by Real Business - Thursday, 30th August 2007

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There’s low-tech. And there’s high-tech. And then there’s real-tech - businesses that earn a crust by taking ideas from labs and turning them into incredible, world-beating products and services.
These companies got a bit overlooked in 1999. But now that the world has realised that calling a dot-com a “technology” company is a bit like describing your local Chinese takeaway as a telecoms business, real-tech is back in vogue. Investors who would once have fallen over themselves to breakfast with a dot-com are now hurtling off to universities to peer down microscopes.
We have spent the past three months researching the state of science-based business in Britain. And we’ve been gobsmacked. Not only are there plenty of great ideas, but we have detected a growing commercialism within our labs and universities. There’s no shortage of Don Spalingers (this month’s cover portrait) determined to use brainpower to get rich. “People want to have the enjoyment of creating something new,” says Anne Glover, MD of venture capitalists Amadeus.
Our “Twenty-one companies for the 21st century” are just the tip of the real-tech iceberg. Not all of these companies will become the next ARM, Autonomy or Bookham Technologies. But they have the team, the science, the ambition and the size of market to give it a go.

We have divided our snapshot into five sections:

• Optical communications, the much-vaunted conversion of the world’s telecoms networks to all-optical systems.
  
• Broadband, which means (roughly) squirting messages through a powerhose rather than the watering can of today’s phone lines and mobiles.
  
• Materials technology, the most futuristic of our sections.
  
• Healthcare.
  
• And, very briefly, the internet.
  

The internet is the driving force of our 21. But our companies don’t sell stuff on it. Well, not as their main business. Instead, they build its infrastructure, increase its capacity, use its tentacles to change the way they work. If the net revolution means an information-explosion, then someone must help us whizz that information - whether it’s high-definition video, multimedia etc - down our phone lines. It’s no surprise that so many of our 21 are in “broadband” and “optical communications”. “Anything to do with bandwidth appeals,” says Dave Cheesman of Advent Venture Capital Trust. Well, “anything sensible.”
It takes some fancy technology to deliver broadband. Enter the chip-makers. Element 14, for example, creates sophisticated chips that sit in telephone exchanges. These chips allow the plain old telephone system to deliver bandwidth-hungry traffic. This market for ADSL (don’t worry, we’ll explain it later) could be worth $2bn-plus a year in Europe alone by 2006 (last year the figure was $60m).
Information doesn’t just flow to fixed points. Wireless broadband is another big science of the moment. So, too, location technologies that can tell systems where you are. All those WAP phones will need to know where you are before they try selling you a pizza. (Before anyone asks, no we haven’t included any WAP companies, a sector where hype exceeds reality by a large margin.) That’s why PipingHot Networks and Cambridge Positioning Systems make it onto our list.
Here’s Dave Cheesman’s yardstick for seeking out interesting investments: “A lot of people forget about what goes on in the back room,” he explains. Never forget, he adds, “obscure bits of technology that surround the mobile phone industry.”
The same rule applies to life sciences. Bioinformatics blends leading-edge medicine with the backbone technology such as the net. The result? “Telemedicine.” Imagine a patient in Australia being diagnosed, and even treated, by a doctor on the other side of the world. This is Nexan territory. Again, the figures make entrepreneurs’ knees tremble. Frost & Sullivan has forecast a market for bioinformatics systems - hardware, software and databases - worth about $2.2bn by 2004.
F&S has also looked at diagnostic imaging. This industry, it reckons, could hit $4.22bn by 2006. Here comes Oxford Medical Image Analysis.
Even the wackiest of our 21 are, in some way, “information” companies. ElectroTextiles may make its name through intelligent underpants; but just think of the potential if those pants started talking to each other.
The accusation that always gets lobbed at UK science-based businesses is that they aren’t ambitious enough. “Yeh, yeh, great science, but where’s the market potential?” Well, you won’t find much coyness here. Nanomaterials... durable flat screens... optical components... all these are £10bn-plus markets. You’ll even find a rare sighting of a “petabit” in our list - that’s a chip that can process 1,000 trillion bits of information in one second. Now that’s what I call numbers.

