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NEWSLETTER May 2022

Introduction by the founder of Snedden Campbell

nedden Campbell (SC) is a Callendar-based recruitment firm for the global medical technology sector. It was founded by me and my wife, Jennifer Snedden, in 2001 as a recruitment partner for medtech firms in Europe and beyond. We find senior, skilled people and we make board placements in companies that are involved in a range of areas, including life sciences, biomedical, diagnostics and medical devices. Working directly with company management or engaged by external investors, we have placed skilled staff in companies in the UK, Spain, France and Denmark and we have attended meetings in Germany, the Netherlands, the Czech Republic and Dubai. As a small company with a global audience, we are one of only a small number of recruiters with more than two decaces of experience in medtech recruitment and we have an enviable and hard won reputation for quality, effectiveness and dependability, which benefits from a large amount of repeat business. We bring a specialist understanding of the medical technology industry to the business, plus a mix of experience, curiosity and creativity to help find the best possible candidates available for your company. We’ve also been told on many occasions that working with us is an enjoyable experience. I have been in candidate search for more than 30 years. Prior to launching Snedden Campbell, I held senior roles for some of the UK’s biggest recruitment companies. Fed up with men in grey suits, pointless KPIs and sharp practice, I decided to launch a new kind of retained medical technology search consultancy that would bring

approachability to headhunting, where clients and candidates would be treated equally and where nobody ever said ‘touching base’. I now spend my time meeting clients and delivering on projects around the UK, Europe and worldwide. Regular business trips always include a visit to the nearest art gallery or cathedral. Outside of work, I love exploring Scotland on foot and usually in the company of Ziggy, the office wonder dog. If the weather is bad, I’ll head to my bench where I’m making a 1:48 scale, air force in plastic. Jennifer leads our market analysis and candidate search function, as well as providing operational support for Snedden Campbell. She has played an important role in making the company what it is today, primarily by not putting up with my madder ideas. Away from the office, Jennifer relaxes, by designing and making soft furnishings, especially lampshades.

Ivor Campbell CEO of Snedden Campbell

Has the UK jumped the gun in scrapping free Covid tests? With the pandemic seemingly behind us, the Government is now making us pay for testing. But has it miscalculated? By Ivor Campbell

t the start of this year, we were among the first to pick up on a leaked government suggestion that free lateral flow testing to detect Covid among the UK population would soon end. That has now become a reality, despite initial denials by ministers. The Johnston administration has already spent £6billion, allowing Britons to claim up to seven tests a day without charge, and plainly this was not a money tree that could continue to shed its harvest indefinitely. The Government’s winter Covid plan apparently included a provision to limit free tests to high-risk settings such as care homes, hospitals, schools, and people with symptoms, with the cost of future mass testing borne by individuals and businesses rather than the public purse. Education Secretary Nadim Zahawi (pictured inset) initially rebutted the idea, insisting that scrapping free tests ‘is not where we are at,’ using the sort of ambiguous language, so favoured by this Government, that has you reaching for the number of a good lawyer. Perhaps Zahawi hadn’t been told of the plan; perhaps he didn’t want to answer any more questions about it. Whatever the reason, it was no surprise when the change was pushed through and that, after all, is the point of floating unpopular measures in advance, through unnamed sources. What was more surprising – shocking even – was that, with the notable exception of Nicola Sturgeon, The Scottish First Minister, no one seemed remotely bothered by the suggestion. We warned at the time that anyone who wanted to know what could happen following the imposition of a mandatory testing programme on a population, with only the free market left to decide on incidental issues like cost and distribution, need look no farther than the United States. There, a ‘wild west’ evolved in the first year of the pandemic, as labs and testing facilities were free to charge whatever the market would bear for tests that we take for granted, fuelling a multi-billion-dollar industry. Earlier this year, the US-based Consumer Report website warned: “The next time you get tested for Covid-19, it might cost $130, $385, or no money at all.

