Proof that patience pays
Tuesday 10 April 2012 0:00
A science firm forged in the dead of night on a university campus has, after years of hard work, finally made its breakthrough. BQ discovers its global potential.
Hidden deep in the basement of a Yorkshire terrace for some years was a laboratory which passing folk on their way to the nearby church, library or park were perhaps oblivious to.
But there was nothing sinister about this tiny pocket of test tubes, liquids and scientific endeavour concealed amid the chimney pots and old brick of residential Pudsey.
The homemade lab in LS28 was not part of some dastardly plot, but was actually built on a desire to help improve medical diagnostics, treatment and research.
Although no longer active, it formed the catalyst for one of Yorkshire’s most promising science businesses.
Its creator is Dr Arron Tolley who, alongside his business partner Dr David Bunka, is co-founder of Aptamer Solutions.
Their story features a long hard slog, personal sacrifice and most definitely not overnight success.
It is a fable for would-be entrepreneurs who may be under any illusions about how tough it can be to make it in business – an antidote to the notion that running a globally successful business is anything other than incredibly difficult.
The fact that chief executive Tolley has not drawn a wage from the business in four years, for example, serves as a reminder to budding Zuckerbergs of the level of commitment often needed to turn a start up into an empire.
“I’ve got a very understanding wife,” he says, explaining how the foundations for the business were entirely self-funded.
But Aptamer Solutions also shows that risk does – albeit eventually – follow reward if the business plan is viable, carefully thought out and backed up by unswerving determination.
The company’s breakthrough came earlier this year when it won £400,000 worth of Technology Strategy Board-backed funding to support its work on a £2.2m collaborative project that is developing a potentially game changing diagnostics device.
It is also celebrating its recent success in an investment competition at the annual enterprise event Venturefest, in York, for which it landed a £29,000 package of support from local businesses.
The firm produces molecular substances called aptamers which can be used to replace antibodies in life sciences research into areas such as diagnostics, therapeutics, biomarker discovery and nanotechnology.
The company is now on the verge of a move to a “bigger, better” location near York and is confidently awaiting news of a number of tender bids spread across the UK as it rapidly emerges from the R&D stage into the commercial market.
It started life in 2008 when two studious scientists crossed paths at a deserted Leeds University coffee lounge in the early hours of the morning.
“I met David while I was working on my PhD.
We both regularly worked very late into the night and because we were the only people left in the building we’d go for coffee breaks together and got chatting about what he did.
At the time he was a post-doc and when I was having problems with my work, he’d help me through them and became a mentor to me.” Tolley’s commercial expertise, gained from a past career as a sales manager in the construction industry, quickly fused with Bunka’s research in aptamers to form a promising business plan.
“David had been working on aptamers for 10 years and as soon as I understood what they were and what they did, I was extremely interested in working with them.
He didn’t have any experience in the commercial area being a pure academic so I said I would set the company up and do the due diligence.” The company also needed to create some intellectual property so Tolley built a lab in his basement – an undertaking which spanned three years given the time taken to save up for expensive components.
The 34-year-old, who left school with no formal qualifications at 16, still insists he is not an academic despite a mature student’s degree in molecular medicine from Wolverhampton University and a PhD in biophysics and structural biology from the University of Leeds.
The Midlander does, however, have an eye for an untapped commercial territory.
Although hugely lucrative, the aptamer market is relatively sparsely populated by suppliers.
On a global scale Tolley reckons there are a mere 10 to 15 firms currently active in the industry.
The antibody market is entirely different, with around 400 players all battling it out for a share of the estimated US$67bn market.
But since “aptamers can do things better than antibodies,” according to Tolley, there is much room for growth and certainly enough demand for a small Yorkshire start-up to live out its considerable ambitions.
“Aptamers will increasingly take a larger chunk of the antibody market in the coming years,” he says.
“Antibodies are made in animals and are ubiquitous in the life sciences industry.
They are used in areas ranging from R&D in the lab to the active component in pregnancy kits and to deliver chemotherapies specifically to cancer cells.
There’s quite a broad spectrum of things that antibodies can be used for and aptamers can not only do what antibodies do, but can also work in areas where antibodies don’t function properly and often do what antibodies do better.
“For example, if you wanted to detect toxic substances in urine samples, some antibodies can’t be generated as you can’t inject an animal with a toxic substance in the first place to get an antibody.