Totally spun out
One type of company dominates our list: the spin-out. Cambridge Silicon Radio popped out of Cambridge Consultants, an R&D and product development consultancy owned by Arthur D Little; Cambridge Positioning Systems emerged from The Generics Group, which also gave birth to Absolute Sensors and Imerge (two IT companies that didn’t quite make it onto our list). ARC Cores spun out of Argonaut.
Some spin-outs are accidental. They happen when a member of the team decides to do their own thing - sometimes they take technology that doesn’t fit in with their original employer; at other times they fancy the life in a start-up venture; or their original business has changed tack. PipingHot Networks, for example, owes much to restructuring at Nortel. Kevin Ford of Optical Micro Devices did time with chip-maker AMD and, more recently, with Bookham Technology. “Our technology fundamentally came out of the semiconductor industry,” he says.
Serial entrepreneurs crop up often in our list, too. “Companies require different skills of their chief executive depending on their different stages of development,” says Anne Hacker of Metris. “I’m probably one of the longest-running chief executives of biotech companies in this country,” she smiles. Don Spalinger worked in a series of start-ups before Southampton Photonics. Dennis Taylor’s name crops up again and again in serious technology circles.

Bye bye, academe
It wouldn’t have happened 20 years ago. Today, groups of academics are deciding that there are better ways of bringing R&D to market than publishing erudite papers and waiting for someone to take notice.
Take ilotron. Here, the Photonic Networks Research Centre at the University of Essex was the R&D catalyst. This is where a team of egg-heads studied photonics and optical communication networks. Southampton Photonics and Kymata both take technology from Southampton University (Kymata also picks up processing expertise from Heriot Watt University).
Metris owes much to research by Steve Smith and Steve Charnock Jones working in Addenbrooke’s Hospital in Cambridge. The research behind Inpharmatica came from collaboration between Professor Janet Thornton’s group at University College London and the Wolfson Institute for Biomedical Research. Professor Mike Brady of Oxford University fuelled the science behind Oxford Medical Image Analysis.
Why the boom? “The government has helped,” says Amadeus’s Glover, citing such initiatives as the University Challenge Funds. These may not amount to huge sums, she says, but they send out the right messages.
The Conservative government also encouraged academics to “think business” by relentlessly slashing budgets, leaving industry as the only way of funding research. Today the Labour government is at least as keen on the idea of turning research into businesses, even though it has reversed the decline in the science budget. In its latest White Paper on science policy, published in July, the DTI promises to invest £140m over three years in a Higher Education Innovation Fund. There will also be a further round of the University Challenge Competition.

The county set
That White Paper also announced the government’s intention to “create new Regional Innovation Funds of £50m a year to enable Regional Development Agencies (RDAs) to support clusters and incubators and new clubs of scientists, entrepreneurs, managers and financiers.” Just one problem. Most technology businesses are based in just a few parts of the country.
“Clusters tend to form around great universities,” says Glover. “Twenty five per cent of our deals are in Cambridge.” (Amadeus was founded there.) But other hotspots are emerging.
After Cambridge, the two regions with the greatest concentrations of young businesses in our 21 are: the M4 corridor between London and Bristol; and the region around Glasgow and Edinburgh.
Scotland spotted photonics early. The Scottish Optoelectronics Association was formed way back in 1984; 85 organisations have since joined up. Glasgow and St Andrews universities have come together to launch the Compound Semiconductor Technologies Initiative, an incubator for photonic start-ups. This £7.5m initiative also has facilities to make things for these companies.
But Scotland isn’t content to concentrate on just one technology. It’s also a centre for biotechnology, especially around Dundee. The trick is always the same: success feeds on proximity to brains.

Materials

ElectroTextiles
www.electrotextiles.com

Facts: A real pioneer, founded by Chris Chapman and Dave Sandbach in 1998. “We’re always pushing at the frontiers of what this technology is capable of,” says Chapman. Troubleshooter Stuart Wallis is in the chair. Bernard Smith (pictured) is CEO.

Numbers: £2m growth capital from 3i in July.

You must be kidding! Well, we all wear things, don’t we? Knit together tiny conducting fibres and traditional fibres to produce fabrics that are sensitive to touch and pressure. This is the world of smart material. This special furry stuff can also conform to almost any shape.
ElectroTextiles’s product is called Elektex. The fabric can detect where you touch it, and how much pressure you apply. Feed that data to a computer and you can get up to all sorts of tricks. Cloth keyboards, for example.
“We design and develop soft switching and sensing fabric and electronic systems and license this to go into products,” says co-founder Chris Chapman.