TESTING TIMES: As the cost of living crisis bites, Britons are now having to pay for lateral flow tests, main. In the US, President Joe Biden, below, has expanded the availability of publicly funded test kits

“Some labs tack on additional fees such as those for ‘specimen collection’—the act of inserting a cotton-tipped plastic swab in your nose for a few seconds. Others may even bundle together several tests for almost a thousand dollars.” With regulations that allow pop-up companies with no healthcare experience to offer rapid testing, limited supplies of tests are snapped-up and sold on for huge profits. Just as the UK government was planning the ending the free supply of lateral flow tests, the Biden administration belatedly changed tack. In January, the poorest Americans had tests delivered to their homes for the first time, and those with health insurance got the cost of their

at-home tests reimbursed. As attention switched in the previous 12 month from testing to the rollout of the vaccination programme, the emergence of the Omicron variant brought it sharply back into focus. In the early stages of the pandemic, the diagnostics industry appeared to believe there would be a future need for sophisticated, rapid-testing hardware. Instead, the highest revenues and profits were in the mass production of relatively low tech, at-home disease screening kits. While the UK government is to be commended for being on the front foot with the rollout of vaccines, it has been less successful in helping British companies benefit from this mass testing market growth. To date, the biggest winner has been private equity-backed Innova

Medical, which won £3.7bn in UK government contracts, despite its Chinese-manufactured lateral flow tests being recalled by the US Food and Drug Administration after they failed to provide acceptable reliability data. A senior diagnostics industry figure recently told me that he’d been in conversation with our Prime Minister, who left him with the impression that he thought British companies supplied all of the Covid testing kits used in the UK. Mr Johnston was apparently unaware that, while Innova Medical might have operations and research and development facilities in the UK,

its base is in California, not Britain. A quick Google search would have told him that, while the company has plans to build a new production facility in Wales, its UK chief executive Daniel Elliott fears it doesn’t have sufficient contracts to make it viable after the company failed to win additional UK government orders. We must learn to live with Covid, so we are told, which also means, presumably, that we must also learn to live with Covid testing. The UK has 13 large providers of lateral flow tests who have formed the Laboratory and Testing Industry Organisation to set and police their own standards. With a strong and

potentially viable manufacturing capacity and a seemingly ongoing demand for its products, both the consumer and producer in this market deserve better support than they appear to be getting from the government. As the sudden emergence of Omicron demonstrated, forecasting demand is problematic, and, like flu, Covid may become seasonal. However, the market for tests is not limited to this country – fewer than one per cent of tests have gone to lower-income countries. As we have become practised in self-testing, future demand may come from tests that distinguish Covid from flu or the common cold. However you look at it, ending free tests would be short-sighted from public health and business perspectives. Ivor Campbell is Chief Executive of Callander-based Snedden Campbell

charting how it intends to transfer from proof-of-concept to full-scale production, and who will be on the team to ensure those mechanisms work smoothly. For the industry to continue growing, companies need to think more like Premier League football

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Any manager worth his salt will be constantly assessing how good his current squad is clubs, which have academies to develop players for the future. The richest clubs like Real Madrid, Juventus and Manchester United, can afford to buy expensive talent to help them keep winning matches and to stay in the highest and most lucrative divisions. The rest rely on identifying young talent, nurturing, and developing it to help them remain competitive, with the option of selling some players on at profit. All professional football clubs, no matter their size, have talent scouts to advise the manager and his staff about which players to recruit and invest in. Pep Guardiola, the Manchester City manager (pictured below), generally regarded as one of the the most tactically astute and business-savvy managers in the modern game, makes a point of doing both by nurturing talent through the club’s youth academy which he helped to build.

