Connexicon In Rude Health
Angel investor syndicate Irrus Investments struck paydirt in February 2023 when its eightyear-old €1.15m investment in Connexicon Medical was turned into a significant gain when the company was acquired by UK peer Advanced Medical Solutions Group plc (AMS).
AMS paid initial consideration of €7m, and the deal provided for deferred consideration in cash of up to €18m, dependent on the achievement of R&D, regulatory and commercial milestones, mostly centred on US Food and Drug Administration approval of Connexicon’s innovative surgical adhesive, Indermil Flexifuze.
Connexicon is the brainchild of Padraig Leamy, who cut his teeth in the world of specialised high-tech medical adhesives with Henkel, best known for Loctite and Sellotape. Henkel had diversified into adhesives for specialised bandages and attaching electrodes and other diagnostic devices to the body.
Connexicon took this a stage further with the development of a novel surgical adhesive for operating theatre and ER settings. Forget stitching folk up after an accident or an operation, use glue instead! Connexicon’s website rates Indermil as superior to AMS’s own Liquiband surgical adhesive which has already gained a foothold in the US market.
Leamy was 42 years old when he jumped out of the corporate world for his Tallaght start-up in 2014. Also in at the start were directors Éadaoin Ledwidge and Martin Brennan, as well as David Chapman (77), the former managing partner of Mazars, where he headed up the corporate finance division.
Connexicon turned out to be a pleasing post-Mazars activity for Chapman, who owned a 6% stake in the business. Filings suggest Padraig and Marta Leamy owned 18.1% of Connexicon Medical, Éadaoin Ledwidge 14.9%, Martin Brennan 10.7%, and the Irrus syndicate 42.9%. Business development director Danny Heungens (57), formerly of CR Bard, secured a 9% stake when he joined Connexicon in 2017.
The AMS share price peaked at the 270p in the wake of the Connexicon deal. However, investor confidence was dented by analysts’ negative reaction to the rationalisation of the AMS US distribution network. In November, the AMS share was trading closer to 210p.
Another important player in the Connexicon journey was chairman Cormac Kilty, a respected biochemistry academic and entrepreneur who has several successful start-ups under his belt.
According to AMS, Connexicon had turnover €1.6m in 2022 and generated Ebitda of €300,000. Connexicon Medical Ltd’s filed accounts for 2021 disclosed €5.6m equity invested and bank and loan note debt of €840,000. The equity capital included €3m in preferred shares. In 2019 the company received €2m investment from an EIIS fund managed by Davy, while over the year taxpayers back the enterprise with €1m funding from Enterprise Ireland.
Product development was capitalised as an intangible asset, with €2.7m invested since the venture commenced.