Bottom line: High-tech meets the cat walk.
This could be really fashionable.

Photonic Materials
www.photonicmaterials.com

Facts: Formed in July 1998.
CEO is Dr John Nicholls (left).

Numbers: Seed funding of £650,000 in January 1999 from Scottish Technology Fund and 3i and Milton Chang. Second round of £2.5m from 3i, Intel and Scottish Equity Partnership.

You must be kidding! Trade in optoelectronics components is forecast to hit £38bn. Big ambitions here. Photonic Materials wants to be “the world leader in the growth of high quality optical crystals.” Most of its few competitors are based in China, so if world needs a “secure” supply of optical crystals, PM looks well placed.

Bottom line: Infrastructure companies at the start of the food chain are always appealing, especially when they have a keen R&D edge.

Nanomagnetics
www.nanomagnetics.com

Facts: Formed in 1997 by investment banker Nick Tyler (left) and scientist Eric Mayes, this serious science business lurks in Bristol Uni.

Numbers: Just secured £6m-plus in second round funding from big investors, including UBS.

You must be kidding! Wait for it. The total global market for magnetic storage - digital TV, video-on-demand etc need massive storage capacity - is tipped to top $87bn within two years.
Every 18 months or so, the industry finds a way to double the storage density for data. Nanomagnetics works on the principle that the old technology will hit the limits in the not too distant future. The PC on your desk now probably has magnetic discs that store between three and five billion bits (gigabits in computer-speak) per square inch. At a push, old-tech might get to 40 gigabits a squinch, but NanoMagnetics expects to get several hundred gigabits per square inch within two years.

Bottom line: if this one really does come through, then we are talking about a change in the face of business.

Nanox
www.nanox.co.uk

Facts: Spin-out from Oxford University, launched by Isis Innovation. Draws on the work of Professor Peter Dobson and Dr Gareth Wakefield in Oxford’s reputed department of engineering science. Dr Bob Reid is chairman.

Numbers: Mostly funded by private investors and the university. Serial investor Richard Farleigh (check him out at www.real-business.co.uk) is in early, as usual.

You must be kidding! Mind-boggling. Nanox reckons the “world market for nanomaterials is expected to be valued at $5bn to $10bn in 2010.” This is technology writ small, where you make things an atom at a time with dimensions that are 100th the diameter of a human hair. Nanotechnology makes microelectronics look like heavy engineering. Materials behave differently at those dimensions, so you can get them to perform clever tricks for you. Nanox is working on technology that could have an impact on yet another new technology, flat panel displays.
Nanox has cooked up, and patented, some smart chemistry for making nanomaterials. The approach could also work with materials for many other uses. It could create additives that combine with other materials to alter their properties, making them resistant to wear or to fire, for example. Then there are applications in electronics, catalysts, even cosmetics, says Nanox.

Bottom line: Touted as the science for the 21st century, nano-technology only has to live up to a fraction of the hype to make a lot of people happy. But you have to be able to make the stuff, which is where Nanox comes in.

Ceravision

Facts: first developed its technology at the Rutherford Appleton Laboratory outside Didcot in Oxfordshire.
Co-founders are Anthony Cooper (left) and MD Tim Reynolds.

Numbers: Ceravision has signed contracts worth at least $20m in revenue over the next two years - with “leading East Coast-based OEM on behalf of a prestige car manufacturer”; and with a Silicon Valley technology company, which is backed by one of the world’s leading mobile telephone manufacturers.

You must be kidding! Global market for tough durable displays is estimated at $18bn a year. For decades companies have spent billions trying to produce a robust, limitlessly scaleable screen display. All in vain. Until now, perhaps. A British company has pioneered a unique screen display based not on glass but on ceramic.
One Japanese company spent $400m on LCD research - and failed to produce a better display. “We’ve spent just 5m in total on our research,” says Reynolds. “We believe in the intelligent management of money... All of our cash has gone on technical development...There are no Ferraris here...”

Bottom line: The new, commercial face of UK science.

optical comms

Southampton Photonics
www.southamptonphotonics.com

Facts: Spin-out of the photonics research lab at Southampton University. CEO Don Spalinger (left) is ex-Gartner Group. Professor David Payne led the team that invented the optical amplifier in 1986.

