By Julie Nixon
In February Epidarex Capital announced a £4 million investment in Edinburgh Molecular Imaging, an Edinburgh BioQuarter spin-out developing pioneering Optical Molecular Imaging (OMI) technology with the potential to address unmet needs in the diagnosis and monitoring of disease. At last night’s BioQuarter event we were given insight into the deal, hearing from Edinburgh Molecular Imaging founder Dr Kev Dhaliwal and Dr Liz Roper, one of the partners at Epidarex.
Kev described to us how the company’s innovative OMI technology has allowed the development of fluorescent imaging reagents that detect harmful processes inside the human body in real time. The technology could transform the diagnosis and management of a number of serious respiratory conditions, but could also be applied to the diagnosis of many other diseases. This has the potential to meet the need for an accurate in vivo diagnostic tool for clinicians that could improve patient outcomes and reduce health care costs.
Steep Learning Curve
As a former academic I believe there is a need for academics to be better educated in the potential pitfalls (and rewards!) the commercialization process can bring, a belief I share with the Edinburgh Molecular Imaging founders Kev, Professor Mark Bradley and Professor Chris Haslett. Last night Kev was very eloquent describing the company’s journey from 2010 until the recent investment, emphasizing the need to be “pragmatic”. Chris added that “belief, perseverance and patience” is necessary. Finding the right investor is vital, and the “marriage” with Epidarex sounds a happy one from both the company and investor’s perspectives. Kev described the “completion” meeting in amusing detail, the amount of paperwork (and negotiation) required to close a deal can be daunting for the uninitiated. However Edinburgh Molecular Imaging has now hatched and hopefully great things are ahead.
The Investor’s Perspective
Liz gave us a great overview on Epidarex, the aim of the fund and the Edinburgh Molecular Imaging deal from the investor’s point of view. Epidarex is focused on Scotland as an under ventured market. Partnerships with Universities are critical, Epidarex works closely with Edinburgh, Glasgow, and Aberdeen Universities, and Kings College London. Investment is aimed to fill the equity gap after early stage seed investment with Epidarex providing series A funding of £2-10 million. Epidarex also has corporate partners such as Eli Lily who are keen to get access to the UK science base through the fund. Eli Lily may be a possible acquirer of investee companies in the future.
Liz described how Edinburgh Molecular Imaging was a suitable company for investment, having innovative technology that could meet an unmet need, a management team comprising of world class scientists with proven track records, and the ability to provide a real venture return on investment. Epidarex has received over 400 business plans to filter, and the developmental stage, capital needs and exit opportunity these business plans describe is critical for a company to become a potential investee. Candidate companies have to be transparent on the potential risks in their business model, and provide clarity on the uniqueness of their technology and other competitors.
Liz informed us that venture capital investing is recovering, and with Epidarex now up and running building a portfolio of companies, I can only think this innovative new fund will indeed be a “local champion”.