HealthInvestor December 2020

HealthInvestor UK December 2020 vol 17 • no 9

essential reading for the healthcare business

Virtual reality Is health and care finally embracing technology?

Tender feelings Has Covid-19 damaged trust in public-private partnerships?

Up to the test Diagnostics sector reacts to surge in demand

Vote of confidence Octopus makes £100m care home investment

primary care • secondary care • social care • IT • infrastructure • markets • policy ISSN 1742-884X

WE ARE DELIGHTED TO ANNOUNCE OUR K N I G H T F R A N K H E A LT H C A R E H E R O AWA R D S

Covid-19 has shone a spotlight on how we depend on both the NHS and the social care sector to protect us and our loved ones, especially the elderly and vulnerable. The social care sector has long been considered the ‘Cinderella’ of healthcare but it is now being rightly appreciated, alongside the NHS. We spoke to UK care home operators and asked who they’d like us to honour as part of our Healthcare Hero Awards. We hope you enjoy reading their stories which are truly inspiring.

To meet our heroes visit: publications.knightfrank.com/healthcare-heroes

Julian Evans, FRICS Head of Healthcare at Knight Frank

UP FRONT

MANAGING DIRECTOR Vernon Baxter – +44 (0) 20 7104 2001 vernon.baxter@investorpublishing.co.uk HEAD OF DIGITAL TRANSFORMATION Sarah Hyman – +44 (0) 20 7104 2008 sarah.hyman@investorpublishing.co.uk REPORTER AND SUBEDITOR Charles Wheeldon – +44 (0) 20 3762 2556 charles.wheeldon@investorpublishing.co.uk SALES MANAGER Grace Mackintosh – +44 (0) 20 7451 7067 grace.mackintosh@investorpublishing.co.uk SENIOR EVENTS MANAGER Nicola Jones – +44 (0) 20 3746 2613 nicola.jones@investorpublishing.co.uk EVENTS MANAGER Gabriele Gineviciute – +44 (0) 20 3746 2615 gabi.g@investorpublishing.co.uk MARKETING EXECUTIVE Anum Hussain – +44 (0) 20 7104 2000 anum.hussain@investorpublishing.co.uk PRODUCTION MANAGER Jeremy Harvey – +44 (0) 20 7451 7053 jeremy.harvey@investorpublishing.co.uk DESIGN & PRODUCTION EXECUTIVE Craig Williams – +44 (0) 20 3762 2254 craig.williams@investorpublishing.co.uk PUBLISHER Harry Hyman FOLLOW US ON TWITTER @HealthInvestor

HealthInvestor is published 10 times a year by Investor Publishing Limited, Greener House, 66-68 Haymarket, London, SW1Y 4RF. The content of HealthInvestor is for your general information and use and is not intended to address your particular requirements. In particular the content does not constitute, nor does it purport or intend to constitute any form of advice, recommendation, representation, endorsement, promotion or arrangement by HealthInvestor Ltd and is not intended to be relied upon by readers in making (or refraining from making) any specific investment or other decisions. Appropriate independent advice should be obtained before making any such decision. Any agreement made between you and any third party named or otherwise referred to in the HealthInvestor publication is at your sole risk and responsibility. Any information published in HealthInvestor may have ceased to be current by the time you read it. Those responsible for the publication of HealthInvestor and/or the authors of articles contained therein may on occasion have an interest in the shares or options, futures or contracts for differences relating to shares in companies referred to in the publication. Such interests are disclosed on an issue by issue basis to the extent required under the Financial Services and Markets Act 2000 (Financial Promotions) Order 2001.HealthInvestor is a trademark of Investor Publishing Limited © Investor Publishing Limited 2020

Heads in the cloud

H

ealthcare’s relationship with technology is complicated, to say the least. With virtually every health system globally facing challenges around soaring demand, scarce resources and the increasing burden of chronic conditions, technology is often cited as the only realistic

and other productivity platforms all existed before March this year – but they have been dragged from the fringes and thrust centre stage over the course of the pandemic.

This shift in our relationship with technology is starting to manifest itself in investor behaviour also – just look at our news

short, a risk that is more likely to get you removed than rewarded.

In 2020, however, the world changed in many ways – in fact, it is still changing.

The coronavirus pandemic has vastly accelerated our use of technology. Trends such as video calls, remote working, teams communicating through instant messaging

where radical change is not only possible but, in fact, probable. Who knows what the next decade will hold for the relationship between technology and healthcare – but it will certainly be exciting to watch. n

way to square the circle. Continuing with existing care models and cost structures for the long term is simply unfeasible – and that’s even before we consider the impact of Covid-19 and the future threats of novel viruses.

In short, in healthcare we need to witness the same degree of digital revolution that we’ve seen in retail, personal finance, entertainment and many other aspects of our lives. The sector has been stubbornly resistant to change, however. Large IT projects have often been associated with failure, rather than innovation – a millstone, not an enabler. In

section this month to see how much activity there has been in the healthtech space. It is also apparent from the current generation of entrepreneurs featured in this edition of HealthInvestor UK that digital has the potential not only to disrupt the sector but to create significant value for shareholders.

Many of these businesses are focused on areas that have been long-tipped for growth – diagnostics, data, virtual consultations.

However as one participant at our (virtual) HealthInvestor Summit recently remarked: “UK healthcare has seen 10 years change in the past 10 months” and this has created a climate

Vernon Baxter, managing director, HealthInvestor UK

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HealthInvestor UK • December 2020

UP FRONT

Healthtech

news Politics and policy

6

Clinical services

6

Social care

7-10

Real estate

11-12

Medical technology

12-15

Staffing services

15

Veterinary

16

Research

16

Public-private partnerships

Is partnership working in the NHS under threat post-Covid?

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Medicine’s front line 24 Former Green beret commando, intensive care doctor and healthtech entrepreneur Dr Matt Wilson, talks to Simon Williams about his medical research and data start-up uMed

Healthtech

Up to the test Founded in June, biotech firm Salient Bio has hit the ground running with what it believes to be the fastest-ever mass scale Covid-19 diagnostics platform, as HealthInvestor UK reports

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Healthtech Healthcare services

Tech enabled care 28 Zillah Moore, director at Tunstall Healthcare, discusses why local government and the NHS should invest in medical technology to improve services, and safeguard them for the future

HealthInvestor UK • December 2020

The Covid-19 transport challenge 30 Patient transport company ERS Medical has created a digital tool for transport resource modelling in an industry first. HealthInvestor UK reports

finance Deals

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NEWS

Politics and policy

Two-thirds of private hospital capacity unused by NHS Two-thirds of the private sector capacity block-purchased by the NHS at a cost of hundreds of millions of pounds, went unused over the summer, according to HSJ, quoting unnamed sources.

Since the beginning of the Covid-19 pandemic, the NHS booked block contracts for almost all the private hospital capacity in England, estimated to have cost up

to £400 million a month.

These contracts enabled staff and equipment to be borrowed

by NHS hospitals to cater for anticipated demand from Covid-19 patients, with private hospitals on standby in case NHS facilities were overwhelmed.

From June, the NHS sought to use the private hospitals for large amounts of planned non-Covid

treatments, but this was a failure due to poor communication, confusion about how to use the contracted capacity, and NHS trusts being slow to restart elective programmes after the first Covid-19 peak.

In a statement the Independent Healthcare Provider Network said: “Where utilisation by the local NHS has been poor, independent

sector providers have proactively raised that with those systems and where needed up through the regional and national NHS England teams.”

It said private providers hit or exceeded the NHS’s “vast majority of activity expectations”.

The bulk of the contracts were given to Spire Healthcare and Circle Health.

Clinical services

H2 Equity Partners to acquire Optegra Ophthalmology Group

Optimism Health Group acquires eye care and hearing care business

London-based investment firm H2 Equity Partners is acquiring panEuropean ophthalmology group Optegra International in a deal expected to complete early next year.

Optegra operates 23 eye hospitals across the UK, the Czech Republic and Poland, providing a range of critical eye-care services including cataract surgeries, age-related macular degeneration, and vision correction procedures. The business provides eye-care to publicly funded national healthcare systems such as the NHS, as well as to self-pay patients.

Healthcare investment business Optimism Health Group has acquired Outside Clinic, a domiciliary eye care and hearing care business, which carries out more than 100,000 eye and hearing tests annually.

Henry Pitman, chairman of Optimism Health Group said: “Outside Clinic has established a reputation for providing the highestquality eye tests and hearing tests in older people’s homes. This business, which already operates nationally, has the potential to expand both in the UK and mainland Europe, providing ‘at home’ services not only to older people, who struggle to get to a high street optician, but also to an increasing number of people from other demographics who prefer to see an optometrist or adiologist in the comfort of their own home.”

Optimism Health Group stated it intends to make further acquisitions of eye care and hearing care sector businesses, and others which provide clinical services in older people’s homes.

Damian Kenning, founder of Outside Clinic, said: “Over 33 years we have built Outside Clinic

The group has a top-three market position in each of the countries in which it operates and says it has well invested facilities with ample capacity to support future growth.

Optegra stated that following the investment, its management team led by chief executive Dr Peter Byloos will work closely with H2 to deliver an ambitious growth strategy.

H2 Equity Partners Fund V was launched in February 2017 and makes investments in the UK, Ireland and Benelux. Optegra is Fund V’s ninth investment.

Dr Peter Byloos, chief executive, Optegra

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to become a substantial national provider of domiciliary eye and hearing tests, with the very highest clinical standards. I am pleased that Optimism Health Group plans to continue the development of this first-class business to create a substantial group focused on the fast-growing domiciliary and home healthcare sector.”

Hazlewoods provided buyside advisory services including financial due diligence and debt advisory. Simmonds & Simmonds provided legal advice to Optimism Health Group, and bank debt was provided by Shawbrook Bank.

HealthInvestor UK • December 2020

NEWS

Social care

Octopus Real Estate pays £100m for eight care homes Real estate lender and investor Octopus Real Estate is acquiring eight new care homes from developer, LNT Care Developments, for more than £100 million.

In one of its biggest portfolio purchases to date, Octopus Healthcare Fund, managed by Octopus Real Estate, is acquiring five of the homes at practical completion and will forward fund construction of the remaining three homes over their 12-month build periods.

The eight homes are located in Wombourne, Nottingham, Wakefield, Cannock, Kidderminster, Swadl i ncote, Redd itc h a nd Salisbury, and will all provide full en suite wetrooms and facilities.

Once complete, seven care homes will be let to Ideal Carehomes and one to Elmfield Care, each on a 35year lease. Ideal Carehomes is an existing Octopus Real Estate tenant, while Elmfield is a new ‘LNT care partnership’ operator formed by LNT with Elmfield’s directors.

Estate agent Knight Frank acted as selling agent for LNT Care Developments.