Numbers: Its $55m must be one of the biggest doses of start-up funding for a tech company in the UK.

You must be kidding! “The global communications market is being driven by Internet traffic, currently doubling every 100 days,” says Spalinger. The DWDM market revenue could, says Cahners In-Stat Group, hit $21.5bn in 2004. Up from $4bn in 1999. Prof Payne led the team that, in 1986, gave us the fibre amplifier. The trick was to devise a fancy glass fibre that could do things with light that were previously done electronically. Southampton Photonics is up to the same tricks, making even smarter fibres that are even cleverer.
“What differentiates us more than anything is the fact that we go back to the chemistry of glass and the physics of light,” says Spalinger.

Bottom line: The market is crowded, but this one comes with an impressive history and a back-to-basics approach that starts with the science.

Optical Microdevices
www.omd-fab.com

Facts: Founded in December 1999. Based in Swindon. CEO Kevin Ford (left) is ex-Bookham. Chairman Dennis Taylor is ex-Hewlett Packard UK.

Numbers: Secured £14.8m first-round funding from Advent, Quester, Storm Ventures and others.

You must be kidding! OMD reckons that foundries will grab a $1.5bn share of the $7bn market for photonics components in 2004. OMD is, in the jargon, a foundry. Helps customers perfect their designs and turn them into reality. So if, for example, Agilent, Nortel or E-Tek Dynamics - an investor in OMD - need passive optical components...OMD is in the middle of assembling “the world’s first 8-inch Fab in the Opto-electronic space.” That means they make optical circuits on thumping great wafers. This keeps down the cost of the individual bits.
OMD’s work in younger technology means much bigger margins than the six or seven per cent you get with silicon semiconductors. “If it doesn’t do 40 per cent, I will be very surprised,” says Ford.

Bottom line: more than a mere contractor, OMD’s expertise should put it in a good position to grab some of a big market.

Kymata
www.kymata.com

Facts: Another Scottish firm, the name comes from the Greek for wave. Based in Livingston, with 250 employees. Only two years old. Brendan Hyland is CEO, Richard Laming the technical guy.

Numbers: Raised $72m funding in March this year from big-name investors such as Kleiner Perkins, 3i and Bowman Capital to fund manufacturing expansion.

You must be kidding! Worldwide optical component telecoms market forecast to increase from $6.6bn in 1999 to $23bn in 2003. Kymata makes the optical equivalent of electronic integrated circuits. It starts with silicon chips similar to those used to make electronic microchips. Then they use their clever processing techniques to “imprint” optical circuits on the chip. Tailor the optical bit and the chip can perform many of the tricks it takes to run a communications network. Kymata is now ramping up production as quickly as possible.

Bottom line: it looks like becoming a crowded market, but these are bright people with some nice production technology.

ilotron
www.ilotron.com

Facts: An offshoot of research at Essex University. Formed in January 2000. MD is Dr Chris Lilly (left). 30 staff.

Numbers: Got going with $10m from 3i.

You must be kidding! ilotron’s market could be worth as much as £20bn in North America and Europe over the next five years - a quarter of it in Europe. Plans to make hardware to manage telecoms traffic - stuffing information streams into optical cables, switching between fibres at the junctions on the “telecoms motorway”, sorting a stream out and passing it on to the final destination.
ilotron reckons to have come up with clever ways of handling telecoms traffic. It is all about “packet switching.”
This lets you chop up messages into little bits and send them on their way on the most effective route. Of course, you have to put it all together at the end but, guess what, ilotron’s technology does that, too.

Bottom line: future-proof technology. Packet switching is in vogue. If ilotron can deliver, the future’s bright.

Broadband

Cambridge Silicon Radio
www.cambridgesiliconradio.com

Facts: An MBO from Cambridge Consultants, CSR’s first products surfaced in 1998. Phil O’Donovan is MD and co-founder; James Collier is technical director and co-founder; John Hodgson (left) is CEO.

Numbers: In May 1999, 3i, Amadeus and Gilde IT fund put $10m into the business, valuing it at £6.3m. Intel Capital also came in.

