London-based healthtech company that has developed a mobile phone app to allow healthcare workers to view and manage their patients’ care visits.
Nicholas Kelly – the firm’s chair, CEO and co-founder – says Axela has previous experience of Innovate UK, having applied for investment twice over the past few years.
“Once we wrote the bid ourselves and the second time we paid a tender writer,” Kelly adds. “Unfortunately, the feedback we received both times was that our product was too ambitious and probably not possible.
“This was despite the product already being live and generating revenue. We were applying for funding to build out the neural engine for our app.
“It’s also worth bearing in mind that, depending on your bid, you won’t necessarily receive 100% funding – you might only get 70% funding and that would only be awarded as a reimbursement. Once you’ve met the Innovate UK team member they will sign off on the 70% reimbursement, after you’ve invested yourself.
“For a start-up, investing first and then getting reimbursement can be hard, especially if you are in bootstrapping, or in a seed round. It’s definitely more appropriate for those who have successfully raised funds and want to invest to test your product. I’d advise anyone thinking of applying to assess what stage you’re at in your business before investing.
“It’s a good idea to have experience writing and winning tenders or, even better, hire a professional tender writer. Unfortunately, this will exclude some SMEs as good bid writers can cost anything upwards of £3,000, and some even take a percentage of the overall win as a fee.
“The time and energy required to win and get funding without using a professional bid writer could be better focused on other ways to raise funding such as putting the money into PR activity to raise awareness to get in front of possible investors.”
Christoph Ruedig, AlbionVC
Christoph Ruedig is a partner at AlbionVC – the technology investment arm of UK investment manager Albion Capital Group.
He practiced radiology and strategy consulting before switching to become a healthcare investor in 2006, and has since backed early-stage gene therapy research, clinical trials and digital health software solutions.
Through his role at Albion VC, Ruedig also co-manages the UCL (University College London) Technology Fund – which launched for the first time in 2016 and has provided financial support to biotech firms Orchard Therapeutics, MeiraGTx and Freeline Therapeutics.
On the Biomedical Catalyst competition, Ruedig says: “One of the many lessons the Covid-19 pandemic has taught the world is that the development of innovative healthcare products, technologies and processes is crucial. We have been investing in digital health for the best part of a decade and never has the pace of change been more rapid.
“We are seeing a dramatic acceleration of the digitisation of the healthcare industry – but to keep up with this pace we need to ensure innovators have access to sufficient funding, including government funds. Grants – and, in particular, the Biomedical Catalyst grant – are crucial, as they support the development of early-stage projects that may otherwise struggle to find the necessary and vital backing.
“However, while grants are much needed, they can be difficult for SMEs to navigate and there are questions over whether the funds always go to the most deserving recipients. Inclusion and exclusion criteria can seem arbitrary, making them less accessible. Finally, managing these grants is onerous for SMEs who may not have the resources to keep up with all the associated reporting. The burden may put some businesses off applying for them entirely.”
Julia Hawkins, LocalGlobe
London-based venture capital firm LocalGlobe has invested in hundreds of growing firms over the past 20 years – including transport app Citymapper, online money transfer service TransferWise and, most recently, healthtech start-up Awell Health.
Julia Hawkins, who is a partner at LocalGlobe, says: “The Innovate UK competition for SMEs shows the support that companies are receiving to encourage health and medtech innovation, which is enhancing their ability to move quicker than academic counterparts. It’s an excellent vehicle to foster innovation and I am fully supportive.
“However, it can be a concern that so many grants are awarded through a competitive process. Some of the most skilled researchers and scientists will inevitably stumble at this hurdle, while others will not have the resources to make it through bureaucratic rounds.
“In contrast to traditional technology companies, the cost of developing and producing a medtech product at every stage in the pipeline is extremely high, even for companies that are well supported and financed. For that reason, we need to have grants and support in place, but we must make sure that they are not preventing the creativity of thought and patient investment that healthcare innovation requires.”
Tommy Jamet, Blockchain Reply
During the coronavirus pandemic, UK tech firm Blockchain Reply has garnered attention for its HEALTHCRED smartphone app – which is designed to allow businesses and sporting organisations to verify the health status of people attending events while safeguarding their personal information.
Reply also received funding from Innovate UK earlier this year to aid in developing this proprietary app further.
Tommy Jamet, UK blockchain lead at Reply, says: “Out of more than 8,000 applications, Blockchain Reply was selected as one of 800 companies to develop new projects and services designed to boost economic recovery in the wake of Covid-19.
“The overall competition experience has been smooth and well-implemented, with helpful guidance and timely access to funding. The initial application process was far lighter than expected and allowed for very quick progression. Although great for smaller companies who need prompt access to funding to quickly deliver their ideas, this may lead to a lack of scrutiny over the legitimacy of certain project proposals – maybe a necessary and measured trade off that Innovate UK anticipated.
“The assistance offered by the monitoring officers assigned to each company has been vital in ensuring all regulations and stipulations to access the funds were met successfully. Interaction between companies within cohorts has, however, been limited.
“Blockchain Reply sits within the 19 project-strong ‘digital health’ cohort, and believes greater collaboration within cohorts of similarly grouped products could lead to increased innovation and synergy.”
Dr Pahini Pandya, Panakeia Technologies
UK-based diagnostics company Panakeia Technologies is among the SMEs applying for funding via the Biomedical Catalyst 2020 competition.