“However, aptamers, are made in a lab and because of this we can tightly regulate the conditions and get them to stick to molecules that antibodies can’t stick to.
There’s a huge market out there for the simple detection of molecules that antibodies can’t detect.” Although Aptamer Solutions is still waiting for certain patent-related processes to unfold and for several leads to turn into full blown contracts, the future is certainly bright for the firm.
Having been self-funded for the past four years, the company now has a supportive private investor within its ranks.
A standout achievement is its ongoing involvement in a £2.2m collaborative project with electronics titan Sharp, the University of Southampton and UK technology group Oxford Instruments.
Buoyed by £400,000 in funding, Tolley and Bunka will develop the aptamers to be used in a new handheld device which will detect respiratory diseases.
“The funding has been key to us in climbing to the next level.
“A company of our size could never have afforded to do this level of R&D on our own and the Technology Strategy Board assistance has been invaluable in giving us a push forward,” says Tolley.
“The project and funding have opened up great opportunities for us and will greatly assist us in the undertaking of cutting edge R&D that could give our company a global presence.
The device will enable doctors to take a quick blood sample and measure markers for respiratory diseases and tell whether a patient has had an asthma or heart attack, for example.
“It could also be used by parents at home to monitor children suffering from severe asthma attacks and to check whether their medication is working.” The device is expected to enter a market which is believed to be worth around £50m in the UK alone, within five to seven years.
Tolley is keen to explore other applications for the device, such as the detection of tuberculosis, although he admits further funding would be needed to exploit such potential opportunities.
Meanwhile, another major milestone for the firm has been the £29,000 it has received in February as part of the Venturefest Yorkshire 2012 event – which saw five firms compete in an investment competition in the backdrop of an innovation exhibition at York Racecourse.
The company, which Tolley says has always been conservative in its commercial targets, was chosen as the business most likely to fulfil the aims of its business plan.
Unlike many investment competitions, however, the prize does not come in cold hard cash, but through contracts with professional services suppliers.
It includes the essentials – like legal advice worth £2,500 from Nabarro and £3,000 of accountancy services from Atkinsons – to important luxuries which are out of reach of many start-ups, such as sizeable PR and business development coaching contracts.
“The prize has been really useful because it covers every possible variable and has allowed us to restructure the business.” Taking on new employees, forays into Asia and the US and broadening its portfolio of aptamers all beckon for the business in the not so distant future.
In the meantime Tolley’s personal lab has been packed into boxes awaiting the move into the company’s new residence at Sand Hutton, North Yorkshire.
Now perhaps, after years of toil, endurance and faith in his business plan, Tolley can finally treat himself to a salary.
Nurturing a brighter future
Although the success of most fast-growing science firms like Aptamer Solutions is built on perseverence and determination, many start ups in the sector require the support of incubation units. Here BQ examines their importance against the backdrop of current market conditions.
Over the past 15 years, the number of business incubators in the UK has increased dramatically as business start-ups recognise the value of moving out of the home office and into professionally supported premises.
With more and more incubator units opening their doors, there are many benefits to establishing just what part an incubator can play in the development of a business through the range of services they offer.
Currently, there are approximately 300 incubators across the UK supporting a range of sectors, including ICT, science, technology, creative industries, and social enterprises.
The concept of the business incubator may not necessarily be brand new, but the service offering is consistently evolving to meet the needs of modern businesses. Many modern incubator units now offer sector specific space for the likes of creative businesses or digital start-ups to encourage networking and partnership working across different business areas.
A business incubator provides flexible space and leases, access to general office facilities such as fax and copy machines and access to meeting rooms. The level and type of support a young business needs is taken care of so that entrepreneurs can focus solely on doing what they do best, the work they need to develop their business.
Alex Wiley, marketing manager at South Tyneside enterprise agency TEDCO, which manages one of the North East’s higher profile business incubator units, Quadrus, says: “The purpose of a business incubator is not to simply offer space but to help a small enterprise to grow.
“[Here at Quadrus] we house a broad range of businesses, including HR consultancies, medical practitioners and freight shipment but the key to our ongoing success has been identifying the individual needs of so many different businesses and putting services in place to meet them.
“We work in partnership with our clients as we ultimately want the same thing, for them to grow and establish themselves as a success.”