You must be kidding! A genuine broadband company. Cambridge Silicon Radio “designs and markets single-chip short-range radios which allow wireless communication between a plethora of devices, including mobile phones, personal digital assistants and PCs.” The important word here is Bluetooth (see page 18), the technology that allows you to depose the cables that connect phones, laptops, Palm Pilots etc. To make Bluetooth happen, there’s a chip in there communicating with other chips. CSR designs those chips.

Bottom line: Alcatel says it will add CSR’s Bluecore chips to new mobile phones. CSR even has a hotline into the people who make and use cheap chips. Hard to see how they can go wrong.

Element 14

Facts: Silicon is the 14th element in the periodic table, hence the name. This is a spin-out from Acorn. Stan Boland is president and CEO. The team also includes Sophie Wilson, the chief architect of what became ARM’s core technology. It also snapped up a team of ADSL experts from Alcatel.

Numbers: August 1999 secured $13m from Atlas Ventures and others.

You must be kidding! Forecasts say that by 2002 there will be some 1.3 billion devices manufactured with embedded digital signal processors and double that figure by 2005. New company that designs chips for ADSL (Asymmetrical Digital Subscriber Line) - a way of getting movies and high-quality sound to customers. To fit into a building without turning it into a crowded hot house, the DSL bits at the phone exchange have to be compact and power-frugal. Element 14 specialises in low-power chips that can cram a lot of lines into a small space. The company designs chips but farms out production to a Taiwanese foundry. The first samples of what Boland believes will be “the world’s most powerful DSL chip,” are due by the end of the year.

Bottom line: ADSL is exploding in the US. The rest of the world will follow, even the UK.

ARC Cores
www.arccores.com

Facts: Spun out of Argonaut in late-98. Hertfordshire-based. Jez San, of games company Argonaut fame, is a founder. CEO Bob Terwilliger (left).

Numbers: $6m first-round funding from Nomura and Apax. Second round in June 2000 of $50m from Texas Instruments, Invesco and Goldman Sachs.

You must be kidding! In 1999 licensing revenue will top $5m, with $15m expected this year and around $33m in 2001. Royalty revenues will begin to flow in 2000. IPO in 2000? Last September the Canadian group Hyperchip put 32 ARC core processors onto a single chip. It achieved one-petabit performance - in other words, it munched 1,000 trillion bits of information per second.
“Our technology provides a ten-fold increase in operating performance for many digital devices. No-one else can do this,” says ARC Cores’ CEO Bob Terwilliger.
One Californian company, Sierra Imaging, has put ARC technology into cameras producing images containing 3.3 million pixels - but using the same energy as earlier cameras producing 300,000 pixels.

Bottom line: Britain’s next ARM?

PipingHot Networks
www.pipinghotnetworks.com

Facts: Launched in January this year, Marcus Lovell Smith (left), Christopher Cabot and Tim Pickup run the show.

Numbers: Backed by Atlas Venture and Kennet to the tune of $6m.

You must be kidding! The market opportunity for broadband wireless will grow from $1.7bn in 1999 to $16bn in 2005, says researcher Ovum. PipingHot Networks plans to bridge the gap to the final customer. Throw away that copper cable. Turn on the radio. The company will make kit to sit alongside the electronics on aerials used for mobile phones. This then talks to radio gear in the user’s premises.
The key to this broadband technology is a new set of radio wavelengths and using internet protocols to send messages. PipingHot Networks plans to have equipment out for trials later this year. It is already well in with such companies as Cisco, who see broadband as a way of applying their expertise in computer networks to telecoms.

Bottom line: Bringing broadband to the masses. If BT continues to sit on its hands, PipingHot Networks could steal in.

Weston Antennas
www.westonantennas.com

Facts: Makes the most advanced commercial earth station antennas available. The multi-techno-talented Dennis Taylor (left) chairs the company (he’s also chairman of Optical Microdevices). Paul Weston is MD.

Numbers: Advent put in £1m in 1999.

You must be kidding! The existing market is more than 100 times the company’s current turnover. Then there are intriguing new ideas for satellite communications. The next step? Internet via satellite. That means big time for Weston Antennas, which makes big dishes that feed the satellites that bring us Sky TV and other delights.
Bandwidth is king in the new coms era. There may be lots of technologies out there offering it, but when it comes to bandwidth, says Paul Weston, “everything that can get used does get used.” And he insists that low-orbit satellites are a great way to do things.