Chris Wishart, director of origination at Octopus Real Estate,

said: “We are pleased to be working again with LNT, a developer with specialist knowledge in the sector, and of course with Ideal Carehomes, an experienced quality operator. Extending our relationship with both parties, in addition to Elmfield Care, is a key step in executing our strategy of funding modern care homes with robust fundamentals.”

Dermot Callinan, group director of LNT Care Developments, added: “We pride ourselves on using the LNT Way to find the best sites

with continuously evolving build design to create efficiencies in the operational model, which in turn ensures high levels of profitability and regulatory compliance, as well as a homely quality care environment. We are pleased to have worked with Octopus Real Estate on a successful outcome and look forward to continuing our strong track record of care home development with a substantial number of sites in the pipeline.”

Nick Kempster, healthcare agency and development at Knight

Frank, commented: “We are seeing an increased flight to quality from operators and investors within the elderly care sector, particularly as the pandemic has highlighted the undersupply of future-proofed assets and the need for further development within the sector. LNT leads the way in providing top-ofthe-range facilities and innovation with their developments, and we were pleased to advise them on the sale of the portfolio and facilitate a successful outcome for both vendor and purchaser.”

City and County Healthcare Group acquires Interserve Healthcare City & County Healthcare has acquired complex care business Interserve Healthcare from Interserve Group, including its service delivery brands Advantage Healthcare and Strand Nursing.

Interserve Healthcare provides specialist care for adults and children living with a wide range of conditions in their own homes. It also provides a small amount of elderly homecare and agency services.

Based in Telford, Interserve Healthcare manages care packages for customers across England, Scotland and Wales. As well as

HealthInvestor UK • December 2020

services commissioned by clinical commissioning groups, Interserve delivers a combination of selffunded, insurance-funded and casemanaged care services.

In a statement City & County Healthcare said Interserve Healthcare fits with its strategy to acquire community care businesses to which it can add financial and technical resources to help growth.

Interserve Healthcare adds to City & County Healthcare’s existing complex care brands ICCM, SCP Complex and Total Community Care.

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NEWS

Social care

Civitas acquires complex needs provider Cream Care Group Civitas Investment Management, an impact investor acting on behalf of institutions around the world, has acquired Cream Care Group, which provides person-centred care for people with special needs in its five homes.

Taunton-headquartered Cream Care cares for people with complex needs who require a tremendous amount of care and support. The people their services provide a home for often have severe or profound learning disabilities and high care needs.

Connell Consulting supplied investor commercial due diligence.

Grant Thornton provided a multiservice offering and hands-on support throughout the transaction.

Kingsley Healthcare opens new £12m luxury care home in Brackley Kingsley Healthcare has opened a new £12 million luxury care home in Brackley, Northamptonshire, its 31st home, which features en suite bedrooms, a cinema room, library, café, hairdressing salon, lounges and conservatory, and outside spaces including a sensory garden.

The home was designed by

Leamington Spa-based Rickett Architects and built by Coventrybased Deeley Con st r uc t ion.

It wa s o p e n e d b y S o ut h Northamptonshire MP Andrea Leadsom a nd t he Mayor of Brackley, Councellor Christopher Cartmell.

Home manager Sheena Croston said: “I am thrilled by the positive

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feedback I have had from everyone who has visited the home. Once Covid has gone away, we will be eager to build even stronger relationships with local groups and organisations and invite them into the home. It is important for us and our future residents that the home becomes a central part of the community.”

Kingsley Healthcare’s new luxury care home in Brackley

Muj Malik, Kingsley’s chief investment officer, added: “We are looking forward to serving the community of Brackley. The home will be a great anchor for us to grow in the Midlands. I am incredibly proud of our team who have got the home ready to welcome our first residents at such a difficult time.”

Brackley Care Home is one of a pipeline of next-generation nursing homes Kingsley is rolling out across the country, with the next ones opening in Olney in Buckinghamshire.

Daya Thayan, chief executive of Kingsley: “We are proud to be a family-owned company and have jealously guarded our family values as we have grown. Every one of our homes has to be of a standard that we would want for our own family. In addition to providing luxury care facilities, Brack ley Care Home is also delivering well-paid jobs.

HealthInvestor UK • December 2020

NEWS

Social care

Eden Futures announces 2021 developments Social care provider Eden Futures has revealed its development plans for next year, after opened three additional supported living services in 2020.

Eden Futues has supported adults with learning disabilities, challenging behaviour, enduring mental ill health and autism across northern England and the Midlands for the past 25 years. The company stated that the Covid-19 pandemic has delayed its project development, but in the next 12 months it will build and open nearly 70 apartments and specialist bungalows.

David Whittock, director of service development at Eden Futures said: “As with other organisations, we’re having to adapt to the pandemic, accepting that it is here to stay for some time.

Despite this challenging national situation, there remains a need for more specialist supported living services to be built in communities.

“To date we’ve helped some 652 people across 171 sites to live in their own home in the community, working alongside them and their relatives in collaboration with developers, commissioners, landlords and health professionals.

“We currently have six schemes

Artist’s impression of the new Newark service

under construction in Hull, Derby, Chesterfield and Newark, and are discussing new sites in Leeds with local authorities and housing providers. Across these seven locations we’ll be creating more than 200 full-time jobs.”

Eden Fut u res’ t wo Hu l l developments, which are due for completion towards the end of January, includes 13 apartments

and eight specialist bungalows. In Chesterfield six apartments and six specialist bungalows are being constructed, while in Newark, 12 apartments and four specialist bungalows are being built, for people who require physical adaptions with built-in assistive technology, with a due date of autumn next year.

Whittock added: “Our ongoing

investment is important so that people with learning disabilities, mental ill-health and autism can live in appropriate settings and receive the care and support they need. We continue to work closely with the NHS, developers, and registered housing providers to achieve this, to meet growing demand and reduce the number of people detained in unsuitable accommodation.”

Frogmore borrows £26.3m from OakNorth for Westminster care home O a k No r t h B a n k h a s l e n t £26.3 million to real estate investment manager Frogmore t o de ve lo p a 3 5 - b e d r o o m specialist dementia care home in Westminster.

This is the second of four sp ec ia l i st c a re home s t hat Frogmore is developing alongside specialist operator Loveday. The first care home, Chelsea Court Place, is open, fully operational, and currently at 100% capacity with a waiting list.

HealthInvestor UK • December 2020

Frog mor e h a s t wo mor e central London care homes in the pipeline. The company says all its homes have luxury facilities such as a cinema and library room, a spa and private dining room, with significantly more staff per resident than the industry norm.

Frogmore’s chief operating officer and group treasurer Andy Rogers said: “Over the last 15 years, the percentage of people diagnosed with dementia in Westminster has increased

by 32%, yet despite this, the borough has the second-lowest number of registered beds for dementia, with only three beds for every 100 patients. There is therefore a clear need for new specialist dementia care homes in the borough which is why we’re delighted to be breaking ground on this new project and are grateful to OakNorth Bank’s ongoing support.”

Damien Hughes, senior property finance director at OakNorth,

added: “We’ve now worked with the team at Frogmore on several projects and despite care homes being a new area for the business, it has already proven with its first site in Chelsea Court Place, that it has a clear understanding of what members and their families are looking for. Frogmore’s chosen partner for this portfolio, Loveday, has enviable experience in this area, and together, they’re building a strong portfolio offering invaluable support to those they care for.”

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NEWS

Social care

Schroders and Civitas Investment Management’s fund announces first completions The first five projects funded by the Social Supported Housing Fund (SoHo), set up by Schroder Real Estate and Civitas Investment Management (CIM), have been completed and handed over to their housing association tenants and residents.

These two companies stated that they have many more contracted UK projects, with developments completing every month.

The SoHo fund held a second closing in September taking the total equity capital raised to £100 million.

The strategy of the SoHo fund is to forward-fund the development of around 2,000 UK homes, creating an institutional portfolio of new purpose-built specialist housing

units that provide safe, lifelong homes for adults with severe learning disabilities and significant mental health conditions.

Prior to investment by the fund, the sites will already have planning consent and be pre-let on long-term leases. The rental obligations are 100% funded by the local authorities in which the residents are located and are ultimately paid by the UK central government as part of its statutory obligation under The Care Act 2014.

CIM, the impact investment manager which founded and also acts as investment advisor to Civitas Social Housing REIT, is overseeing the development of the properties.

Robin Hubbard, head of real

estate capital at Schroders, said: “It is very pleasing to see the fund’s strategy become a reality with the completion, delivery and occupation of the first set of purpose-built homes. They will enhance their residents’ quality of life significantly, and their social impact will be independently measured and reported. “‘Additionality’ is an important aspect of the fund and, with our now-proven ability to successfully industrialise the development

process in a timely and cost-effective manner for the public sector, while seeking to achieve an attractive riskadjusted return for investors, we believe this is a win-win for all the stakeholders involved.”

Andrew Dawber, group director at CIM, added: “The UK has a severe shortage of specially-designed homes for working age adults with severe and complex care needs. Both the public and the private sectors have an important role to play in providing additional housing, and we are committed to doing our bit in partnership with Schroders.

“These housing projects, which were funded from last October, were a result of the collaboration b e t we e n lo c a l aut hor it ie s, developers, care providers, housing associations and SoHo. We hope that they will set the standard for proactive collaboration in creating high-quality housing for people with lifetime care needs.”

National Care Group acquires Yorkshire care home Accrington-based healthcare provider, National Care Group (NCG) has acquired Steps Residential Care in Rotherham, South Yorkshire, for £2.5 million.

Established in 1999, Steps Residential Care is a CQC registered care home for people requiring nursing or personal care for learning disabilities and physical disabilities.

It employs 58 staff members and caters for a maximum of 26 service users. The business comprises a total of 26 single bedrooms spread across five adjacent properties which each have a dining room, a lounge, a modern kitchen with a breakfast and lounge area, and outdoor space.

Steps Residential Care was sold by Anna Brown, who decided to sell in order to retire. Brown said: “Having spent a significant amount of my life dedicated to developing the services, individuals we support, and staff, I felt the time was right to hand over the baton. I spent a long time looking for an organisation which, I felt, most closely mirrored the ethos and standards I have worked

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Steps Residential Care in Rotherham

by, but could take the organisation into the next chapter. When NCG

approached me, I was pleased and comforted that Steps would be in safe hands to carry on the good work achieved over the last 22 years. I have found the NCG management and support teams attentive and professional, and I look forward to

seeing Steps continue to thrive.”

NCG provides support services

to vulnerable adults throughout the UK. The company’s group finance director, David Rowe-Bewick, said: “The acquisition of Steps Residential Care strengthens our presence in South Yorkshire and is an obvious fit with our own organisation as we

look to extend our support services to an ever-increasing number of

vulnerable people. As we look to the future, we remain focused on further expansion both from acquisitions and organic growth.”