SQUAD GAME UK diagnostics chief executives could learn from football managers about recruitment and retention strategy to ensure they get the best out of their staff, writes IVOR CAMPBELL

ven before the Covid pandemic struck there were signs of significant growth in the UK in vitro diagnostics industry. In 2019, the last year for which figures are available, its market increased by 3.1%, compared with a rise of just 0.3% in France and a fall of 0.4% in Germany, its nearest competitors. A significant component was instruments and consumables, while there was particularly strong growth in infectious disease testing revenues. At the time, a major concern was Brexit and its likely impact on supply chains and market access, and we will only know if those were borne out when the European IVD market statistics for 2020 are published later this year. The response of the UK industry to the challenges of the coronavirus – with existing companies and start-ups alike stepping up to the plate with supply of hardware and development of new technology – promises to make for positive reading. But as the darkness of Covid lifts, there is a significant issue that needs addressing, if this is to prove other

than a false dawn for the previously unheralded sector – recruitment. Whether it can attract and retain the level of talent needed and in sufficient numbers to become a major part of the UK MedTech industry remains to be seen and much will depend on how companies respond. The reality is that, until now, many diagnostics companies have been meeting their staffing challenges on a wing and a prayer. Scientists, engineers and statisticians, who have only recently completed postgraduate degrees, are often recruited for complex roles by employers who really need people with 10-15 years plus of industry experiencer. There is already evidence of some firms who require the services of statisticians – where practical, on-the-job experience is vitally important – having to compromise and employ people who have only recently completed their PhD theses. An increasing number of UK companies are attending oadshows in China and Singapore to hire people from South Asia, because they can’t find those with comparable skills and experience in the UK or Europe. We have reached a stage where,

for many med-tech companies, it’s the most cost-effective recruitment policy. The ability of our universities to produce the level and quantity of skilled graduates required by the diagnostics industry is compromised by their lack of capacity. Those graduates who do emerge with good degrees in bio and biomechanical science degrees are more often attracted to jobs in pharma and biopharma because of the higher salaries on offer. And yet, too many companies still see recruitment as a reactive function. The only time they think about their skills complement and talent pool is when someone vital to their operation hands in their notice. They might have endless meetings about marketing and intellectual property protection, but when it comes to recruitment, there is no coherent strategy in place. As a result, the diagnostics industry faces the same dilemma experienced by the wider UK economy on several occasions last year when, for example, it was discovered there was a potentially catastrophic shortage of HGV drivers, fruit and vegetable pickers and suppliers of CO2, which affects the operation of everything from pubs to hospitals. By the time affected industries realised there was a problem, it was too late and the kind of strategy planning and implementation needed to address it can take months or even years. Companies need to think longer term about their staffing needs as well as about the cost of hiring, retention and skilling-up. If they can’t access the skills they need – and will need in the future – on the open market then the only other option is to hire

recent graduates and to offer the level of training necessary to meet their needs. They also need to have in place an effective retention strategy to prevent highly specialised staff, whom they have spent time and money to train, being poached by their competitors. Retention has to be more than installing a pool table in the office and giving workers case of beer at the weekend. Employers need to give more thought to how they can engender a culture of loyalty in their firms, to ensure their staff recognise the effort they have gone to, to find and train them, turning them from raw trainees, into well-paid and marketable professionals. Business owners will often spend hours in the company of corporate lawyers and chartered accountants, perfecting and finalising everything from their tax efficiency, legal compliance and international trade strategies, but those same conversations are not being had about how to get hold of the people they need to make their businesses function and grow. Rather than making assumptions about the level and quantity of talent available, any diagnostics start-up with ambition needs to have a roadmap in place,

Any manager worth his salt, will be constantly assessing how good his current squad is, where there are weaknesses and where his or her team is likely to finish in the league with the players available to them at any given time.The management team will have ongoing conversations about who they need to bring in to achieve specific objectives for this season and the next, about which competitions they can afford to take seriously

and which they can’t. Football agents are paid millions of pounds because they can persuade the best players to sign for particular clubs. They also have a rapport with their clients and are able to tell, through research and instinct, what players are likely to fit well into what teams. Until the UK diagnostics industry takes recruitment, leadership, and teamwork more seriously, and until companies have robust and long-term strategies in place to attract, develop and retain talent, they will struggle to compete for the most prestigious silverware.

