Farmer&co's £1.2m pumps new life into bypass artery firm

Published on Tuesday 6 January 2009 20:17

A SCOTTISH medical device company yesterday said it had raised £1.2 million in a third round of funding from a consortium of investors including Kwik-Fit tycoon Sir Tom Farmer.

Tayside Flow Technologies has developed an artificial artery with a unique corkscrew design that mimics how blood flows naturally in the body. It will use the money to bring its first product, a vascular graft for bypassing blocked or damaged arteries, to the market in the US, and expand its reach in Europe, where it already has sales in six countries.

Geoffrey Thomson, chief executive of Perth-based Braveheart, one of the other investors in TFT, said he expected the medical device company's sales to "ramp up substantially" in the next six months as a result of the funding injection. TFT chief executive David Lawrence said that, pending a licence application with the US Food and Drug Administration, the firm expected to be entering the lucrative US market by mid-2009 and to "break even" by 2010.

TFT has raised more than 9m in equity and grants since it was launched ten years ago by three vascular specialists at Ninewells Hospital in Dundee. The lead developer of the technology, Professor Peter Stonebridge, is understood to be Scotland's only professor of vascular surgery.

Farmer has been involved with TFT since 2002 and has taken part in three funding rounds. The businessman invests in a number of early-stage start-up companies through his company Maidencraig Investments.

"They (TFT] have had a hard road. It has not been easy," said Farmer. "It has been interesting to see all that is involved in trying to bring a new medical product to market. But perseverance and the fact they knew what they were trying to do gave us a lot of confidence.

"Now they are at the stage where they have American and European recognition we are seeing the light at the end of the tunnel."

Thomson said the struggle to get sufficient investment had slowed the company's development.

"The company has always struggled to raise adequate capital," said Thomson.

"It is difficult for these little companies. They can't really raise enough to go fast so they have to go slow. That has been an issue all the way through. But they have done very well."

Last year, the company revealed clinical trials that showed its artificial arteries were more effective than those currently in use.

By October, trials showed a 90 per cent success rate where the TFT artery was used to bypass blocked arteries below the knee. Using traditional artificial arteries, half failed in three years, while about 40 per cent of patients using them had to undergo an amputation.

Investors in the TFT fundraising included Edinburgh-based investment bank Quayle Munro and Scottish Enterprise. Company management and their family members also participated in the round, which totalled 1.2m – more than anticipated – and includes debt facilities from RBS.

Lawrence said the graft market had seen little innovation in the past 20 years and TFT's proprietary technology – called Spiral Laminar Flow – had the potential to extend both the quality and lifespan of cardiovascular devices.

TFT said the global market for its products was estimated to be worth as much as 11bn. Cardiovascular diseases such as atherosclerosis are the number one killer in the UK and the US.