The sale was facilitated by specialist business property advisor Christie & Co.

HealthInvestor UK • December 2020

NEWS

Real estate

McCarthy & Stone shareholders vote for £647m takeover deal American private equity firm Lone Star Funds upped its bid for Britain’s largest retirement home builder McCarthy & Stone and the shareholders have accepted.

Dallas-headquartered Lone Star offered 120p a share, up from 115p.

This now values the company at £647 million, up from £630 million for the original offer.

McCarthy & Stone said 79.94% of shareholders approved the proposal which had been recommended by the directors of the company.

In October, when the deal was announced McCarthy & Stone’s chairman Paul Lester, said: “We believe that Lone Star would provide a complementary partner for McCarthy & Stone’s stakeholders and along with

the investment in the business that Lone Star can provide, will enable further improvements of its transformation strategy and allow McCarthy & Stone to capitalise on its growing rental and multi-tenure offering.

Contracts awarded for hospital’s mental health unit Contracts have been awarded for an extension to the Sunniside Unit at the Queen Elizabeth Hospital in Gateshead.

Procured through national framework provider Pagabo’s Professional Services Framework, national project and programme management consultancy Faithful+Gould, and construction firm Morris & Spottiswood will deliver an extension to the mental health facility, which is run by Gateshead Health NHS Foundation Trust.

The project – valued at almost £1.8 million – will see Faithful+Gould provide multidisciplinary services including initial design, and Morris & Spottiswood lead on the extension’s construction.

Karen Carter, regional relationship manager for the North at Pagabo, said: “We’re delighted to have been involved in the administration of this vitally important development of the Sunniside Unit’s mental health facility – a service that will help to support members of the surrounding community for years to come.

The Sunniside Unit provides inpatient admission, assessment, treatment and discharge planning to any patient within the Gateshead area who either has a diagnosis of a functional mental health illness (over the age of 65), are presenting symptoms of acute psychiatric distress and require assessment for diagnosis, or are presenting acute

HealthInvestor UK • December 2020

psychiatric distress and are in crisis where there are risk indicators of danger to themselves or others.

Lawrence Inkster, director of Faithful+Gould, said: “Time was very much the essence on the project and our position as Pagabo’s multidisciplinary framework provider has allowed us to assemble the team to hit the ground running.

Our expertise within the healthcare sector and experienced team will help to bring to life the building’s extension and provide a space in which people feel happy, safe and supported.”

Matthew Wall, frameworks

manager at Morris & Spottiswood, added: “The turf-cutting ceremony really is a milestone moment for not only the client but the full delivery team, all of whom have shown amazing commitment to getting the project up and running in record time.

“This is our first direct award via the Pagabo framework, and it has demonstrated what a valuable and time-saving mechanism this procurement route can be when the full team commit to working collaboratively.”

Paul Swansbury, development and commercial works manager at

QE Facilities, said: “This investment into local health services, such as what is provided by The Sunniside Unit, is a testament to our commitment to support surrounding communities as much as possible with both their physical and mental health. In what has been a turbulent year for so many, it’s never been more vital to support one another and so we hope that this brand-new extension will provide hope to so many for the foreseeable future and beyond.”

Work is now under way on site, with the extension due to completed by spring.

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NEWS

Real estate

CIM and Envivo join forces to take over Heathcotes Group Civitas Investment Management (CIM), an impact investor specialising in government-backed community real estate assets, has acquired care provider Heathcotes for an undisclosed price. The transaction was undertaken in partnership with Envivo Group, a care provider in the UK residential care and supported living sectors.

As part of the transaction, CIM has acquired all the healthcare real estate assets of Heathcotes on behalf of underlying investment clients and Envivo Group has purchased the operational care business.

Founded in 2005, Heathcotes has 72 UK healthcare facilities providing specialist residential accommodation for adults and children with learning disabilities, mental health and associated

complex needs. It works with more than 50 local authorities and clinical commissioning groups.

CIM group director Tom Pridmore said: “We are delighted to have partnered with Envivo Group to announce this significant transaction, one of the largest in UK healthcare this year. The healthcare sector in which we invest is continuing to demonstrate strongly its resilience, with a service offer that is uncorrelated to the broader economy, that delivers positive social outcomes, reliable economic returns and clear value for money for the public purse. We believe that the combination of skills that we have brought together will enable Heathcotes to continue to grow successfully to meet the demand for its services whilst continuing

to place the needs of the service users and staff at the heart of its activities.”

Paul Marriner, chairman of Envivo Group added: “We are delighted to have partnered with Civitas and acquired the Heathcotes Group.

Heathcotes is a well-respected, highquality care provider, and we are looking forward to working with their management team to invest in systems and infrastructure to further enhance their quality, that enables them to achieve excellent outcomes for people that the group supports, as part of the wider Envivo family.”

Brenda n Kelly, ma nag i ng director of Heathcotes, said: “I really welcome this new chapter in the development of Heathcotes.

Envivo’s core values and focus on the best outcomes for the

Brendan Kelly, managing director of Heathcotes individuals we support, their families and our colleagues, is closely aligned with Heathcotes’ values. As we transition to new ownership, we are all looking forward to working together with the wider Envivo family over the coming months and years ahead.”

Civitas was advised on commercial due diligence by Connell Consulting.

Medical technology

HealthHero acquires digital triage provider Doctorlink

Electronic health data start-up uMed raises £3.7m

Digital health company HealthHero has acquired digital triage provider Doctorlink after global investor Eight Roads Ventures sold its stake.

Doctorlink provides care for more than 12.5 million patients in the UK across more than 1,500 GP surgeries in the NHS. London-based HealthHero operates in the UK, Ireland and Germany, providing holistic digital healthcare services. The acquisition of Doctorlink adds online triage and health risk assessment to its services.

Ranjan Singh, co-founder and chief executive of HealthHero said: “This marks an exciting step for both Doctorlink and HealthHero. By working together, we aim to create

Healthtech start-up uMed has raised £3.7 million from investors AlbionVC, Delin Ventures and Playfair Capital, as well as Silicon Valley’s 11.2 Capital.

London-based uMed’s platform automates the clinical study process, creating patient registries that combine electronic health data with data from each patient which can include genomic and biomarker samples. This automation allows all healthcare providers, from GP practices to hospitals, to participate in multiple research programmes simultaneously. uMed founder Dr Matt Wilson sa id: “O u r tec h nolog y ca n support healthcare providers in finding appropriate patients to

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the gold-standard in digital primary healthcare services by combining Doctorlink’s industry-leading tech tools with our existing platform and best-in-breed clinical operations.”

Rupert Spiegelberg, chief executive of Doctorlink, added: “I am delighted that Doctorlink will be able to take the next step of its journey within the HealthHero family of companies enabling it to offer a broader and deeper set of services to its customers and invest more in its world-beating technology platform.

“I have enjoyed every minute of what has been an incredible year for the company and believe we have found the right strategic fit for the business.”

participate in medical research, including large-scale patient registries which usually demands laborious, manual processes on top of their already complex and heavy workloads.

“As our technology is uniquely able to reach back compliantly from the electronic health record to the patients, the process for building research registries can be heavily automated. It means clinicians can focus on patient care, while patients are given the opportunity to participate in many more studies from home, with full transparency over use of their health records.”

In October last year, uMed secured almost £1 million in seed investment from Playfair Capital.

HealthInvestor UK • December 2020

NEWS

Medical technology

Kinomica secures £3.9m investment Proteomic-data science and diagnostics company Kinomica has secured £3.9 million in funding.

Growth capital investor BGF, and healthcare, science and engineering investor, Longwall Venture Partners have invested £1.5 million each.

Additional funding of £900,000 was secured via seed investors, including BioCity, Alderley Park Ventures, and Puffin Point, a family office in London.

Alderley Park, Cheshire-based Kinomica stated it will use the funding for technology that could help develop new drug treatments, notably KScan, a next-generation biomarker and molecular diagnostics platform, designed to aid the development of kinase inhibitor drugs for treating cancer patients and other conditions. It can be utilised at every stage of the drug development process, from generating novel drug targets, to investigating drug resistance and classifying patients for clinical trials. Kinomica has already secured commercial agreements with several blue-chip pharma companies including AstraZeneca.

The investment will be used to finance the rapid up-scale of operations, including facilities and equipment – to deliver a pipeline of projects. The organisation has plans to recruit a further 11 staff and two additional consultants by next June.

Jane Theaker, chief executive of Kinomica, said: “This marks a huge step forward for Kinomica and for KScan, as we look to the future of cancer treatment. Our pioneering technology offers much-needed

support for the development of new precision medicines and represents a new approach to drug trials and treatments that will have a huge impact on patients’ lives.

“We are enormously grateful to our investors for their support as we look to a new era of research and development in the battle against cancer and other disease areas where an understanding of cell signalling is important.”

Rhys Davenport of BGF’s

Northwest team, said: “Kinomica is a phenomenal example of earlystage life sciences innovation based in the Northwest. The business’s technology has the potential to provide insights to its pharma customer-base which help to identify drug targets, personalise treatments and develop diagnostics, that will transform patient outcomes. Led by chief executive Jane Theaker, the business is at a stage in its journey where this injection of capital could unlock significant growth.”

Rebecca Todd, investment director at Longwall Ventures, added: “As a specialist investor i n hea lt hca re, sc ience a nd engineering, we are proud to be backing Kinomica and delighted to welcome the company to our portfolio. We recognise the importance of the groundbreaking science behind the company and the potential of the KScan platform to improve cancer treatment, ultimately saving more lives. We look forward to supporting the company to realise its ambitions in the coming years of exciting development.”

App founded by NHS surgeon secures £1m seed investment MediShout, an app for front line hospital staff to resolve facilities and equipment issues, has closed a £1 million seed round from venture capital fund Episode 1.

The app, founded by Londonbased NHS surgeon Ash Kalraiya, connects staff, equipment suppliers and service maintenance teams. It enables front line staff to report and resolve operational issues directly and easily using the app. By using data and artificial intelligence, MediShout predicts and prioritises issues in the hospital’s facilities and

HealthInvestor UK • December 2020

equipment to ensure that patients can receive the best possible care.

Kalraiya said: “As a surgeon, I have all too often been delayed by items like lightbulbs in the theatre being broken, faulty equipment or not having the right stock when I need it. We founded MediShout to stop such frustrating issues from getting in the way of patient care.

Our ultimate vision is to use AI and digital technologies to transform our hospitals into smart-buildings that run smoothly.”

The app is currently being

Ash Kalraiya, founder of Medishout

used by six hospitals and several equipment suppliers, and with this new round of funding, the team aims to expand to more than 20 hospitals in 18 months.