Business start-up and self-employment is on the up and recent labour stats from the ONS reveals that although 2.68 million people are now unemployed in the UK, the number of self-employed people (freelance or contract workers, not Ltd companies) has increased 8% since 2008 to 4.14 million. For sole traders, the most straightforward working environment is the home to keep costs low however, for many self-employed individuals keen to grow their business, the prospect of professional business premises simply cannot be a long-term pipe dream.
“The advantage of an incubator is the flexibility offered to any type of business looking to professionalise the service they offer customers,” says Wiley.
“Business support from an incubator such as Quadrus is an invaluable resource for young enterprises, whether it’s offering networking opportunities, taking on staff, expanding to a larger office or assisting in sourcing premises when they’re ready to move on, we aim to be an early support partner for any fledgling business.”
Most clients of business incubators are attracted by the 'easy-in' and 'easy out' terms, but once through the doors, it’s often the access to business growth support that keeps them.
The advantage of flexible unit sizes is a particular advantage during what can be uncertain economic times as the demand for space, staff, equipment and stock grows, a business incubator can 'flex' with you, offering a range of unit sizes to meet the needs of start-ups.
A York in the park
Managed by York Science Park, York University’s Springboard facility provides the space and support needed by entrepreneurs to turn ideas into commercially viable businesses.
Aside from the ultimate goal of widespread commercial success, residents have the perhaps more achievable aim of progressing to The Catalyst – a larger space at the University designed specifically for creative, IT, digital and media businesses.
Last month the University officially celebrated the successful transition of five businesses between the two facilities.
They included social media monitoring business Yatterbox, Ian Walker & Co Chartered Accountants, online probate experts, The Law Wizard; innovation and design-led company Inclusive Innovations.
Tracey Smith, managing director of York Science Park, says, “It has been fantastic to witness these businesses develop over the past year; from the very early start-up ideas that they brought with them when they moved into Springboard, to the more established and flourishing businesses that they have now become as they move into our larger space in The Catalyst.
“Encouraging and facilitating business development and growth is exactly what York Science Park is all about.”
Case Study: The bigger picture
Having witnessed a 7.7% fall in the number of private sector jobs in Birmingham between 1998 and 2008 – leaving an already fragile situation before the recession even hit – one of the city’s start up champions believes business incubation should be part of a much bigger strategy.
Simon Jenner, head of incubation at Birmingham Science Park Aston wants the city to foster a community and structure that will accelerate high-growth businesses, generate new employment and increase Birmingham’s Gross Domestic Product (GDP).
He says: “The benefits that entrepreneurs bring to the economy are undeniable. Successful new business result in new jobs and increased GDP; the key factors that have a knock-on effect on the health of the whole economy.
“The Entrepreneurs for the Future incubation centre at Birmingham Science Park Aston has supported 54 new start-ups in just over two years, creating 82 new employees and directors in the process. But we – and the city as a whole – must achieve more.
“The change of Government in 2010 led to the removal of many of the established business support organisations which caused disruption to the marketplace. We now have the opportunity to change the emphasis and direct support to where it will have the biggest impact; quality start-ups. Funding and support is scarce and needs to be focused on the best start-up ventures, not spread thinly, achieving headline volume but little else.
“Surely the easiest way to solve many of Birmingham’s economic struggles is to learn lessons from the Boulton, Watt and Murdoch era and let the entrepreneurs grab the reins and lead us out of recession.
He calls for the establishment of an entrepreneurial framework to nurture the current and next generation of business men and women. Agendas need to be aligned, he says, as vested interests are “smashed”, and individuals leading local business support initiatives become braver.
“One of the major constraints for start ups is access to very small amounts of funding, such as £10-50,000 to get the business up and running. Many start-ups fail to launch because they need this low level of funding to carry out market research and product development to reach investment ready status or revenue generation. The current schemes run by Aston Re-Investment Trust (ART) and Finance Birmingham really only become viable once a business is trading. To generate many more quality start-ups, a soft-loan fund which delivers £15,000 per business should be established and repayment should only be collected once the business is sustainable.
“I also propose that all start-ups are enrolled on a new entrepreneurial city programme. New businesses should be subject to 100 per cent rates relief for a maximum period of two years. This will clearly demonstrate that the City Council is behind the new initiative, which will create inward investment activity for the city.
“I anticipate that the level of funding required to make Birmingham’s entrepreneurial city pledge a reality is a mere £1.25m per year, as most of the activity and infrastructure already exists. The return on this investment is potentially highly significant and would be seen in jobs created, jobs safeguarded and GDP impact.”
