Since the onset of the credit crunch, few industries have claimed immunity from economic turmoil. Cambridge-based life sciences firm Lab21 is doing just that however, believing that the medical technology sector is largely protected from the downturn.
Confident that it can grow strongly in 2009, Lab21 is planning an aggressive acquisition strategy targeting companies in Europe and the US. It has just closed a £2.2 million (€2.4 million; $3.3 million) funding round from venture capital firms Merlin Biosciences of the UK and Boston-based Nexus Medical Partners to assist its growth aims, including launching a US office in South Carolina.
Graham Mullis, chief executive of Lab21 says: “Healthcare markets are pretty well protected from the wider economy.” He concedes that the sector is not “bombproof”, but says the products and services provided by Lab21, which include in vitriol diagnostics and cancer treatments, are still in strong demand from healthcare providers, biotechnology companies and pharmaceutical groups.
Merlin provided seed funding for Lab21 in 2005 and has invested more than £10 million in the company over the last three years. Following the latest funding round Merlin's shareholding has dropped from around 90 percent to 80 percent, leaving Nexus and listed Bristol-based stockbroker Rowan Dartington with approximately 10 percent between them.
The diagnostics sector, which Mullis says is worth between $37 billion and $47 billion in the US alone, is still unconsolidated with lots of small operators vulnerable to acquisition.
LAB21 AT A GLANCE
Headquarters: Cambridge, UK
Funding round: £2.2 million
Investors: Merlin Biosciences, NexusMedical Partners,
Rowan Dartington, Kreos Capital