Carina Namih, partner at Episode 1 Ventures said: “Hospital facilities have been left behind by digital innovation for too long. As doctors and product designers,

this team really understands how technology and AI can help front line hospital staff be more effective. We are hugely excited by the positive impact that MediShout will have.”

Law firm Shakespeare Martineau adv ised Medishout on t he investment process and terms from inception.

13

NEWS

Medical technology

FPE Capital invests in digital mental health platform Togetherall FPE Capital, a software and servicesfocused lower mid-market growth investor, has invested in Togetherall, a London-based mental health software-as-a-service platform.

The investment is the eighth from FPE Fund II. Togetherall delivers 24/7, clinically moderated support to low acuity users via its SaaSdelivered platform. The business has established a position in higher education and is expanding into the corporate and public health sectors.

In the past 12 months the platform has supported over 85,000 members across its key markets in the UK, the US and Canada.

London-headquartered FPE’s investment is largely into primary funding to support Togetherall’s

Henry Jones, chief executive, Togetherall

growth in North America.

David Barbour, managing partner at FPE, said: “FPE is delighted to have completed this growth investment into Togetherall. Our expertise is focused on investing in

high-quality companies operating in large markets where we can support the team in their growth ambitions.”

Henry Jones, chief executive of Togetherall, added: “We are excited to be partnering with experienced

technology investors in FPE. Their experience in SaaS really sets them apart, and we are pleased to have them on board as we accelerate our growth into North America.”

FPE joins LGT IVUK as investors in Togetherall and FPE’s investment will make it the largest shareholder in the business. Henry Sallitt and Llewellyn John will join the board on completion.

FPE was advised on the transaction by Stephenson Harwood (legal), Luminii Consulting (commercial), Dow Schofield Watts (financial and tax), Intechnica (technical due diligence), and Continuum Ventures (management). Togetherall was advised by EY Corporate Finance and Taylor Vinters.

Start Codon closes new £15m venture for life science innovation Start Codon, a life science and healthcare business accelerator based in Cambridge, has closed Start Codon Fund I LP at £15 million. The fund will be used to support Start Codon’s offering to start-ups, which includes a minimum of £250,000 seed funding, business support services, expert guidance, and access to office and lab facilities.

Limited partner investors in the fund include Novartis International and Cambridge Innovation Capital.

In addition to its investment in the fund, Novartis will work with Start Codon and its founders to select technologies and entrepreneurs to join the Start Codon business acceleration programme, which aims to translate early-stage research into successful companies, ready for funding and partnership.

Novartis will also provide support and mentoring to the founders

14

Dr Jason Mellad, co-founder and chief executive at Start Codon of the start-up companies, and opportunities for partnering as their research evolves.

Founded in 2019 with investment and support from Genentech, a member of the Roche Group, Cambridge Innovation Capital, the Babraham Research Campus through Babraham Bioscience

Technologies, Dr Jonathan Milner and Dr Ian Tomlinson, Start Codon plans to invest in and support up to 50 start-up companies over the next five years. Start Codon showcased its first cohort of companies in June and recently enrolled its second cohort of start-ups.

Dr Michael Anstey, partner at Cambridge Innovation Capital, said: “This venture fund will prov ide star t-ups w it h t he opportunity to kick-start their development and will bring novel and in novat ive ideas to commercialisation. We are delighted to have supported Start Codon since its inception and are excited to see it act as an important facilitator in creating success Dr Jason Mellad, co-founder and chief executive at Start Codon, said: “This venture fund is part of our strategy to provide our entrepreneurs wit h t he

funding they need for start-up costs, such as in-licencing of IP, recruitment, and proof of concept studies. In addition, we provide the opportunity to network and learn from the most successful industry leaders in our sector.

With both Genentech and Novartis on board to support our cohort companies in their development, a nd potent ially provide opportunities for commercial partnerships in the future, we are extremely well-positioned to nurture and commercialise the next generation of world-class healthcare companies, which we hope will positively impact many patients’ lives.”

Start Codon is accept i ng applications for its next cohort of companies and early-stage startup companies in the life sciences and healthcare space are invited to apply.

HealthInvestor UK • December 2020

NEWS

Medical technology

Ieso Digital Health appoints chief clinical officer Ieso Digital Health, a digital health company specialising in internet-enabled, evidence-based psychological therapies, has appointed Stephen Freer as chief clinical officer, succeeding Sarah Bateup who becomes chair of Ieso’s clinical advisory board and a clinical consultant.

Freer will be responsible for providing clinical governance, quality and patient safety across the organisation, and for mental health treatments and products.

Freer joined Ieso in 2016 as clinical lead, having previously worked with the organisation as a clinical affiliate cognitive behavioural therapy (CBT) therapist in 2014.

He has since worked in several senior clinical leadership roles, most recently as clinical director.

Over the past six years, Freer has worked collaboratively with the clinical and product teams and in close partnership with Bateup.

He has been central in managing the response to spikes in demand for mental health services during the Covid-19 pandemic.

Beyond Ieso, Freer has held

Stephen Freer, chief clinical officer, Ieso Digital Health

senior clinical positions within the healthcare sector including directing his own private practice, South West

CBT, and leading clinical operations at Somerset Partnership NHS Foundation Trust. He was also an associate lecturer at the University of Exeter.

Nigel Pitchford, chief executive at Ieso, said: “Stephen is welpositioned to take on the role as our new CCO; his unique clinical insight, combined with his commercial and operational experience, has already proven invaluable to the company in his prior roles. He has witnessed first-hand the benefits that patients receive from psychotherapy, as well

as the challenges they face within the current mental healthcare system.

No doubt, the Covid-19 pandemic

has given rise to many additional threats to mental wellbeing and Stephen will continue to move forward our mission of delivering world-class mental treatments to those who need it.”

Freer added: “Joining Ieso was the best decision I’ve made in my career. I have long been an advocate for the adoption of digital therapies and services alongside traditional models of care to provide patients with improved access and choice. The clinical data insights and quality assurance that online

talking therapies offers allows us to continually learn what works for whom and adapt to provide therapists with the best advice, support and clinical tools to treat patients in the most effective way. Quite honestly, it’s groundbreaking!

“Clinical outcomes for patients experiencing common mental health problems, such as anxiety and depression, have remained around the 50% mark for well over 10 years which is an unacceptable rate in any area of healthcare. We are seeing that more traditional models of a one-size-fits-all approach aren’t allowing services to break through this barrier, and we are investing our efforts in our therapist network to raise and push beyond this current accepted standard of care.”

Working with 45% of the UK’s clinical commissioning groups and more than 27 NHS providers, Ieso provides an online CBT service for mental health patients. The company says it aims to expand on its clinical network of 650 NHS and private therapists across the UK.

Staffing services

MCG Group acquires Poppy Nursing and Care Services The MCG Group has acquired Ipswich-based Poppy Nursing and Care Services, a supplier of nurses and carers to hospital trusts and care homes across Suffolk, Norfolk, Essex and the wider UK. The MCG Group, which has rebranded from McGinley Group, is a collection of companies providing services in the aerospace and aviation, construction, education, healthcare and technology sectors.

The acquisition of Poppy Nursing and Care complements MGG’s healthcare recruitment brand, MCG Healthcare, which specialises in placing primary and secondary care professionals, including

HealthInvestor UK • December 2020

nursing, doctors and allied health professionals into public and private sector healthcare settings.

Colm McGinley, chief executive of The MCG Group, said: “This is our first healthcare acquisition and will further strengthen our group, building on the start we have already made in the healthcare market. Whilst we continue to grow organically, this further supports our five-year growth plans and our vision to be recognised as a group of companies people love to work for and with.”

Ash Higgs, director of MCG Healthcare, added: “It was clear from the outset that both our work

cultures and our focus on quality care align. With our existing presence in mainly the North and South of England, and Poppy Nursing and Care Services predominantly supporting the Southeast, there is already great potential to maximise and align the regional strengths of both operations.”

Claire Woodman, Poppy Nursing and Care Services’ managing director said: “While it’s a difficult decision to sell a business that you’ve worked so hard to build, it was evident from the outset that our two businesses had a clear synergy.

I look forward to the transition of our business into The MCG Group

and ensuring the continuation of great service to our clients.”

Kelly-Anne Byres, Poppy Nursing and Care Services’ finance director, added: “We’re confident that The MCG Group is a great fit for our business. Their focus on people really stood out to us, as did their commitment to excellence, assuring us that the quality line we’ve worked so hard to build, will continue into the new ownership.”

Poppy Nursing and Care Services retain its branding and trading name, working alongside MCG Healthcare. Over time, The MCG Group says it plans to merge the brand into MCG Healthcare.

15

NEWS

Veterinary

Pets at Home Group acquires The Vet Connection Pet care business Pets at Home Group has acquired The Vet Con nec t ion (T VC), a la rge independent veterinary telehealth firm providing round-the-clock veterinary telehealth advice, triage and ancillary services to customers via remote phone, web chat and video consultations.

Founded in 2002, TVC stated it conducts more than 90,000 consults annually. Operating predominantly through business-to-business relationships, TVC partners with pet insurers, veterinary practices, retailers, charities and animal pharmaceutical companies in the UK and overseas to provide telehealth services for their end

customers via a white-label service. The company also has a subscription-based direct-toconsumer service, PetGP.

Lincoln International acted as exclusive financial advisor to TVC. Mat t hew L e e, m a n ag i ng director at Lincoln International,

said: “Covid-19 has demonstrated a growing need for telehealth offerings, whether direct-toconsumer or in support of insurance or other business-tobusiness pet channel partners.

Telehealth’s role in providing pet owners with flexible on-demand access to veterinary care and advice, alongside traditional physical practice, is clear and is only going to accelerate from here. Pets at Home recognised this trend and saw the synergies from bringing TVC into their pet care ecosystem, to create their own in-house platform and enhance both their retail and veterinary offerings.”

Research

Jefferies report signals optimism for healthcare Investment bank Jefferies has published its third annual Jefferies Healthcare Temperature Check providing feedback from 500 healthcare senior leaders, including major investors and chief executives.

Key findings include: z A rebound of M&A is anticipated by investors and corporates alike in 2021, with 64% of all respondents expecting it to be higher in the next year. Corporate M&A is expected to be the most prominent type of deal, with private equity also active z The majority of respondents expect healthcare stocks to increase in value over the next 12 months, with nearly half also anticipating a recovery in broader markets z Vaccines are seen to be a key area of innovation moving into 2021, and are anticipated to have a major impact next year.

The prospect of a Covid-19 vaccine is believed to be one of the current reasons for the

16

outperformance of healthcare stocks z While North America continues to be identified as having the greatest potential for value creation, China is also rising up the agenda this year, with almost a third identifying it as a region of strong potential value moving into 2021 z 2020 has seen an evolution of the threats facing the sector.

Economic recession and Covid-19 disruption are high on the agenda, displacing political uncertainty and pricing pressure as the greatest perceived risk factors.