The firm, which was founded in 2018, is working on a platform that uses AI to make cancer diagnosis simpler, faster and cheaper – and will look to secure an Innovate UK grant to further a project in this area.
Pahini Pandya, who co-founded Panakeia and is also the current CEO, says the company is “likely” to apply for £500,000 ($650,000) in funding independently – but may be able to secure closer to £2m ($2.6m) through collaboration with one or two consortia partners.
“Grants like the Biomedical Catalyst provide the much needed financial support for the development of biomedical innovation all the way from prototyping to demonstrating clinical utility and effectiveness,” Pandya adds.
“Opportunities like these, which provide end-to-end support, are crucial for ensuring the translation and commercialisation of diagnostic or therapeutic interventions developed by small companies. However, the big challenge with these grants is that the demand often outstrips the amount of funding available, resulting in several important innovations going unfunded.
“Furthermore, the competitive structure of these grants has led to the boom of a grant writing industry that often tends to favour SMEs that have some funding to start with.
“Nonetheless, the collaborative nature of these grants encourages several academic, healthcare organisations and industrial organisations to partner with SMEs – oftentimes speeding up development, stakeholder adoption and routes to market.”
Piotr Sokolowski, S3 Connected Health
Dublin-based digital health solutions provider S3 Connected Health works directly with medtech and pharma companies alike to develop healthcare technologies and medical devices, and ultimately improve the lives of patients with acute and chronic conditions.
In the past it has worked with numerous medtech companies, including Dutch industry giant Philips, Australian implantable hearing device manufacturer Cochlear and fellow Irish firm FIRE1 – which specialises in novel remote monitoring technologies.
On the Biomedical Catalyst competition, Piotr Sokolowski – head of services strategy at S3 Connected Health – says: “The need for continued innovation across the global healthcare sector is well known.
“The UK in particular is facing a scalability problem, where demand for health services is rapidly outstripping capacity, and resolving it requires more than just additional resources or staff. Most of all, it requires innovative solutions that optimise the distribution and provision of primary care, and that better use the resources we have. The broader deployment of technology is certainly a crucial part of this.
“This kind of innovation is going to come from smaller, more nimble players – those outside of the system – as opposed to larger, established players who are too focused on providing traditional care. The competition is encouraging those smaller players to come forward and will naturally select the best of them, which is a huge positive.
“However, the process of innovation must be carefully managed in terms of patient safety through ensuring compliance with medical device regulations, scope – by selecting truly unmet needs – and economic outcomes, via health technology assessment. The Biomedical Catalyst has a vital role to play by specifying guidelines that shape the focus of innovative projects.
“The concern is that encouraging innovation for the sake of innovation, especially in technology terms, could actually contribute to the very problems we as an industry are trying to solve; inadvertently increasing the costs of healthcare by creating a wider range of costly options and services to be provided.
“Consideration should also be given to improving existing therapies and technologies, and making sure people use them before investing in creating anew. That said, it’s great to see this continuous innovation cycle being encouraged in a way that’s clearly targeted at achieving better, cheaper, and more proactive ways of resolving current healthcare problems.”
Dag Larsson, Doccla
Swedish medtech start-up Doccla provides virtual wards – which involve monitoring patients remotely to free up hospital capacity – for the NHS.
Its CEO Dag Larsson, who has also worked for several tech firms in the past, says: “This type of ‘competition’ opens up the NHS to small businesses and start-ups with groundbreaking ideas that challenge the norm.
“It fast tracks technology adoption into the NHS. In times like these, this activity is imperative for delivering fast change that improves patient care and creates greater efficiency and cost savings.
“However, while positive, we hope this type of grant will focus more on business potential and less on the fluffy term innovation – not everything is, or should be, AI.”
Dr Rehman Rafiq, Myriad Associates
Myriad Associates – a Leicestershire-based consultancy firm – writes grant bids for medtech companies, and claims to have secured more than £40m ($52m) for its clients in the past year.
Dr Rehman Rafiq, a senior consultant at Myriad who specialises in Innovate UK grant bid writing and has won multiple Biomedical Catalyst funding awards for SMEs in the past, believes the money available in this year’s competition is “extremely important” in helping smaller companies grow.
“Start-ups and early stage SMEs require initial capital and good cash flow to get off the ground without losing significant control of the company – as is the case with equity investments,” says Rafiq.
“Grant funding ensures that the SMEs are able to develop their technology to a stage where they conduct pre-clinical and first-in-human clinical trials to validate the efficacy, safety and viability of the proposed technology. Successful technology demonstration in a relevant clinical environment will enhance the company valuation, de-risk the technology and open doors for future private investment required for pivotal trials, accreditations, scale-up and internationalisation.
“Venture capital investment in medtech has generally declined over the past several years, placing future innovation in medtech at risk in the UK. Key reasons behind this trend include; healthcare reforms, shift to value-based care and stringent regulatory requirements. Provision of targeted medtech funding opportunities, such as the Biomedical Catalyst, will help in reversing this trend.
“If a company is successful in proving the techno-economical feasibility through grant funding, investors may be more willing to invest in technologies that can demonstrate differentiated value, quickly gain coverage, be commercially successful, and generate a sufficient return. I think the competition will benefit SMEs even more if there was an advanced payment, which can be taken off the subsequent claims, to help their cash flow.”
Rafiq also states that having the applying SMEs compete against one another is “a good idea”, as it means only the best concepts will make it through Innovate UK’s strict evaluation process.