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Good ideas don’t always make money. That’s the simple premise that Jeremy Russell presents as he outlines his plans for medical devices company OR Productivity.

He’s been chief executive at ORP for nigh on four years and has taken the company to the point where it now has a key product in-house and is in the later stages of negotiation on acquiring a couple more.

But these products have not gleaned Russell’s attention purely for their ingenuity. A brilliant invention may solve a particular problem perfectly, he says, but if an anaesthetist (say) is only going to need it once a year, then its commercial application is limited.

It’s this appreciation of financial reality that the inventors of new applications often fail to appreciate, and which leaves many an idea dead in the water.

Russell, though, is not like that. His focus puts as much emphasis on development as on research, and if anyone’s in a position to appreciate the subtle nuances involved in the distinction, he is.

He gained a PhD in chemistry from the University of Surrey, after which he worked as a senior isotope chemist at Glaxo (LON:GSK), moved on to several roles at Biocompatibles (LON:BTG) and then became R&D director at Smiths Medical, now part of Smiths Group (LON:SMIN).

He has been responsible for launching over 75 products. “My background has been about getting products right and into the market,” he says.

At first he wasn’t sure about ORP’s key product, FreeHand. It allows surgeons conducting minimally-invasive surgery to control the surgical camera robotically via head movements. This dispenses with the need to have a separate junior doctor control the camera and thereby also reduces the wobbles that can creep in towards the end of a procedure.

It’s cheaper, and more efficient. So what’s not to like?

Without beating about the bush, Russell says that in its initial phases the product wasn’t quite right and needed to go through a couple of iterations.

It was supported though by entrepreneur Charles Breese, through his SMARTCO Select financing business.

“Charles wouldn’t let it die,” says Russell, and after a bit of persuading he decided to take on the challenge after all, set a total funding requirement which has so far been kept to, and began to mould the FreeHand business into OR Productivity. More details about the product can be obtained by clicking here for Proactive’s video interview with Jeremy Russell, and here for a product video.

“The concept was that we want to put together a business that takes on technologies and gets them right. The technologies need to be economically and clinically efficient, and we will take them forward using partnerships for manufacturing and commercialisation.

FreeHand is the first, and on the basis of this product alone financial analysis conducted by Hardman & Co suggests that sales could hit over £1.3 mln in two years’ time, while earnings before tax and interest could total £225,000.

It’s an enticing proposition, especially when supported by the additional products that Russell hopes to bring to the table.

But that growth needs to be funded, and to that end ORP is currently looking to raise £1.5 mln privately through business angels and through the SyndicateRoom crowd-funding platform and a trading facility on the Asset Match private market.

Syndicate Room is slightly different from other crowd-funding sources in that it doesn’t put forward any proposition that hasn’t already been backed by angels. That way there’s a certain amount of in-built due diligence to any deal on offer, and investors can be further reassured because they will only ever be offered the opportunity to invest on the same terms as the angels.

It’s also strongly supported by Charles Breese, which helps.

And Charles is perfectly clear as to why SyndicateRoom, Asset Match and OR Productivity make such a good match in advance of ORP’s planned official listing in two years’ time.

Syndicate Room and Asset Match are disruptive of traditional pre-IPO financing in a way that mirrors the disruption that ORP hopes to deliver for the benefit of both patients and health service providers.

Still, if the effects on medical devices and operational practice turn out to be disruptive, the business model itself is very straightforward, which is why Breese is keenly promoting ORP as a SMARTCO.

“There is stacks of good technology around,” says Breese. “But there’s also a shortage of teams to shift the technology and realise its commercial potential. The plan with ORP is to create a mini-conglomerate focused on minimally invasive medicine.”

The key, though, he continues, is for the company to generate recurring revenues along the lines of a utility.

Thus the FreeHand unit is installed in a given theatre at a cost of a few thousand pounds, but each time it’s used disposable items bought from ORP will be required. Thus if the unit is used, say, between 10 and 20 times per month, that would equate to revenue of between £1,000 and £2,000 per month if each disposable were to cost a notional £100.

Given that the machinery would become a sunk cost after a few months, such income has the potential to be very high margin – as high as 70% reckons Russell.

This is a young, fast-moving business that’s adopted an innovative approach to its pre-IPO funding activities that’s in keeping with its innovative approach to product development.

By using Syndicate Room, Asset Match, Hardman - and our very own service at Proactive - for funding, trading, research, and media respectively this is a company that will have the look and feel of a listed company long before it actually does list.

With that in mind, early investors may well find that they turn out to be the ones reaping the biggest rewards.

Read more here.