Tommy Erdei, Jefferies’ joint global head and European head of healthcare investment banking, said: “There is no doubt that healthcare will play a pivotal role in the recovery and rebuild from Covid-19 and this is reflected in both some of the confidence we have found, and challenges identified.

At a high level, it is certainly

Tommy Erdei, Jefferies’ joint global head and European head of healthcare investment banking

encouraging to see significant optimism of a strong recovery as we move into next year. While volatility will continue, many are predicting that both healthcare stocks and broader markets will rise from current levels by this time in 2021 and noticeably few are anticipating declines from where we are now.

I am also pleased to see strong

anticipation of an M&A rebound in 2021; confidence in increased M&A activity in the coming 12 months is at its highest level since we started this report.

2020 has been a year that nobody could have predicted, but I am heartened to see such a strong level of confidence in the outlook for our sector.”

HealthInvestor UK • December 2020

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EducationInvestor Global

PUBLIC-PRIVATE PARTNERSHIPS

Is partnership working in the NHS under threat post-Covid?

T

he National Audit Office has concluded that, despite the exceptional circumstances in dealing with Covid-19, “standards of transparency” had not been “consistently met” in the way private sector contracts were awarded during the first wave of the pandemic.

Independent providers of health and care services to the NHS and local authorities have spent many years building partnerships, shared processes and trust to provide high-quality services to health systems, their patients and staff.

What impact has the past six months had on those relationships? As we emerge next spring – and the hard work of rebuilding not just our health system but our whole economy begins – will we look back and think it has been a positive catalyst for greater cross-sector partnerships? Or do some of the crisis manoeuvres we have seen pose a longer-term threat to the very notion of partnership?

Opinion among service commissioners seems to be split.

While some view the crisis as a unique situation bringing opportunities for new types of conversation with external parties, others have adopted more of a siege mentality during Covid-19 and are unresponsive.

Rightly so, there has been plenty of reporting and public conversation about the heroic response of NHS front line staff

18

to Covid-19. However, there has been far less recognition of the contribution from other parts of the system – the unsung heroes who ensure that the most vulnerable people still receive community support; that people are being discharged safely and efficiently back home or to other care settings; or the independent providers who signed up to a block contract to backfill NHS care in a bid to support the front line Covid-19 effort.

ZPB brought together a group of senior leaders in the independent health and care sector – from community services to acute providers, outsourcing giants and staffing providers – to discuss some of these issues. By collecting these experiences during this critical period, we hope to highlight future challenges and the unintended consequences of the UK’s response to Covid-19 as well as to share ideas on how these challenges could be addressed.

The following shifts and trends were identified by the service providers as consequences of the health and care sector tackling the pandemic: z The impact on public services has meant that provider interactions with commissioners have changed significantly. While this is inevitable during a time of crisis, there is widespread concern that the

HealthInvestor UK • December 2020

PUBLIC-PRIVATE PARTNERSHIPS

z

z

z

demonstrable value of integrated partnership working between the NHS and independent sector is now at risk of being undermined – not just now but for the future.

Independent service providers have been mobilised to tackle the pandemic, from staffing testing stations to plugging gaps in care for vulnerable groups. However, there’s been a shift towards commissioners procuring many of these services in a way that is not sustainable for providers in the long term. This shift is mirrored for healthtech and digital providers. While expediency is understandable during a crisis phase, urgent consideration needs to be given to reassessing these arrangements in a way that is mutually affordable.

Partners and suppliers to the NHS have a dichotomous view on how the future of NHS-industry partnerships will emerge from this year: — Concrete steps being taken to create a genuinely integrated service, wherein each component focuses on its strengths; or — The NHS becoming a deified structure increasingly resistant to exploring outside partnerships, having become more ‘closed’ to cope with Covid-19.

Spending is another area where there seems to be a polarisation of attitudes among commissioners. This ranges from eagerness to introduce new initiatives now, while there is less scrutiny of spending due to the immediate pressures of Covid-19, through to – at the other end of the scale – extreme caution about committing to anything new for fear of scrutiny of overspend post-Covid.

Clearly-defined areas such as sexual health services are held up as an example of good practice.

Free thinking is the most important common factor in those who engage in constructive dialogue with independent providers. There are some real innovators in the NHS, particularly among trusts embracing technology. Likewise, there are some exemplars in service delivery. These include an initiative currently being delivered by an independent provider on behalf of the NHS to transfer elderly dermatology patients from acute to primary care. Refreshingly, it is based on collaborative working between primary care networks, community trusts and acute trusts. In these instances, it’s usually force of personality that drives change rather than the system.

Independent providers have a willing role to play in ensuring good procurement that can happen at pace. They can work with government to help define this, based on providing the right services for the right population at the right time. In this way, we can have a system fit for the future.

ZPB’s take on partnership is that successful working with the NHS has to bring a quadruple win – for patients and the public, for the health and social care system, for providers and for taxpayers. This can be achieved only if combined public and private services are fairly and effectively mobilised. n

By Zoe Bedford, chief executive, ZPB Associates – zoe.bedford@zpb-associates.com & Lauren Saldanha, account director, ZPB Associates – lauren.saldanha@zpb-associates.com

How should the future look? z

z

First and foremost, acceptance is needed that external partners can help to address unmet needs. When the NHS accepts where it needs support (for example with technology), it takes a more open approach to partnerships and there is a willingness to look outside the NHS to plug those gaps. Where there are shortfalls – or at times failure – in what is deemed to be more ‘core’ business for the NHS, such as the provision of key services like patient discharge, there can be a reluctance to seek outside help and support. Will the NHS ever look for new ways of doing old things or will it just continue to do old things the old way, albeit with a few modifications based on ‘lessons learned’?

There seems to be a degree of ‘bunker mentality’ among some NHS managers whose reaction to proposed support – in managing patient flow for example – is that, having coped thus far through Covid-19, they can manage on their own.

More cross-learning is needed between the two different commissioning systems – the NHS and local authorities. Independent service providers often feel they have more impact at a local level when working with local authorities, who know and understand their own population needs down to the postcode enabling them to move forward with delivery as equal partners.

HealthInvestor UK • December 2020

About ZPB Associates ZPB Associates is an independent health specialist consultancy providing a mix of organisational strategy consultancy (market, customer and audience mapping/profiling, stakeholder engagement, councils/expert panels, thought leadership) and marketing and communications (policy communications, PR, and creative services).

It was founded 10 years ago in the belief that there had to be a better, more effective way of building partnerships that drive better value across the healthcare system. The client base is diverse and ranges from healthcare providers, to pharma & life sciences and technology companies to not-for-profits.

The team is highly networked within the health sector and has a particular emphasis on combining senior-led strategic programming with bringing new insights through strong understanding of health system dynamics and data, in order to deliver high-impact campaigns with real impact.

19

HEALTHTECH

Up to the test Founded in June, biotech firm Salient Bio has hit the ground running with what it believes to be the fastest-ever mass scale Covid-19 diagnostics platform, as HealthInvestor UK reports

T

his year’s global health crisis has had an immense impact on the world economy. Of course, many businesses have suffered, some have had to shut down completely, yet some have shown resilience and were able to adapt and grow, particularly tech companies. Despite this, you might not think of 2020 as the best year to launch a start-up. Nevertheless, Salient Bio did just that.

Founded in June by previous members of Imperial College London’s Biofoundry unit, biotech firm Salient Bio has hit the ground running with what it believes to be the ‘fastestever’ mass scale Covid-19 diagnostics platform, utilising top-of-the-line robotics to facilitate the development of what the co-founders have coined the ‘Lab of the 21st Century’.

20

An unlikely birth For a year and half, experts in robotics and microbiology, Marta Ciechońska and Miles Priestman, worked at a specialist unit at Imperial College London called the London Biofoundry which focuses on the commercialisation of synthetic biology and experimental biological processes.

In January this year, the Biofoundry offered to help an affiliated Chinese university as the coronavirus epidemic began to peak in China. The Biofoundry team had the insight that one of the largest issues facing centralised, automated, mass-scale diagnostics was the resilience of the supply chain.

The Chinese university asked the Biofoundry team to use its expertise to design a supply chain agnostic workflow, which

HealthInvestor UK • December 2020

HEALTHTECH

Automatable format robot

the Salient Bio we see today and proceeded to pursue their mission of making diagnostics accessible to all.

The innovative platform

has the ability to facilitate population-scale Covid-19 testing.

To achieve this, the team took state-of-the-art, modifiable robots and designed a molecular diagnostic ‘experiment’, at the same time developing software to have the robots run that experiment. After working on this for some months, the pandemic had well and truly reached the UK. Focusing efforts closer to home, the Biofoundry team’s completed platform had passed a rigorous NHS validation process with flying colours and had it fully enrolled in two hospitals that are part of the Imperial College NHS Trust.

These hospitals started using this platform, diversifying their reliance on the mainstream diagnostic machines typically used in centralised diagnostic laboratories.

It was at this point that Marta Ciechońska and Miles Priestman came to Jack Priestman, the commercial brain behind Salient Bio’s operations, as they believed this approach to diagnostics could be a commercially viable proposition.

Not only could this approach be used for mass Covid-19 testing, the team could see it having broader applications to population-scale testing of a far wider array of medical conditions. Saying goodbye to the Biofoundry and taking the leap into independence, Marta, Miles and Jack formed

HealthInvestor UK • December 2020

After this colourful history, it’s worth peeking under the hood of Salient Bio’s diagnostic platform itself. The process is completed in four stages, with robots used to automate the analysis process. Stage One is sample prep, the most manual part of the process. This involves the laboratory workers unboxing the tests and removing the swabs from the tubes.

At Stage Two, the samples are transferred in an automatable format using 3D printed hardware designed by Salient Bio. This standardises each sample for the benefit of the robots.

Stage Three involves the highly precise, liquid handling robots extracting RNA from samples ready for the polymerase chain reaction testing (PCR). Finally, at Stage Four, a series of robots prepare the plates for testing before the thermocycling PCR analysis is run. This produces results which can be sent to the customer.

So, what does this all mean in essence? When the platform is operating at its ideal state, test kits are bought by users and sent out, Salient Bio receives these throughout the day, it runs those tests through its automated workflow which, if the kits are received before 1pm, produces the results to be sent back to the customer on the same day. The team says this sounds fairly straightforward only because their automated system “really makes it that simple.”

Moreover, because the platform is open and modular, as each step in the process completes, another machine starts the second step and so on. Meanwhile, the first machine begins work on a second batch. This means the system can process multiple batches at once. This modular approach creates meaningful productivity gains overall. Salient Bio also uses high-quality PCR machines that have high temperature modulation speeds reducing the time needed for temperature changes to occur, thus expediting the thermocycling process even further. Contrastingly, in the standard closed process, one batch monopolises all machinery until it is completely processed.