Bottom line: growth potential is enormous, and it’s nice that broadband needs some “ordinary” engineering to keep its feet on the ground.

Cambridge Positioning Systems
www.cursor-system.com

Facts: Formed in January 1998. Patented Cursor. Prelude and 3i each invested £750,000 for 15 per cent of the company. In December 1998, they returned for some more - putting in £1.1.m. In the second round, CPS raised $15m, this time from a syndicate led by 3i and American investors.

You must be kidding! Forecasts suggest that in five years we’ll spend $10bn-plus a year on “location services.”
The world’s gone mobile. But where exactly is everyone? Enter Cambridge Positioning Systems (CPS) and its CURSOR system. This can track you down to within 50 metres. And you don’t need an expensive GPS system to do it. Car broken down? Ring the AA and CURSOR will tell them where you are. Want to track down a service engineer and a hotel? CURSOR can find the nearest one.
It’s all done with chips in your phone and a set of base stations. The equipment sits alongside the mobile network without getting in its way. So CPS is working with mobile phone makers and network operators.
CPS has run trials around Cambridge with the AA, Vodafone and Maxon. It also has agreements with Mitsubishi, ARM and Philips Semiconductors.

Bottom line: It’ll be hard to get lost with this one.

Healthcare

Inpharmatica
www.inpharmatica.com

Facts: Set up in 1998 on the back of science from University College London. Professor Ken Powell is the CEO and Professor Janet Thornton heads up the brainy stuff.

Numbers: raised over $6m including seed financing from Unibio and a first round of VC funding from 3i and GIMV.

You must be kidding! From now on, genetics will dominate drugs research. Celera, the US company in the human genome race, is worth around $4bn.
Pure bioinformatics. Inpharmatica applies computer power to understanding the DNA sequence, the structure of proteins that it orders our bodies to make, and what those proteins do. This information is essential in finding “target molecules” that influence those proteins and could become new drugs. Inpharmatica provides companies with the capability to take the sequence of the human genome and analyse it to the fullest degree. The company has around 35 employees, mostly bioinformatics and IT people, and some hefty computers for them to play with. The customer base is in big pharmaceuticals and biotech.

Bottom line: It will be a while before companies make real money out of the human genome. Inpharmatica could reduce this time lag, and make itself a packet in the process.

Oxford Medical Image Analysis
www.omia.co.uk

Facts: Professor Mike Brady was working on robots and vision in the engineering department at Oxford University when he got interested in medical imaging. Met Dr Jacques Feldmar in 1995 at the French national laboratory. Set up OMIA in 1997.

You must be kidding! Heart experts in the US alone handle eight million echocardiology (ultrasonic heart) examinations a year. And that’s just one area where IT can help in diagnosis.
What does the medical world do with all the information churned out by increasingly clever diagnostic instruments? OMIA creates software that helps medics exploit their diagnostic hardware, the ultrasound and MRI systems used to look for cancer, cardiac damage and so on.
Clinical teams also like the idea of making better use of medical imaging, combining data from different systems, for example. There are plenty of opportunities for tying together all the information from different imaging systems and other data.
And OMIA doesn’t ignore the internet. It’s working on products that make it easier for medics, patients and so on to share information.

Bottom line: There will always be pressure to keep down medical costs, and people prefer to be at home rather than in a clinic.

Internet

Searchspace
www.searchspace.co.uk

Facts: The original idea came out of research in the Intelligent Systems Laboratory at University College London. Searchspace founded in 1995 by CEO Jason Kingdon (left), Sukhdev Khebbal and Suran Goonatilake.

Numbers: Earlier this year, 3i’s Thames Valley office pumped £2m into Searchspace to fund expansion into the US.

You must be kidding! Valuation could be £600m, according to some observers. An IPO looms later this year. Okay, it’s a net company. But this one tags on pattern recognition. Searchspace has thrown artificial intelligence - in the shape of genetic algorithms, neural networks and other arcane techniques - at fraud control and other problems in information management.
The heart of the business is what Searchspace calls intelligent Transaction Monitor (iTM). This fancy software watches transactions for signs of skulduggery, or for patterns of business activity. With clients such as the London Stock Exchange, up to 40 per cent of the world’s equity transactions could be going through Searchspace’s systems.