been broad minded about where we do our manufacturing and who we do it with, it’s actually a more complex equation. Businesses that may have been prepared in the past to offshore production to save 20% – or even 40% – of manufacturing costs through cheaper labour, have come to realise that, while the good times meant high profits and smiles, the tough times meant potentially having to shut down their entire company because they couldn’t get hold of vital parts. Many owners and chief executives will now be asking themselves if they’re prepared to spend the next ten years strapped to a balloon that could go up at any moment if there’s a problem with their supply base. I suspect most wouldn’t. The advantage, in uncertain times, of keeping key assets and functions close to home, or with stable and dependable partners, can’t be overstated. If Covid and the war have taught us anything, it’s that being at the end of a long supply chain is a bad idea, because the longer the supply chain is, the more things can go wrong. Having an economic strategy that depends on manufacturing in the Far East or importing raw materials from Russia leaves our economy at the mercy of people whom, we have come to realise, to our cost, are not as stable as we thought.

SPOILERS OF WAR Covid and the Russian invasion of Ukraine are a reminder of the risks of offshoring production

ne of the many dehumanising aspects of war is the way in which access to medical provision becomes weaponised like any other collateral resource. Russian forces, in their incursion in Ukraine, appear determined to break every conceivable humanitarian convention, hence their specific targeting of hospitals and their apparent disregard for the suffering of displaced and severely ill civilians. Vladimir Putin seems oblivious not only to the suffering of sick Ukrainians but to Russians as well. While there is evidence that cancer clinics and other medical facilities in the path of his forces have been bombed and abandoned, Putin’s sanctions-hit countrymen and women also appear to be fair game. Public healthcare provision in Russia and Ukraine continues to carry the legacy of Soviet state planning and so funding for both is sensitive to movement in their respective economies. Russia operates a progressive system of compulsory healthcare insurance that covers the cost of all medical treatment for its citizens. Before the invasion of Ukraine, the cost of some treatments, particularly

oncological services, was outstripping tax receipts and the subsequent collapse of the rouble will have hastened that trend. In Ukraine private and public hospitals and clinics are contracted by a national health service to provide cancer care with drug procurement overseen by a separate agency. Here too public spending was struggling to keep pace with rising care costs before a bullet was fired. The ability of Russian hospitals and clinics to treat patients will inevitably be negatively impacted by the war, as a result of worsening financial sanctions, as most medical devices are imported from the US and Europe. In contrast little impact is expected from the loss of exported Russian medical devices as these account for less than 0.04% by value of all medical devices sold globally, according to GlobalData. The Russian economy is about the size of Spain’s and its med tech market, which is limited to Moscow and St Petersburg, is as important in global trade terms as Iberia. Russia may be an important source of raw materials for certain industries, but it doesn’t make the advanced products, such as computer chips or plastic

mouldings, which are important to the med tech industry. Any company in the UK producing medical devices on an outsourced basis will be doing so in Asia, North

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Public healthcare provision in Russia and Ukraine continues to carry the legacy of Soviet state planning America, or Europe, not in Russia. While members of some industries – principally construction and heavy fabrication – might regard the war as a further damaging setback, threatening future growth following the end of Covid restrictions, UK med tech is unlikely to be affected in any significant way. It’s still the case that all the liquidity we saw being released throughout the Covid pandemic is continuing to pour into the sector. A lot of that money is now maturing into products, that we’re likely to see enter the market during the course of this year. There’s decent investment money in from private equity and

venture capitalists (VCs) who don’t see to have lost their appetite at all. The world now has a much better understanding of rapid diagnostics and it will continue to attract a higher level of investment than it did before. There’s a much more solid footing in terms of funding and people knowing what they are doing and also in terms of companies being stress-tested. A few have fallen by the wayside but others are pushing on, for example a number of consultancies related to design development and transfers to production. Of the diagnostics companies that Snedden Campbell has worked with since the start of the pandemic, around 80% benefitted from Covid in some form. In general, UK companies have been good at working through Covid and returning to business as usual, and it has taught us some valuable lessons about resilience. While we have always