21

HEALTHTECH

PCR prep robot

“Our innovative workflow means our current team of three has the same capacity as that of a 20-person team.” said Ciechońska

Funding and business model Salient Bio sought investment to get its vision off the ground.

In its initial seed round of funding, it looked for £200,000 with a view to working without salaries for the foreseeable future until the platform was up and running. However, within just three weeks, the total raised had more than doubled the original goal and the company has ultimately raised far more than this to date.

“We raised more than five times our initial seed round goal of £200,000 in just three months,” said Jack Priestman, The money received has bolstered Salient Bio’s offering.

It now have a lab, which takes up one tenth of the floor plan of its traditional counterpart, that has thousands of times the applicability in terms of the number of diseases it can test for, with a much higher throughput, not only due to the automation of the platform, but also because its input supply chain agnostic approach allows it to use supply chains that are a fraction of the cost of the norm. Consequently, this enables processing of 2,000 tests a day, though it claims it has “lots of operational contingency” above that.

When asked how Salient Bio compares to the competition, Jack remarks that, “the truth of the matter is we aren’t doing anything novel on the testing side – we aren’t inventing a new form of test – instead, what we have designed is an industrial process.” Salient Bio believes this is of immense value on the business side as it doesn’t have to invest time, effort and money into something that ultimately might not work. Rather, it caters to the growing number of people who are interested in ditching the traditional lab that offers bad

22

service and huge inefficiencies for a more modern alternative.

“We have landed on the blueprint of the lab of the 21st century – a fully automated and extremely versatile lab which can make diagnostics available to all,” said Ciechońska.

The initial injection of capital put Salient Bio in a place to think beyond Covid-19 and begin refining its long-term strategy. Indeed, it says its lab is far more productive, easier to run and, because of its smaller size, can be more localised than a traditional lab, adding this gives the consumer far more choice in what diagnostics they want to target at a much lower price.

In terms of future funding rounds, the team says there will likely be a period of lower revenue after the next six months if Covid-19 is brought under control. It will have finalised its long-term strategy at this stage and will look to a funding round in the next 12 to18 months to turbocharge that future plan.

The long-term strategy So, what’s the future plan? Generally, it is to apply its fast, affordable, easily accessible, highly accurate diagnostics to a wide range of medical conditions to facilitate early intervention and improve overall health outcomes.

Although this has not been fully refined, Salient Bio believes that a shift is occurring as the market moves from reactive healthcare, where, for example, you might find a lump and then test for malignancy, to a much more proactive and preventative state of affairs. The team foresees a situation where healthcare will become more about performing ‘community scale MOTs’ which are not searching for any particular medical condition but can track an individual’s health and catch any concerning deviations from the norm.

Once the pandemic is under control, the excess centralised

HealthInvestor UK • December 2020

HEALTHTECH

capacity of standardised Covid PCR testing will require Salient Bio to carve out a niche for itself. To Salient Bio, the coronavirus pandemic is not the cash-cow many biotech firms have viewed it as. Rather, “it has been an opportunity to realworld test and refine our innovative workflow under some of the most stress it could ever be subjected to,” the team told HealthInvestor UK, “this has informed us of the capability of our platform to tackle much wider medical issues at scale.”

Salient Bio’s next direction will probably seek to develop its platform to facilitate these community-scale ‘MOTs’ through Next Generation Sequencing (NGS), specifically microbiome testing. A working microbiome diagnostics service will operate similarly to blood test tracking, where blood composition is tracked over time and monitored for unusual deviations, but instead track gut health. The health of our gut is potentially more indicative of overall health than blood testing, which means this form of tracking could provide a more nuanced view of how one’s health is progressing than blood testing does. Furthermore, the team says that this more niche discipline commands a far greater profit margin too.

Beside the NGS route, the team has noticed one area not currently being executed on at all is bringing mass scale diagnostics to the developing world – and that this is an opportunity that has the potential to command vast market share in the space moving forward. Much of the developing world is locked out of conducting mass-scale diagnostics due to the cost of the equipment and reagents. A supply chain agnostic approach enables access to massively lower cost supply chains and, potentially more crucially, local supply chains, without compromising on quality of testing. Further, the cost of the equipment is a fraction of those currently available from the large incumbents.

So, Salient Bio has identified the niches it sees as viable for it to explore. However, Jack commented that the versatility of its platform places it in an especially beneficial position where it can fulfil the customer’s requests rather than have customers mould their needs to fit Salient Bio’s platform.

Plate filling robot

HealthInvestor UK • December 2020

“We will uniquely have the opportunity to ask the customer what they want, instead of offering them a commoditised set of services to choose from,” Jack says.

Incoming challenges While Salient Bio remains optimistic, it is aware of the challenges it faces, both immediately and long term. As previously stated, it’s unlikely that Covid-19 testing will be feasible as the sole operation of the business in the second half of next year as it is presently. As it is not venture capital funded like most start-ups, it must be more cautious about how it spends its money.

To remedy this, a future funding round within the next year will be an important step. Building up a watershed of capital will be vital in keeping the business ticking over during the inevitable post-Covid slump. The team told HealthInvestor UK that once reaching this stage, Salient Bio will most likely operate much like a normal biotech start-up, spending most of its money on salaries and R&D.

Where will Salient Bio be in five years?

When start-ups are asked the ‘five-year’ question, the answer is usually more interesting than that of larger, more established businesses, purely because ambition often outweighs capability at the early stages of a company’s life – especially in the tech sector. However, the team’s answer, while still ambitious, seems pragmatic and achievable.

The direction of the firm in the long term is heading towards the provision of tech-led, fully automated labs, and Salient Bio want to be a leader in this space. Jack explains the logic behind how it aims to achieve this.

He believes the value chain speaks volumes. Indeed, at present, this chain consists of the patient; the intermediary (that is, hospital, clinic or pharmacy) which makes 20% margins; the lab, which the intermediary requests services from, which makes 30% margins; and then the equipment and consumables, which the lab uses to run the tests, the providers of which make 50% margins.

Following the pound through, Salient Bio is already capturing 80% of this margin, designing its own diagnostic workflows and being its own lab.

While it is looking for ways in which to remove the intermediaries in the very long term, it is clear that investing in being the lab is attractive. Of course, the challenge in achieving this goal while maintaining growth is the scalability of this plan. Namely, opening automated labs more widely in other countries. However, for now, the team feels this is “quite far off to be too concerned with at present”.

In closing, Salient Bio appears to be a healthy, ambitious start-up with a service filling a gap in the market and commanding a majority share of the value chain. Of course, it will certainly face challenges as it adapts its business model to a post-pandemic world and must navigate a scalability challenge in the longer term.

But, with clients across healthcare, logistics, sports and education, and A-list recording artists already utilising its affordable and time-efficient offering, this company’s journey in the new year will be one to watch. n

23

HEALTHTECH

Medicine’s front line Former Green beret commando, intensive care doctor and healthtech entrepreneur Dr Matt Wilson, talks to Simon Williams about his medical research and data start-up uMed 24

HealthInvestor UK • December 2020

HEALTHTECH

F

ounded in 2017, uMed has deployed its technology in clinical research studies, including a University of Oxford study to assess Covid rapid diagnostic tools in community environments such as GP surgeries.

The London healthtech has raised £3.7 million from investors to expand its automated clinical study data platform which now reaches 1.9 million patients in more than 180 primary care sites in the UK, along with two million patients from a large US health system. uMed founder Dr Matt Wilson has worked in some of the most demanding medical specialities in the NHS. As an accident and emergency doctor and former anesthetist, he knows what clinicians are up against just in delivering patient care – which means that research, though crucial, often comes second to delivering immediate patient outcomes.

“When on shifts in the emergency department, I would sometimes go 14 hours without eating anything, so the idea of doing research in these situations is simply unrealistic,” Wilson explained. The pandemic has made things worse.

When he dashed back to clinical practice to support his local intensive care unit in the first wave of the virus this spring, he noticed “operations that would take 10 minutes were now taking up to an hour with all the PPE protocols, the cleansing of work stations, deployment of anti-viral vapours and that fact that some clinicians were also at too high risk for infection themselves to go into Covid wards.” The time window for clinicians to undertake the meticulous, manual tasks associated with studies is just not there, so activity that could yield advances for treatments is lost.

Wilson in the makeshift Regimental Aid Post and ‘bedroom’ in a Somaliland compound in 2013

Return to the NHS

After three years in the marines, Wilson returned to the NHS and, alongside his specialist training, focused his interest on how pioneering data technology could shortcircuit bureaucratic processes to build groups or ‘cohorts’ of patients that would accelerate studies.

Wilson tested his thinking as he went along: “So the thing that started to crystallise for me is that if you want to do something serious with health data you need to be able reach back to the patient.

“That changes everything if you can do it. Crucially you can gain patient Early days consent, as well as validate and augment I’m not naturally an Wilson’s interests in finding ways to data that exists in the health record.” athletic individual automate clinical research stretch back Wilson explained that research using several years. True to his character of aggregated health records has significant and the commando taking on gritty professional challenges, limitations as the records are often course to earn my he won sponsorship from the Royal Navy incomplete, vague and inconsistent. green beret was at medical school. After his junior doctor However, they still have value – if you one of the toughest years, he continued his commission and can combine with them additional experiences I’ve had completed his commando training to data and validation, it becomes an allow him to work in the Royal Marines exceptionally more valuable tool which as a medical officer responsible for the clinicians can use to understand disease healthcare of around 500-800 personnel. and the patient experience.

He served in combat-readiness situations in Somalia “Healthcare still has a reputation for being a cautious supporting Royal Navy anti-piracy operations, as well as adopter of data technologies, for example, the relatively slow in military exercises in Albania, Oman and Kenya. adoption of cloud-based data storage,” Wilson explained.

“I learnt that you don’t thrive in those environments “Really, it has only been in the last five years that the without a tough determination to win through and interoperability standards (for example, the data formats persevere. I’m not naturally an athletic individual and between owners/suppliers) and technological infrastructure the commando course to earn my green beret was one of has been in place to leverage health records effectively.” the toughest experiences I’ve had.

“It was a real slog. But the idea of failing was worse Privacy and consent than carrying on.”

At the same time, legislation in many countries was changing Wilson saw jungles and deserts, as well as icy wastes around privacy and patient consent as well. Wilson posited when arctic warfare training in northern Norway. As that these technological trends opened the door to launch part of his Somalia tour, he led a ‘win hearts and minds’ uMed’s offer in the UK and US health spaces. operation training local coastguards in basic medical skills.

“Look, lots of changes were happening in data privacy.

HealthInvestor UK • December 2020

25

HEALTHTECH

Wilson with members of the medical team enjoying some sunshine during arctic warfare training in northern Norway in 2014

All provided opportunities for our idea and given my own medical work, being close to patients, I could see clearly what the issues and opportunities might be if we could automate patient research securely.”

