Deloitte Technology Fast 50: No. 3
Taking bronze in the Deloitte Fast 50 2009, ApaTech is a London-based orthobiologics company which has seen rapid expansion in the last eighteen months drive the business to a five-year growth rate of 8318 per cent.
The company was spun out of Queen Mary, University of London research into synthetic bone graft technology in the 1990’s, which generated a variety of commercially-viable IP.
Funding from 3i meant that further research could be done into how the process could be scaled up to industrial production levels and generate clinical data. Simon Cartmell, CEO, explained: "I took over as CEO in 2004, changed the company focus and tweaked the product set to differentiate it from the rest of the market. There are around 150 other synthetic products on the market, and clinical results occur after 6-12 months so you need to be very conscious that you are selling a concept of potentially improved outcomes based on superior science to the surgeon. Differentiation and distribution are our biggest challenges."
The move resulted in Actifuse, a bone graft material that the company claims is among the most effective on the market, but without side effects of the market leader and at a much lower price point. "The bone graft market is a complex one: donated bone suffers from provenance issues, and patients own natural bone requires a second operation; biotech products use proteins to stimulate bone growth, which can be hard to control, have a range of side effects and tend to be very expensive ($5,000 per treatment). Our product enhances the patients' natural processes to generate bone, so is controllable, and more like £500 to 600 per treatment", said Cartmell.
ApaTech now has operations in London, Massachusetts and Berlin and sells its products in over 25 countries around the world. The US has proven a key market due to rising concerns over the side effects of protein-based alternatives, while Japan and major European countries are vital secondary markets.
The company has raised more than $60m from investors in total, and had originally planned to be profitable by September 2007, prior to a trade sale or IPO in 2008. However, the second part of the strategy was reconsidered. "We were only one month late on a four year business plan, which was very pleasing. However, we decided not to sell as originally planned, instead opting to refinance the business and increase our production capacity. We began a $13m second manufacturing facility in June 2008, which is set to complete this quarter. The new facility will enable us to meet $300m of annual orders, which shows where our ambition lies - it’s been a real rollercoaster ride", said Cartmell.