AI Pen holds out hope for dementia patients

A Contract Killer DID MIXED SIGNALS FROM THE UK GOVERNMENT CONTRIBUTE TO THE FAILURE OF OMEGA DIAGNOSTICS’ COVID TESTING BUSINESS, ASKS IVOR CAMPBELL

nyone involved in the UK diagnostics industry will have been dismayed at the recent fortunes of Omega Diagnostics, with perhaps an inevitable sense of ‘there but for the grace of God’. The fate of the Clackmannanshire-based, AIM-listed company – whose value fell by more than 90% in the 12 months to February – will, for many chairs and investors, be seen as a cautionary tale for the sector. It’s not so long ago that Omega was valued at £100m and, with its stock trading at 100p, everything in the garden appeared rosy as it eyed a lucrative NHS contract worth a cool £374m to supply lateral flow tests. Last December, its share price dropped by a third overnight amid concern about its ability to raise additional funding. Its value had long since begun to spiral as the government deal unravelled and, earlier this year, its shares were trading at 6p as it sought to reassure the

market it had sufficient cash balances to survive. Omega’s story will have salutary value for investors of the folly of placing undue importance on the promise of large public contracts, particularly in such a moveable environment. A £2.5m pre-production payment given to the company to ramp up manufacturing capacity was not the green light many people interpreted it to be. No final decision was made and, last November, the Government dropped the bombshell that the contract had expired and it would not advance to the production phase. The agreed departure of its capable and experienced CEO, Colin King, was perhaps an inevitable gesture to the stock exchange that it was taking active steps to turn things around as it sought to raise an additional £7m from investors. The denouement for Omega came with the announcement of a heavily discounted sale of its diagnostic test kit manufacturing business and facility in Alva for £1m to Accubio, a wholly-owned

OMG DIAGNOSTICS!: Alva-based Omedga Diagnostics, main, Innova Medical’s UK HQ, left, and inset, Colin King

subsidiary of Chinese firm Zhejiang Orient Gene Biotech as a going concern along with its 109 employees. With Department of Health officials demanding a return their £2million advance to allow Omega to install new manufacturing equipment, its reversal of fortune now seems complete. But the future of its active and innovative health nutrition business is still bright. The test manufacturing business is also likely to fare better as part of a dedicated biotech operation with global reach than as a standalone operation trying to cut it in a cut-throat market where volume is everything. Given the modest size of the industry – The UK’s 13 largest companies that form the Laboratory and Testing Industry Organisation are together worth less than any one of the top 10 Nasdaq-listed diagnostics businesses in the US – the valuation attributed to Omega at its peak was vastly out of kilter with its turnover. And just as the limit of its size and

ambition was somewhere short of the sky, even with the untold riches of an expected government contract at the height of the pandemic, nor is it now on an inevitable path to oblivion. There’s a valuable lesson to be learned from the experience of Omega, both for its own board and for other players in UK diagnostics that, in the future, they should appeal to a more relevant investor and cut their cloth accordingly. A danger for any specialist, technical or scientific business is in attracting investors who lack knowledge of and commitment to the industry – those who are in it for a quick punt and who might as easily be dealing in jelly. They don’t care, they’re only interested in seeing a return on their capital. To get institutional investors on board is hard work. The vast majority of diagnostics businesses in Europe, let along the UK, don’t make a profit and there’s a reasonable minority that don’t make any money at all. Some UK businesses are now seeing

investment from China, Malaysia and even Russia, some of whom may be also spread betting on London property, electric vehicles, and cryptocurrencies. Meanwhile, the UK Government sought to throw its lot in, not with British providers of Covid testing kits, but with the California-based Innova Medical Group. While the post-Brexit mantra of the Government is to invest in British companies to help build a highwage, high-value economy, the reality is that the Department of Health and Social Care has a statutory duty to get the best deal for the taxpayer. The officials who signed off on deals to buy £6billion of lateral flow tests may have a sophisticated understanding of negotiating