Bottom line: Searchspace is in an area that can do wonders for businesses desperate to make sense of torrents of data.

Q-One Biotech
www.q-one.com

Facts: Set up shop in Glasgow’s West of Scotland Science Park in 1990 with six employees. Nearly 160 in Glasgow and the US. Gillian Lees is the director of operations.

Numbers: 3i got the ball rolling but Q-One has funded its growth itself so far with the odd development grant.

You must be kidding! Biotech market could exceed $45bn by 2008, and someone has to make the stuff. Testing alone is worth about $500m. Q-One carries out “biosafety” tests as well as contract manufacturing. It can handle a wide range of biopharmaceuticals such as monoclonal antibodies, vaccines, recombinant DNA products, gene therapy products, and xenotransplants. “There is a big demand for good-practice manufacturing facilities as companies move from R&D toward commercialisation,” says Professor David Onions, Director of Business Development.

Bottom line: the biotechnology business also needs its manufacturers.

Metris Therapeutics
www.metris.demon.co.uk

Facts: Founded 1996 around research at Addenbrooke’s hospital, Cambridge. Purpose-built labs near Reading. Founded by Professor Stephen Smith and Dr Steve Charnock-Jones. Ann Hacker is MD.

Numbers: Recently raised £11m from Schroder Ventures and others, making it £16m in all.

You must be kidding! Ten per cent of women suffer from endometriosis, a painful womb condition.
Don’t call us a biotech company, says CEO Ann Hacker. “We’re a women’s healthcare company, with a woman CEO, and with lots of market opportunities.” A staff of around two dozen, most of them research scientists, work on new products to treat gynaecological disorders such as endometriosis, uterine fibroids, and the effects of PMT and the menopause.
Metris has been “drug focused” so far, but is moving into drug delivery. It recently filed a patent on new ways of introducing drugs into the vagina.
New opportunities? Drugs that are already licensed or in development by big pharmaceuticals groups. Or traditional biotech companies with more product leads than they know what to do with - products that might not fit in with their current plans might suddenly make sense in the hands of a company that concentrates on women’s health.

Bottom line: at least half of the population will be keen to see this one succeed. As much as the products, it’s the market focus that appeals.

Nexan
www.nexan.com

Facts: Led by CEO Harpal Kumar (left), a former McKinsey healthcare whizz. Graham Lay is development director and Jed Place, ops director.

Numbers: Recently raised £12 m in second round funding from a syndicate of investors including 3i, Schroder Ventures, Dresdner Kleinwort Benson, Prelude Trust, Advent Venture Partners, The Aurora Funds and others.

You must be kidding! Frost & Sullivan has put the market for bioinformatics hardware, software and databases at about $2.2bn by 2004. Five million Americans suffer from congestive heart failure that puts them in and out of hospital, sometimes several times a year.
Medical instrumentation is one of those unsung areas. Forget about drugs, how do you check a patient’s progress in clinical trials without dragging them into the clinic? Enter Nexan with its medical equivalent of “remote sensing.”
The company’s approach fits patients out with electronics and stuff that will pick up key physiological signals - heartbeat, respiration and temperature. The system stores the data in a base station in the patient’s home. The station sends its data over the internet or the phone line to a monitoring site where Nexan’s software takes over.
Such regular monitoring could reduce hospital readmissions, and allow patients to go home earlier. Nexan’s approach could also influence drugs trials, letting doctors check patients by remote control to see the effects of drugs or devices. The beginning of the wireless medical boom?

Bottom line: everyone wants to reduce healthcare costs. Anything that keeps patients at home and out of a hospital is in with a chance.

Over to you
So after scouring the country for three months, these were our 21 choices. They all had the team, the technology and science, the potential and the all-important funding to help them make it seriously big.

But we recognise that the list can’t be foolproof. Have we missed anyone? Who would you have picked? If you know of any companies you think we should have included (even if it’s yours), why not tell us about them. Write to: Matthew Rock, Real Business, Milbank Tower, Millbank, London, SW1P 4QP, or e-mail us: editors@realbusiness.co.uk

We look forward to hearing your suggestions.

Contacts
Michael Kenward obe is a science and business writer and former editor of New Scientist. The Ceravision and ARC Cores profiles were written by Susan De Jongh.

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