Acolyte Biomedica Ltd (£4.7 million receivable)

- $1.3 billion estimated global market for clinical microbiology

- Rapid detection of MRSA

Overview

Formed and developed from scratch by ANGLE since 2000, Acolyte Biomedica was sold to 3M Corporation on 14 February 2007 for a headline consideration of US $100 million.

The development of Acolyte Biomedica from start-up through to trade sale to a major international company demonstrates the strength of ANGLE’s Progeny® process in generating value.

ANGLE’s other portfolio companies are built using the same Progeny® process although we have substantially greater equity stakes in the companies built since our flotation than the 11.4% holding in Acolyte at exit and would therefore expect a greater share of sales proceeds on disposal of those companies.

ANGLE founded Acolyte in conjunction with the Defence Science and Technology Laboratories (Dstl), an agency of the Ministry of Defence at Porton Down, Wiltshire, on whose technology it is based, in 2000.

ANGLE was actively involved in the management of the business up until its sale. Andrew Newland chaired the business for the first two years of its existence and an ANGLE executive was on the board up until its sale. During this time, Acolyte completed three venture capital rounds, undertook key product development and launched its first product, the BacLite® Rapid MRSA test which allows hospitals to obtain results within five hours of screening patients and hospital workers for the presence of MRSA. This compares with three days to obtain results from conventional screening.

Detection of the MRSA super-bug is the first application of Acolyte’s BacLite® technology, which can also be applied to the diagnosis of a wide range of other serious infections.

In the UK, the spread of MRSA has generated many headlines and created much controversy. It is, however, just one manifestation of a much broader global issue. Increasing resistance to antibiotics means that infectious diseases have re-emerged as a serious health issue across the world. In the UK alone, for example, hospital-acquired infections cause an estimated 5,000 patient deaths per annum.

The problem of diagnosis is exacerbated greatly by the traditional manually-intensive bacteriological process of culturing organisms. As a result, a long (two to four days) lead time is required for diagnosis. Worse: 45-90% of current provisionally-assessed broad spectrum antibiotic treatments are inappropriate.

Founded by ANGLE in 2000, Acolyte Biomedica addressed this critical issue. Its platform technology, BacLite®, slashed the lead time to diagnose and deliver successful antibiotic therapy from days to just five hours. It also delivers two other key benefits. First, its widespread application should reduce the spread of resistant organisms and, consequently, extend the life of available antibiotics. Second, it helped healthcare providers reduce costs by minimising hospital stays, cutting levels of secondary testing and facilitating continued use of less expensive antibiotics.

Market Opportunity

The market ‘canvas’ for Acolyte’s proprietary diagnostic systems and research reagents in clinical microbiology is estimated today at $1.3 billion. In human terms this means, for example an estimated 140,000 UK MRSA infections and a staggering 5 million MRSA tests (15 million in the US) per annum. As rapid testing is adopted for active surveillance, these levels will almost certainly rise sharply. More broadly, BacLite® was ideally positioned to address many established and emerging needs across the whole domain of life sciences.

Receivable

ANGLE is due a further financial payment in respect of the sale of the business of up to £4.7 million. However a dispute has arisen between the former Acolyte shareholder and the purchaser. ANGLE received legal advice that there is a strong case and it is highly probable that an action will succeed. The matter is being pursued by the major shareholder with the other shareholders reserving their rights, therefore ANGLE has limited expense to any litigation costs at this stage.


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Ventures Process Principal holdings Novocellus Geomerics Parsortix Other holdings Acolyte Biomedica NeuroTargets Exits Provexis Exago	Acolyte Biomedica Ltd (£4.7 million receivable) - $1.3 billion estimated global market for clinical microbiology - Rapid detection of MRSA Overview Formed and developed from scratch by ANGLE since 2000, Acolyte Biomedica was sold to 3M Corporation on 14 February 2007 for a headline consideration of US $100 million. The development of Acolyte Biomedica from start-up through to trade sale to a major international company demonstrates the strength of ANGLE’s Progeny® process in generating value. ANGLE’s other portfolio companies are built using the same Progeny® process although we have substantially greater equity stakes in the companies built since our flotation than the 11.4% holding in Acolyte at exit and would therefore expect a greater share of sales proceeds on disposal of those companies. ANGLE founded Acolyte in conjunction with the Defence Science and Technology Laboratories (Dstl), an agency of the Ministry of Defence at Porton Down, Wiltshire, on whose technology it is based, in 2000. ANGLE was actively involved in the management of the business up until its sale. Andrew Newland chaired the business for the first two years of its existence and an ANGLE executive was on the board up until its sale. During this time, Acolyte completed three venture capital rounds, undertook key product development and launched its first product, the BacLite® Rapid MRSA test which allows hospitals to obtain results within five hours of screening patients and hospital workers for the presence of MRSA. This compares with three days to obtain results from conventional screening. Detection of the MRSA super-bug is the first application of Acolyte’s BacLite® technology, which can also be applied to the diagnosis of a wide range of other serious infections. In the UK, the spread of MRSA has generated many headlines and created much controversy. It is, however, just one manifestation of a much broader global issue. Increasing resistance to antibiotics means that infectious diseases have re-emerged as a serious health issue across the world. In the UK alone, for example, hospital-acquired infections cause an estimated 5,000 patient deaths per annum. The problem of diagnosis is exacerbated greatly by the traditional manually-intensive bacteriological process of culturing organisms. As a result, a long (two to four days) lead time is required for diagnosis. Worse: 45-90% of current provisionally-assessed broad spectrum antibiotic treatments are inappropriate. Founded by ANGLE in 2000, Acolyte Biomedica addressed this critical issue. Its platform technology, BacLite®, slashed the lead time to diagnose and deliver successful antibiotic therapy from days to just five hours. It also delivers two other key benefits. First, its widespread application should reduce the spread of resistant organisms and, consequently, extend the life of available antibiotics. Second, it helped healthcare providers reduce costs by minimising hospital stays, cutting levels of secondary testing and facilitating continued use of less expensive antibiotics. Market Opportunity The market ‘canvas’ for Acolyte’s proprietary diagnostic systems and research reagents in clinical microbiology is estimated today at $1.3 billion. In human terms this means, for example an estimated 140,000 UK MRSA infections and a staggering 5 million MRSA tests (15 million in the US) per annum. As rapid testing is adopted for active surveillance, these levels will almost certainly rise sharply. More broadly, BacLite® was ideally positioned to address many established and emerging needs across the whole domain of life sciences. Receivable ANGLE is due a further financial payment in respect of the sale of the business of up to £4.7 million. However a dispute has arisen between the former Acolyte shareholder and the purchaser. ANGLE received legal advice that there is a strong case and it is highly probable that an action will succeed. The matter is being pursued by the major shareholder with the other shareholders reserving their rights, therefore ANGLE has limited expense to any litigation costs at this stage.