You might not think that the humble screwdriver is much of an investment proposition. It has been around for five hundred years, and it hardly seems possible to improve upon its simple design.
But that’s exactly what one French company has done. It is called SpineGuard, and its name was mentioned at the AngloNordict Medtech Conference that I attended last week. Like many great products, SpineGuard’s screwdriver answers a problem, and in this case it is to do with spinal surgery.
Surgeons fix damaged spines by screwing them together, which is fine, so long as the screw goes no further than the bone. But if it pierces through the bone to the nerve tissue at its core, then the result can be paralysis or even death. So the problem is – how much further can you turn the screw before turning a restorative operation into a disaster?
SpineGuard provides the answer.
The screwdriver that talks to surgeons
The screwdriver is called PediGuard, and it is the first wireless device that alerts surgeons if they are getting into dangerous territory. The tip of the PediGuard is fitted with a sensor that measures the electrical conductivity of the tissue. When it is encountering bone tissue it emits a steady bleep, but when it starts to sense softer tissue the bleep accelerates, warning the surgeon to go easy – just like parking sensors on a car. This is a genuine advance, and you can find out more by visiting the SpineGuard website. At the end of April, the shares were listed on the NYSE Alternext under the symbol ALSGD, with a value of €21m.
Whether or not SpineGuard’s screwdriver will be a success, I cannot say. But it does illustrate the attractions of medical device companies. Medicine is an inexact and inefficient science;
opportunities for new innovation are limitless. Over the coming years, this stands to completely transform the way we live. And that means there is a spectacular opportunity here for private investors. In fact I believe this could lead to a financial mega-trend. And the good news for us, is that many private investors are completely missing the story here. To get clued up, you can read more here.
Demand for a product that solves a big problem is certain. If the SpineGuard screwdriver really does reduce the considerable risks of spinal surgery it should undoubtedly be adopted. Earlier this week SpineGuard received approval for its PediGuard sensor technology.
With this technology patent protected it should be able to command good profit margins and will be hard to displace.
Develop an exit strategy and look to the States
The aim of the AngloNordict Medtech conference was to introduce entrepreneurs with smart business ideas to investors. And by the sounds of things, much advice was handed out to the former. Perhaps the best I came across was that these entrepreneurs should have a clear idea of an exit strategy. While start-up companies are good at coming up with new products they cannot realistically hope to sell them without some help from bigger players with established sales networks. One speaker, Anne Blackwood, explained how to sell to the NHS. The fact her title is ‘CEO Health Enterprise East and chair of the Health Innovations Alliance’ – the latter a branch of the newly created ‘National Network of NHS Innovation Hubs’ – only underlines the complexities of the NHS.
But small companies really need to have an eye on the USA. It is the biggest healthcare market out there and it is the big US medical product distributors that might be interested in acquiring something like the PediGuard technology. Knowledge of the strategic direction of these giants should help a start-up to define its own business plan.
At the conference a number of familiar themes were aired. Financing is easier in the USA where, rather than being penalised for failures, entrepreneurs are assumed to have learned valuable lessons.
The reward for the winners can be great
As the population gets older, the elderly suffer from a range of chronic diseases. The number of centenarians in the world is expected to rise from about 15,000 today to 228,000 by 2050. Nanotechnology is playing an increasing role in the industry, in areas such as personal diagnostics, and cytometry (the measurement of cells). Professor of nanobiotechnology, Liesbet Lagae, from Belgium’s IMEC Life Sciences Research Centre, offered the vision of mobile phones with the processing power to find mutations in DNA.
Among the companies presenting, CareTelcom is using smartphones equipped with biomedical sensors to capture vital signs, compare them to a database and pick up early health warning signals.
Sapiens Steering Brain Simulation has shown that the delivery of mild electrical pulses into the brain can help patients suffering from Parkinson’s and other neurological diseases. ‘Brain pacing‘, said chief executive Sjaak Deckers, is today where cardiac pacing – the use of pacemakers to regulate the heart – was in the 1980s.
And Calon Cardio-Technology Ltd is developing theMiniVAD, a miniature implantable blood pump for the treatment of advanced chronic heart failure.
For all such innovative small companies the challenges are immense. They need the right team. They must be able to attract funding. They must grapple with regulatory requirements and must promote their stories. None of this is easy. But in healthcare, innovation is constant. New devices do make it to the market and the rewards for the winners are great.