Dear , 

Sphere Medical is a dynamic company specialising in the development of innovative medical monitoring and diagnostic equipment.

Sphere’s products are used in a wide range of medical applications, enabling faster clinical decision-making and improved patient outcomes, whilst providing efficiencies that result in reduced healthcare costs.

Sphere Medical aims to improve patient care and reduce healthcare costs through supplying healthcare professionals with innovative, real time point of care diagnostic and monitoring products.

Point of care or near patient testing has had significant impact on the turnaround time for time critical tests. However, this has come at the expense of adding to the workload of front line care staff, taking them away from the patient at key times and can still involve significant wastage of patient blood. 

Proxima is a patient dedicated arterial blood gas analyser which supports rapid and frequent measurement without leaving the patient.

The Proxima system is operated using the dedicated bedside monitor with touch screen interface. Simple, clear routines guide the user through operating the system and patient results are displayed clearly at the patient bedside and can be electronically transferred for permanent record.

The Proxima Sensor is a disposable transducer integrated into the patient’s arterial line without interfering with blood pressure monitoring. When an arterial blood gas analysis is required, blood is withdrawn from the patient into the Proxima Sensor and a panel of analytes is measured to laboratory analyser accuracy. All blood is returned to the patient and results are displayed on the bedside monitor.

Proxima Sensor can be used for monitoring blood gases and electrolytes over a 72 hour period as many times as required.

The Team

Dr Wolfgang Rencken, CEO, appointed in February 2014, has a proven track record in developing and commercialising award-winning diagnostic and monitoring equipment and driving significant revenue growth. Wolfgang’s previous experience includes being CEO of MAQUET Cardiopulmonary AG, an international medical devices group and COO of Definiens AG. He also spent 15 years with Siemens AG where among other roles he was Vice President of Engineering in the Software Components and Workstations business unit. He holds a doctorate in Engineering Science, Oxford University and is the author of numerous patents and scientific publications in the area of robotics.

Matthew Hall, CFO, a chartered accountant with a degree in economics. He has expertise in all aspects of financial and corporate management and was most recently the CFO of IS Pharma plc, a pharmaceutical group quoted on AIM. He was closely involved in the merger of IS Pharma plc and Sinclair Pharma plc to form Sinclair IS Pharma plc. He has gained over 20 years of corporate finance experience in a number of leading organisations, including Hill Samuel Group PLC, Merrill Lynch, and Deloitte Touche Tohmatsu Ltd.

Dr Gavin Troughton, VP Business Development, is a co-founder of Sphere Medical and has over 20 years’ experience in the development and commercial exploitation of chemical sensors and related technologies, particularly relating to the medical industry. Previously, Gavin worked for a number of years at Zellweger Analytics and at Scientific Generics, where he worked in their business innovation function.

Ann Hardy, COO, has over 30 years’ experience in the Healthcare and Life Sciences industries, which includes 15 years medical device (all classes) experience. She is a commercially oriented executive committed to providing and delivering both operational and technical targets. A strong team leader and director, having operated at senior, executive board level for many years; she is an accomplished and determined professional with proven success in impacting both top and bottom line performance through leadership, motivation and management of multi-disciplinary teams, in major business and organisational change. Her previous roles have been as Global Technical Director for Sinclair IS Pharma and COO of IS Pharma prior to the merger with Sinclair, for which she was responsible for the project management of the Sinclair and IS company integration. 

The Investment Case

The company spun-out of Siemens in 2005 and has remained true to its initial development path although this has taken longer than hoped and already consumed almost £50m in capital. The company floated on AIM in 2012 and raised what was hoped to be its final capital requirement. However it has taken longer than estimated to commercialise PROXIMA. The first two versions, while working have not delivered benefit to gain commercial traction. However PROXIMA 3 looks likely to break that trend. The company already has a potential deal with Johnson and Johnson and sales will start in the coming months.

Following the series of commercial disappointments over the years the market capitalisation of the company before this funding was around £12m, with £6m of cash in the balance sheet at the end of 2014. The Arthurian and Woodford funds leading the deal have negotiated a 20% discount from the prevailing share price and with the EIS 30% income tax benefit our Opportunities investors will be making their investment at close to the cash value of the company. The £12m raised will give the company over 2 year’s runway with minimal sales. We would expect sales to start picking up towards the end of the year which is likely to start attracting interest from potential acquirers in what is an M&A rich sector. If the technology eventually proves itself and some commercial traction is achieved we might expect a trade sale in a 3-4 year period.

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