public sector contracts, but their remit didn’t involve following an industrial policy that would benefit British providers and, in any event, they didn’t have the contacts to do it. Omega announced the sale of its test kit arm with a valedictory criticism of the Department of Health’s business methods. After expanding its Alva site, increasing its footprint, staffing levels and equipment, as well as installing government funded-equipment, its new chief executive Jag Grewal, said it was “hugely disappointing that, having acted in good faith to establish UK manufacturing for Government issued tests, we find that these tests are, in the main, sourced from China instead”. The main obstacle to UK diagnostics companies benefiting from a Covid dividend was that from the outset

they were – and still are – part of what is regarded by many investors here and abroad as a cottage industry. There was no-one with the scale necessary to do what the Government needed to be done. We’re now experiencing the aftershocks of that realisation and it’s likely companies other than Omega will go from being wildly overvalued to being undervalued before the graph of the earthquake settles down. Then we may see the right kind of investors – knowledgeable, realistic and in it for the long haul – re-enter the market to provide those sound, underlying companies with the stable finance they need to trade and thrive. Ivor Campbell is Chief Executive of Callander-based Snedden Campbell, a specialist recruitment consultant for the medical technology industry.

device that detects minute changes in people’s movements has been developed by Scottish-based scientists to provide early diagnoses of Alzheimer’s Disease, holding out the prospect of prolonged mental health functions for millions of sufferers. Edinburgh-based medical technology company Manus Neurodynamica Ltd is testing its NeuroMotor Pen for the screening of Alzheimer’s Disease (AD) and other forms of dementia, which it aims to make available for use in hospitals, health centres and walk-in clinics. The breakthrough promises a quick, simple, and effective means of identifying patients with AD and differentiating it from mild cognitive impairment, allowing clinicians to create treatment plans earlier. Current detection methods include brain imaging, use of radio tracers, cognitive assessment, and loss of odour identification tests, all of which are expensive, time consuming and not always effective. Early identification of Alzheimer’s can hugely increase patients’ chances of maintaining functional abilities and delaying escalation, where additional care and support is required. The NeuroMotor Pen uses sensor technologies and software that measures users’ limb and hand motion while they are writing and drawing on a tablet. The device records a series of ‘digital biomarkers’ which provide comparative data, allowing clinicians to log minute and highly accurate measurements of decline in patients’ cognitive and motor skills. Artificial Intelligence is used to pair these patterns with those associated with AD and other forms of dementia or motor impairment. Manusneuro is currently conducting clinical trials with 200 patients with early-stage AD. The final stage of the trial process will be to engage with 100 people living with AD, and their families, to assess its suitability in differential diagnoses of dementia and their management. Rutger Zietsma, chief executive of Manusneuro said: “The device and its software picks up on movement and execution planning abnormalities, which can have underlying motor or cognitive problems and quantifies tremors, slowness and lack of accuracy which are presented to the user as digital biomarkers. “Secondly, it uses Artificial Intelligence to distinguish between different movement and cognitive disorders with very similar symptoms. “It can provide a quick test for anyone worried about movement abnormalities or tremors. The test can hopefully reassure the person that that there’s no concerning problem, or it can confirm for them that the symptoms are likely to be pathological and, on that basis, they can be referred to a specialist for further assessment.” Zietsma said that his company plans to market the device to health authorities and private clinics in the UK and overseas as well as American walk-in test centres. He said: “We will access primary and secondary care clinical markets here in the UK and in the EU and US. There is also a consumer market segment in the US, where patients visit a pharma retail walk-in clinic, where they can immediately do the test.” The Manusneuro team currently numbers seven and there are plans for rapid expansion of the company, with employment of customer support, marketing, and sales teams over the next three years. Ivor Campbell, managing director of Snedden Campbell, a Stirlingshire based recruitment company that will lead the recruitment drive, said: “This is a hugely exciting story for the Scottish medical technology industry. “It holds out the prospect of technology, born and developed in Scotland, being a world leader in the early detection of Alzheimer’s.

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