Scotland’s life sciences and health tech sectors hold massive potential, according to investment manager Par Equity, citing the recent acquisition of medtech company Current Health.
Par Equity exited Current Health when US consumer electronics giant Best Buy acquired the firm in October for $400 million (£300m).
The move increased the reach of the company’s virtual care-at-home platform, leveraging Best Buy’s logistical and support infrastructure and helping more organisations deliver high-quality, patient-centric care at a lower cost.
With over 750 companies and other organisations employing over 40,000 people, Scotland’s life sciences and health tech sectors provided combined revenue of around at £6.6bn in 2018 and is forecast to grow to around £8bn by 2025.
Current Health’s acquisition is the second largest digital health exit in Europe to date, with Par leading the startup’s first external investment round in 2016 and investing in every subsequent round of funding – ultimately securing an 80% internal rate of return (IRR) for the firm’s syndicate of investors.
The success of Current Health’s remote patient management platform resulted from its role in monitoring critical patients at home for healthcare providers such as hospitals in the US, in parallel with working with the medical research community to support the development of Covid-19 vaccines.
Par Equity participated in the company’s last financing round, in April, ahead of the acquisition, when a collective of many of the world’s largest pharma and health care venture capital firms (VCs) led by Northpond Ventures secured a $43 million Series B round into Current Health.
In 2016, Current Health was being successfully trialled with the NHS. In a very short period, it accelerated from a small Scottish base to a technology that is being used around the world by some of the largest healthcare groups.
Par Equity’s Robert Higginson, who focuses on Digital Health Technology, worked within Scotland’s life sciences community to surface several key recommendations, which will be published shortly in the Scottish Government’s Investment in Life Sciences Report.
Key amongst those recommendations were: improved access to much larger pools of capital to support scaling-up Scottish companies so they can complete, especially in the US; addressing the back-log and complexity of securing regulatory approval and harmonising international standards; and establishing a mechanism to engage innovators in the NHS as partners to deliver solutions to the government’s key health priorities.
Higginson said: “The contribution digital health technology companies in Scotland can make to the international healthcare and life sciences sectors has never been better demonstrated than by Current Health.
“Across our universities, ambitious young entrepreneurs are driving advances in technology, covering fields such as artificial intelligence, quantum computing, robotics, photonics and nanotechnologies.
“Within healthcare, institutional investors have a great opportunity to step up and play a key role in supporting the NHS to address some of the major challenges faced by society such as ageing demographics and mental health.”
Higginson also highlighted the importance of the work into the sector led by Life Sciences Scotland (LSS), the industry leadership group chaired by Ivan McKee MSP, Minister for Trade, Tourism and Enterprise.