£1.75 MILLION INVESTMENT IN THE WORLD’S SMALLEST ‘SURGEONS’
03/06/2005
ZooBiotic Ltd, a unique new enterprise designed to exploit the clinical benefits of maggot therapy has been established as a result of “spinning out” from Bro Morgannwg NHS Trust. They will be the first clinical company to be spun out of a Health Trust in the UK, although the Trust will continue to retain a major shareholding.
ZooBiotic has been launched with a total cash injection of £1.75m, including equity and loan funding from Finance Wales in conjunction with Partnerships UK, an equity investor created by HM Treasury to back spin-outs from the public sector; equity funding from Lansdales Limited, the investment vehicle of a new management team; banking facilities from HSBC, and a Regional Selective Assistance Grant from the Welsh Assembly Government.
The funding package was coordinated by Grant Thornton Corporate Finance in Cardiff, led by Paul Oldham, corporate finance partner; Morgan Cole Solicitors Corporate team were legal advisors to Bro Morgannwg NHS Trust
Additions to the management team include Finance Director Annis Paul, Technical Director Dr Steve Thomas and Commercial Director Scott Forde.
ZooBiotic incorporates the Bio Surgical Research Unit which reintroduced sterile maggots into European clinical practice in 1996. The company will initially continue to be based in the Surgical Materials Testing Laboratory in the Princess of Wales Hospital, Bridgend, until a new facility incorporating state-of-the art pharmaceutical clean rooms is completed in the Bridgend area.
Sir Roger Jones, the Executive Chairman of ZooBiotic, said that ground breaking Welsh research had resulted in a wound treatment that could benefit patients in every country in the world.
Bro Morgannwg NHS Trust Chief Executive Paul Williams said: “There is tremendous potential for both the NHS and patients from the development of this therapy which has been led by this Trust. Our partners joined with us to develop this business to share both the risks and the rewards of expanding this operation. ”
Dr Stephen Thomas, who established the Biosurgical Research Unit in 1995, enthused; “This new initiative will provide the financial support that is required to enable us to take maggot therapy forward and establish it as a recognised pharmaceutical product for the treatment of all types of infected or necrotic wounds.”
Finance Wales’ Director of Investments, Peter Wright, added “The Surgical Materials Testing Laboratory has already demonstrated how Welsh research can compete on the world stage. It has established widespread recognition as the market leader in its field and has a strong and proven management team which will now take ZooBiotic forward.
Finance Wales is delighted to be part of an investment which will create a valuable new Welsh business.”
James Stewart, Chief Executive of Partnerships UK added: “We are delighted to be associated with the spin-out of ZooBiotic and the development of a maggot therapy business. We are confident that it will bring strong clinical benefits to patients and it has the potential to create significant savings for the NHS. Our support to Bro Morgannwg NHS Trust in promoting the spin-out as well as financial support to the venture in loan stock and equity has been pivotal to creating greater commercial potential within the private sector for the business to flourish.”
Paul Oldham, Corporate Finance partner for Grant Thornton Corporate Finance, who were advisors to ZooBiotic, said “This is a ground-breaking project, a first for Wales and the UK and we are delighted to have helped the Trust and the management team to overcome all hurdles. ZooBiotic is a business with real potential to increase healthcare sector output and employment in South Wales.”
Anne Gilroy, an associate in Morgan Cole Solicitors’ Corporate team who advised the Bro Morgannwg NHS Trust added: “This has been the first ever spin-out deal from a Health Trust. It demonstrates not only the technical advancements being made in healthcare in Wales, but the level of professional support that exists to make a deal of this kind possible.”
Maggots were used by physicians for centuries for treating wounds but they fell into disuse when antibiotics were first introduced in the 1940s. Now healthcare professionals have come to recognize that that these creatures offer considerable advantages over conventional forms of treatment, promoting healing by removing dead tissue and killing micro-organisms that cause wound infection
Numerous articles in medical and nursing journals have described how maggot therapy has been successfully used in the treatment of leg ulcers, wounds associated with diabetes, pressure ulcers, and many other types of infected wounds. Conventional treatments for these wounds can take months to achieve a successful outcome, but maggot therapy usually involves no more than one or two treatments, each lasting 2-3 days.
Maggot therapy will reduce pain in some types of wounds and in some cases it has even been claimed to prevent surgery and amputation. There is also evidence that maggots can be used to combat wound infections caused by the so-called “super bug” MRSA.
Because maggot therapy acts far more quickly than conventional treatments, it also reduces treatment times and the associated costs – great news for the hard pressed resources of the NHS.
ENDS
Note to Editors.
Finance Wales was created to provide commercial funding for Welsh small and medium size enterprises.
It utilises funds from the European Union and private funding partners, including Barclays Bank plc and European Structural Funds (ERDF) Objective 1, Objective 2 and Transitional areas. Funds are provided through the Welsh Assembly Government and managed by the Welsh European Funding Office (WEFO).
Advisors to the Trust
Lead advisory
Grant Thornton Corporate Finance, Cardiff - Paul Oldham, Alasdair Francis
Tax advisory
Grant Thornton, Cardiff - Louise Evans, Claire Dyer
Legal advisor
Morgan Cole, Cardiff - Anne Gilroy
Advice relating to the spinout process
Partnerships UK, London - Owain Ellis
Advisors to the VC's
Legal
Eversheds, Cardiff - Paul Pugh
Financial due diligence
Haines Watts, Cardiff - Chris Burgess, Terry Kiely
Advisors to the Management Team
Legal
MLM, Cardiff - John Fernandez-Lewis
VC's
Finance Wales, Cardiff - Amy-Preece Jones, Jonathon Fogg, Peter Smaille
Partnerships UK, London - David Hunter, James Stewart, Punit Bhatia,
Management Team
Sir Roger Jones, Annis Paul, Scott Forde, Dr Steve Thomas
Bank - HSBC, Cardiff - Simon George, Andy Button
Advice in connection with the Grant application - EDS, David Rees
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