Without getting too technical, what exactly is the research problem that uMed solves?

“We basically have an unavoidable bottleneck in data operations at the level of the local health providers,” Wilson explained. “There’s not a shortage of questions we need asking as clinicians – there’s a shortage of quality answers.”

The bottleneck is how quickly and how many studies can be run at the level of the healthcare provider. Before uMed, healthcare providers just did not have the time and resources to conduct more than a small number of studies at any one time – unavoidably missing opportunities to gather rapid high-quality compliant data that would be priceless in studying disease.

“Through automation of study processes we have this huge opportunity to unlock massive capacity and scalability

26

in health research. But that wouldn’t have been possible until key technologies converged.”

Effective data So the nub of uMed’s technology is that it enables researchers in clinical studies to use the information in the health record to target potential participants, then repeatedly reach back to those patients on behalf of the healthcare provider. This means data in the record can be combined with high-quality, structured data, captured from the patient at home without any burden being placed on local healthcare provider staff.

Wilson is naturally buoyant on the prospects of the technology for the UK and US and how it is likely to shift expectations in hospital and GP settings about what is possible.

Notably, in uMed’s model the healthcare providers are not the paying customer – in fact, they generate income through uMed’s model which shares revenue from life science clients back to participating sites.

“We have a great opportunity to unlock massive capacity

HealthInvestor UK • December 2020

HEALTHTECH

uMed team members Abi and Marija in the company’s office in Farringdon

Wilson in a team of Royal Marines supporting counter-piracy training to Somaliland coastguard in 2013

and scalability. The effect is that providers can focus on providing clinical care to patients while uMed’s platform automates the heavy lifting of multiple studies.”

To put it in perspective, uMed’s key metric cost for each patient acquisition – patient and complete health record, is less than two pence a time.

“That’s an incredibly powerful validation,” he says.

The recent investment sees £3.7 million to support the company. So, what were the dynamics in persuading investors?

“We’d received some early funding from Angels and Playfair Capital,” Wilson says. “They’ve been extremely supportive and bring that broader business acumen that good investors can provide. No matter how good or determined you might be as an entrepreneur you need that kind of support.”

“This pre-seed capital allowed us to validate our model and was extremely attractive to providers, enabling us to rapidly grow our network with astonishing capital efficiency.”

Wilson explained that this allowed uMed to attract some of the most experienced early stage funds in the sector, including

HealthInvestor UK • December 2020

Wilson in enhanced PPE while working at the Intensive Care Unit at Dorset County Hospital

Albion VC, Delin Ventures and the Silicon Valley fund 11.2 Capital.

The future What’s next? Wilson replies: “We have the model; we have the investment and my focus is now on building up an incredible team. The next stage is to translate our early success into a large pipeline of cutting-edge studies with life sciences and an expanded provider network. To achieve this needs the right people.”

There’s a thread when talking to Wilson you can’t get away from – it’s that dogged determination, refusal to be fazed, an appetite to take on ambitious projects, but also being aware of the landscape; and not being put off by setbacks or the scale of the hurdles – and just focusing on the rewards.

As if to illustrate it, when back on the wards in February to help battle Covid, his second baby son arrived in the world.

No doubt the team uMed is assembling will be as determined as its founder. n

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HEALTHTECH

Tech enabled care Zillah Moore, director at Tunstall Healthcare, discusses why local government and the NHS should invest in medical technology to improve services, and safeguard them for the future

T

echnology is reshaping our lives, however better deployment of technology within health and care services is a key challenge faced by the UK, and this has been particularly highlighted during the Covid-19 pandemic.

Technology connects people, enables integrated care provision and empowers people to manage their own health and wellbeing. It must play a pivotal role in investment and the remodelling of services in a post-Covid world to create a true ‘healthcare’ system.

Barriers to investment Many healthcare innovations are now mainstream, with millions of people using technology to count steps, calories, or hours of sleep. Yet we often don’t consider these innovations as health technology even though they provide remote monitoring, teleconsultation, and environmental sensors.

Although more people than ever are personally investing in medical technology, local authorities and the NHS face numerous barriers to investing in Technology Enabled Care Services (TECS), which has led to some services lagging behind when it comes to digital innovation.

Barriers are complex and intertwined, including fragmented health and care structures, limited resources, and a reluctance to change. The NHS and local authorities also face challenges with replication. Successful projects are rarely reproduced elsewhere in the system leading to different levels of investment and integration between councils and NHS trusts.

The impact of Covid-19 While the pandemic has had significant negative impacts on daily life and many elements of the healthcare sector, it has also placed a spotlight on the role of technology in supporting the development of more proactive and effective care delivery, and safeguarding our services for the future.

NHS trusts, clinical commissioning groups and local councils, are recognising that technology can offer remarkable benefits through wider and more effective investment and deployment.

Technological initiatives that

28

would previously have taken months to become operational have been established and mobilised in weeks. Solutions implemented during Covid-19 have benefitted a range of cohorts, including people living with mental health conditions, care home residents, and people living with long-term health conditions.

Bolton NHS Foundation Trust and Bolton Clinical Commissioning Group invested in healthcare technology in April for 34 of the area’s care homes to protect residents, staff and clinicians during the Covid crisis.

The trust and the CCG implemented a number of innovative services, including the ‘triagemanager’ and ‘myKiosk’ systems to deliver closer monitoring of the health of vulnerable residents, while reducing the need for clinical staff attendance and the risk of cross infection.

The systems also support the effective prioritisation of care within a residential setting, as they clearly identify individuals most in need of interventions.

The health technology provides objective information to empower clinical decision-making, often without the need for face-toZillah Moore, director, Tunstall Healthcare face contact. The success

HealthInvestor UK • December 2020

HEALTHTECH

of the partnership will be measured over time with metrics such as reduced ambulance and GP call outs being assessed, alongside resident outcomes, and the impact on caseload management.

The remote monitoring approach has supported the trust and CCG during the pandemic, but will enable the provision of more proactive care over the longer term, as well as a reduction in the pressures on primary and secondary care services.

Why should we invest?

More effective deployment of technology can deliver significant benefits to our health and care services, from improving patient outcomes and service user experiences, to reducing the strain on staff, and delivering cost savings or avoidance.

TECS have a crucial role to play in improving the experience of individuals who require health and care services, their families, carers and professionals. Vulnerable people can use technology to live at home safely and independently for longer, and devices such as pressure sensors, fall, smoke, and flood detectors provide reassurance to the people using them and those that care for them.

By allowing patients to take vital signs readings remotely, telehealth services reduce the number of visits patients have to make to clinics, reducing travel time and costs, and encouraging services users to engage with their medical condition.

Patients who are engaged in their health and care, which is encouraged by technology, experience better outcomes as they are actively monitoring their health and wellbeing on a regular basis, and feel confident to make decisions based upon this.

TECS also provide benefits for staff and carers within health and care services. Not only do digital solutions reduce workload and benefit users, but they provide a greater sense of job satisfaction, reduced the burden of travel, and offer a greater sense of reassurance that they’ll be alerted in the case of an incident.

Cost savings and avoidance The TEC Services Association conducted an evaluation across 39 councils which identified average annual savings of £1,163 gross/£890 net per TECs user. This was typically split 70% cost avoidance and 30% cashable savings. Clearly, there are significant cost benefits to investing in such technology, both in the short and longer term.

Cost savings in practice In 2013 NHS Calderdale CCG introduced the Quest for Quality in Care Homes Programme to establish a more consistent and sustainable model of care for older and vulnerable individuals in Calderdale.

The programme took a person-centred approach to meeting the needs of people with long-term health and care needs, and to make efficient use of NHS resources. A key focus was to reduce avoidable hospital admissions from care homes, and demands on primary and secondary care.

The programme combines a multidisciplinary team with telecare and telemonitoring systems. The telecare systems consist of a range of sensors which automatically detect

HealthInvestor UK • December 2020

incidents such as a fall, or epileptic seizure, and alert staff to these events via a pager.

More than 1,300 residents have been supported in 38 homes over the past six years, and the project has achieved significant financial efficiencies and associated cost savings since it was introduced.

Results for the second year of the Quest for Quality in care homes pilot (2015-16) showed the cost of hospital stays had reduced, saving more than £700,000 year-on-year, and emergency admissions were down 26% year-on-year.

The next stage of TECS Projects such as the investment into TECS initiated by Bolton NHS Foundation Trust and CCG, NHS Calderdale CCG, and the Covid-19 pandemic, provide clear evidence that TECS result in better patient experiences, improved health outcomes, improved staff experiences, and reduced costs for individuals, the NHS, and local authorities.

Yet, investment in TECS within the healthcare sector is still in its infancy. The NHS, including its trusts, CCGs, and local authorities must work together to develop innovative models which support more efficient care delivery and longterm efficiencies. It’s crucial that we see greater collaboration, improved understanding of the benefits of TECS, and more budget to enable further engagement among vulnerable people.

We’re also beginning to see the next generation of predictive care technology, and over the next few years it’ll encompass integration that enables diverse and scalable models of health and social care. Using artificial intelligence and taking datadriven insight from multiple sources, providers will use this next generation of solutions to optimise population health management programmes by providing personalised and anticipatory care.

Although there’s still a long way to go, this is a trend which will continue and greater investment will lead to technology and data featuring more prominently in how our services are designed. This will empower people to manage their own health, reduce the strain on our services, and safeguard them for the future. n

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HEALTHCARE SERVICES

The Covid-19 transport challenge Patient transport company ERS Medical has created a digital tool for transport resource modelling in an industry first. HealthInvestor UK reports

30

HealthInvestor UK • December 2020

HEALTHCARE SERVICES

N

ew figures show that Covid-19-related pressures are that have emerged since the onset of the pandemic. This is putting a strain on patient transport activities across available via an online tool (free to the NHS) through which the NHS. The time taken to implement important patient transport commissioners and procurement managers measures to keep journeys safe means a drop in capacity can easily and clearly understand their procurement needs. of up to 23%. With benchmarking for journey and resource By using data from multiple contracts and hundreds of requirements already challenging, these measures add greater thousands of journeys each year, the tool can identify trends complexity. that predict indicative resource requirements with minimal The delays come from the requirement for social distancing inputs such as population size, geography, and service type. in vehicles reducing the number of seats available to It also allows for a comparison between pre-Covid -19 and planners. In addition, the time taken for control measures Covid-19-impacted resource requirements. such as vehicle sanitation processes and needing to plan and The model can generate bespoke recommendations undertake additional journeys so vulnerable or Covid-19according to current and projected activity levels. Based on positive patients can travel alone results current Covid-19 assumptions, ERS Medical in significant challenges. found that the combined impact of these Earlier this year, ERS Medical developed variables is an efficiency loss of 23%.

It will be important a model to forecast procurement needs for More importantly, it can also determine patient transport based on key variables the necessary resources required to to ensure that mitigate the losses incurred and work with people who do commissioners and procurement leads to not need to be ensure they are getting the best value from spending additional their contracts. nights in hospital In anticipation of winter pressures on the NHS, it will be important to ensure that are not doing so people who do not need to be spending additional nights in hospital are not doing so, both to ensure bed availability for Covid-19 patients and to reduce risks of infection among those who do not have the virus. With England facing fluctuations in restrictions and infections, it’s critical that the NHS is prepared for the challenge of ensuring a safe and efficient discharge process – and ensuring appropriate transport resources are in place is a critical element in this.

Andrew Pooley, managing director of ERS Medical, says: “In the middle of a global pandemic, and with the UK facing varying lockdown restrictions, it’s more critical than ever to ensure that resources are maximised and allocated as efficiently as possible.”

HealthInvestor UK • December 2020

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HEALTHCARE SERVICES

Pooley has led a turnaround of ERS – which employs 1,000 staff and now has 24 sites across the UK and 600 vehicles – focusing on restructuring to bring the business towards break-even and improving culture and compliance.

In its last accounts filed at Companies House, ERS reported a £1.3 million pre-tax loss on a £25 million turnover in 2018.

According to Pooley, the business had a profitable fourth quarter in 2019 and despite the challenges has remained profitable throughout 2020.

It was Pooley’s experience as an army reservist in Afghanistan that set him on this healthcare career path. The university science graduate was working as part of a protection team, looking after the medical response team helicopter on the ground as it picked up casualties, and flying with the doctors, nurses and paramedics as they cared for the patient on board.

“It was really quite a remarkable thing,” he recalls. “We would be flying 50 feet above the ground at full speed in one of the fastest helicopters there is. You’ve got a casualty in the back with a doctor who is frantically trying to save a guy’s leg or stem a bleed. I was watching them thinking ‘this is incredible’ and from that point I knew that when I got back, I wanted to be in healthcare.”

When he returned to civilian life in 2013, Pooley initially applied to be a paramedic but then saw an opportunity to be a junior operations manager in Plymouth at patient transport firm ERS Medical, then owned by the American company Stericycle.

Pooley realised the patient transport industry was a good fit for him. “The role suited me down to the ground and I loved it, leading and motivating teams through complex projects often under pressure and all with a very human element,” he says.

Pooley went on to oversee the rapid turnaround and growth of First Care Ambulance (FCA) as operations director in 2016, increasing revenue and achieving a good Care Quality Commission rating in less than 18 months. The following year, he and the other FCA directors led a complex acquisition bid for the trade and assets of Leeds-headquartered ERS Medical at a time when ERS was incurring significant losses.

“We saw an opportunity because the front line staff and local management were fantastic and it had a really good geographical spread,” he says.

Pooley led a project to move more than 850 staff, associated premises and assets into a new business, ERS Transition, which trades as ERS Medical.

The business was based on a refined version of the successful FCA model, providing patient transport for NHS clinical commissioning groups, NHS trusts and private organisations.

Key to the delivery of ERS Medical turnaround strategy, he says, has been the implementation of a well-defined leadership model, Mission Leadership, based on the military principle of ‘Mission Command’. This involves the empowerment of managers at all levels to solve problems creatively within a senior manager’s intent.

The turnaround project completed just before the Covid-19 pandemic hit the UK.

32

In March this year, Pooley sold his shareholding in FCA and completed a 100% buyout of ERS. The business grew turnover by 27% in 2019.

However, from the end of March this year, activity levels at ERS fell by 50% due to the cancellation of outpatient hospital appointments as the UK went into lockdown.

Despite the challenges, Pooley said ERS Medical delivered on its existing service level standards and provided extra services to support the NHS. Pooley adds: “I’m really pleased to say that we didn’t make any redundancies as a result of the pandemic. We maintained recruitment and training – with relevant safety measures – and implemented a policy of prioritising recruitment of staff friends and family members who had been made redundant as a result of Covid-19.”

“There have been some real lows and it’s been really tough at times at ERS because it’s been such a massive turnaround.”

He adds: “However, I think the really exciting Andrew Pooley, thing is that we’re just managing director getting started.” n of ERS Medical

HealthInvestor UK • December 2020

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FINANCE: DEALS

deals City and County Healthcare Group acquires Interserve Healthcare COMPANY: City & County Healthcare TARGET: Interserve Healthcare TRANSACTION: Acquisition CONSIDERATION: Undisclosed City & County Healthcare has acquired Telford-based complex care business Interserve Healthcare from Interserve Group, including its service delivery brands Advantage Healthcare and Strand Nursing.

CIM and Envivo join forces to take over Heathcotes Group COMPANY: Civitas Investment Management TARGET: Heathcotes TRANSACTION: Acquisition CONSIDERATION: Undisclosed Civitas Investment Management (CIM), an impact investor specialising in government-backed community real estate assets, has acquired care provider Heathcotes for an undisclosed price. The transaction was undertaken in partnership with Envivo Group, a care provider in the UK residential care and supported living sectors. As part of the transaction, CIM has acquired all the healthcare real estate assets of Heathcotes on behalf of underlying investment clients and Envivo Group has purchased the operational care business. Civitas was advised on due diligence by Connell Consulting.

Civitas acquires complex needs provider Cream Care Group COMPANY: Civitas Investment Management TARGET: Cream Care Group, TRANSACTION: Acquisition CONSIDERATION: Undisclosed Civitas Investment Management has acquired Cream Care Group, which provides person-centred care for people with special needs in its five homes. Connell Consulting provided investor commercial due diligence for the acquisition.

FPE Capital invests in digital mental health platform Togetherall COMPANY: FPE Capital TRANSACTION: Investment CONSIDERATION: Undisclosed London-headquartered FPE Capital, a software and services-focused lower mid-market growth investor has invested in Togetherall, a Londonbased mental health software-as-a-service platform. The investment is the eighth from FPE Fund II. Togetherall delivers 24/7, clinically moderated support to low acuity users via its SaaS-delivered platform. FPE was advised on the transaction by Stephenson Harwood (legal), Luminii Consulting (commercial), Dow Schofield Watts (financial and tax), Intechnica (technical due diligence), and Continuum Ventures (management). Togetherall was advised by EY Corporate Finance and Taylor Vinters.

34

HealthInvestor UK • December 2020

FINANCE: DEALS

H2 Equity Partners to acquire Optegra Ophthalmology Group COMPANY: H2 Equity Partners TARGET: Optegra International TRANSACTION: Acquisition CONSIDERATION: Undisclosed London-based investment firm H2 Equity Partners is acquiring pan-European ophthalmology group Optegra International in a deal expected to complete early next year. Optegra operates 23 eye hospitals across the UK, the Czech Republic and Poland.

HealthHero acquires digital triage provider Doctorlink COMPANY: HealthHero TARGET: Doctorlink TRANSACTION: Acquisition CONSIDERATION: Undisclosed London-based Digital health company HealthHero has acquired digital triage provider Doctorlink after global investor Eight Roads sold its stake.

Doctorlink provides care for more than 12.5 million patients in the UK across more than 1,500 GP surgeries in the NHS.

Kinomica secures £3.9m investment COMPANY: Kinomica TRANSACTION: Funding CONSIDERATION: £3.9million Alderley Park, Cheshire-based proteomic-data science and diagnostics company Kinomica has secured £3.9 million in funding. Growth capital investor BGF, and healthcare, science and engineering investor, Longwall Venture Partners have invested £1.5 million, each. Additional funding of £900,000 was secured via seed investors, including BioCity, Alderley Park Ventures, and Puffin Point, a family office in London.

McCarthy & Stone shareholders vote for £647m takeover deal COMPANY: Lone Star Funds TARGET: McCarthy & Stone TRANSACTION: Acquisition CONSIDERATION: £647 million American private equity firm Lone Star Funds upped its bid for Britain’s largest retirement home builder McCarthy & Stone and the shareholders have accepted. Dallas-headquartered Lone Star offered 120p a share, up from 115p. This now values the company at £647 million, up from £630 million for the original offer.

MCG Group acquires Poppy Nursing and Care Services COMPANY: MCG Group TARGET: Poppy Nursing and Care Services TRANSACTION: Acquisition CONSIDERATION: Undisclosed The MCG Group has acquired Ipswich-based Poppy Nursing and Care Services, a supplier of nurses and carers to hospital trusts and care homes across Suffolk, Norfolk, Essex and the wider UK. The MCG Group is a collection of companies providing services in the aerospace and aviation, construction, education, healthcare and technology sectors.

HealthInvestor UK • December 2020

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FINANCE: DEALS

deals National Care Group acquires Yorkshire care home COMPANY: National Care Group TARGET: Steps Residential Care TRANSACTION: Acquisition CONSIDERATION: £2.5 million.

Accrington-based healthcare provider, National Care Group has acquired Steps Residential Care in Rotherham, South Yorkshire, a registered care home for people requiring nursing or personal care for learning disabilities and physical disabilities. The sale was facilitated by specialist business property adviser Christie & Co.

Frogmore borrows £26.3m from OakNorth for Westminster care home COMPANY: OakNorth Bank TARGET: Frogmore TRANSACTION: Funding CONSIDERATION: £26 million OakNorth Bank has made a loan to real estate investment manager Frogmore to develop a 35-bedroom specialist dementia care home in Westminster.

Optimism Health Group acquires eye care and hearing care business COMPANY: Optimism Health Group TARGET: Outside Clinic TRANSACTION: Acquisition CONSIDERATION: Undisclosed Healthcare investment business Optimism Health Group has acquired Outside Clinic, a domiciliary eye care and hearing care business, which carries out more than 100,000 eye and hearing tests annually. Hazlewoods provided buy-side advisory services including financial due diligence and debt advisory. Simmonds & Simmonds provided legal advice to Optimism Health Group, and bank debt was provided by Shawbrook.

Pets at Home Group acquires The Vet Connection COMPANY: Pets at Home Group TARGET: The Vet Connection TRANSACTION: Acquisition CONSIDERATION: Undisclosed Pet care business Pets at Home Group has acquired The Vet Connection, a large independent veterinary telehealth firm providing round-the-clock veterinary telehealth advice, triage and ancillary services to customers via remote phone, web chat and video consultations.

Electronic health data start-up uMed raises £3.7m COMPANY: uMed TRANSACTION: Fundraising CONSIDERATION: £3.7 million London-based healthtech start-up uMed has raised funding from investors AlbionVC, Delin Ventures and Playfair Capital, as well as Silicon Valley’s 11.2 Capital. uMed’s platform automates the clinical study process.

36

HealthInvestor UK • December 2020

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