BUSINESS IN WALES
THE chief executive of one of Wales’ leading life sciences firms, Julian Baines of EKF Diagnostics, says the sector has an opportunity to have a much bigger impact on the economy, providing the Welsh Government reaches out more.
Penarth-born Mr Baines said the diagnostics sector, often seen as the poor relation to pharma, has never been in better shape with its immediate testing capacity for diseases such as diabetes and other underlying conditions that can make people more susceptible to Covid-19.
In April EKF, which has a market capitalisation of more than £200m and a global workforce of 320, secured a major order to provide the NHS in England, through Nottingham-based Source BioScience, with Covid-19 testing kits.
The sample collection Primestore MTM device, owned by US firm Longhorn Vaccines and Diagnostics, is the first time the product has been manufactured and distributed in the UK.
EKF are now capable of producing 12,000 testing kits a day from a new manufacturing line in Penarth where it is also creating new jobs.
However, despite reaching out to Public Health Wales and the Life Sciences Hub Wales, offering to supply the product in Wales, so far that offer has fallen on deaf ears.
Mr Baines said: “It is a very tough gig for the Welsh Government, but I think EKF could genuinely help.
“We know a lot of people. We have access to major hospital groups in the US which we could talk to with the Welsh Government and try and help.
“There are other life sciences companies like BBI and Creo Medical based in Wales, that could also help too.”
Undeterred by the lack of engagement, he has now contacted the Welsh Government’s business support body BusinessWales on the sample collection kit offer.
He added: “It is clear that we need a strong testing programme ready for flu season and a potential second wave of Covid-19 – as thousands of people are going to start presenting with symptoms that could be flu or coronavirus.
“We have a sample collection kit that was designed in 2006 specifically for pandemics, it’s FDA approved and CE marked, and can be used to collect both flu and Covid-19 samples in one kit.”
The kit immediately neutralises infectious samples and doesn’t require refrigerated transport so it’s safer, cheaper and easier to use than standard collection kits.
Mr Baines added: “We have a product, made in the Health Minister’s [Vaughan Gething] own constituency, which could be critical for the people of Wales as we approach flu season and as lockdown restrictions relax.
“I think that with Welsh Government support we could roll this out nationwide to support safer and more efficient testing.”
Mr Baines said that EKF spinout
firm Renalytix AI, although most of is focus is in the US, could also play more of a role in Wales.
The chief executive said: “If you take Renalytix one of the biggest issues with Covid is kidney failure and they have been utilising Renalytix at Mount Sinai Hospital in the US because of a certain percentage of patients that go on to dialysis from Covid are staying on dialysis and they are not recovering.
“There are other opportunities we could share with just Wales that are coming out of the US, but I don’t know how to speak to anyone of seniority in the Welsh Government as we just hit a bureaucratic brick wall each time.”
Penarth-born Mr Baines has over 20 years of experience within the life sciences sector, having acquired EKF Diagnostics in 2010 through a reverse takeover onto AIM.
EKF specialises in manufacturing devices to test for conditions including diabetes and anemia
He is upbeat on the outlook for EKF. Mr Baines said: “We did a trading update recently and we were quite cautious with that, but I think that EKF is in an incredibly strong position to help the country.
“We just happened to be a company where we have never had to worry about furloughing and we haven’t had to worry about staff cuts, and in fact we are increasing staff.
“That is just partly luck as if I had 25 bars or restaurants I would have been impacted, but I happen to be in the right industry and we have the right products.
“So EKF is getting stronger and this year will probably be a record year for us.”
The vast majority of tests produced by EKF are for diabetes and haemoglobin. Mr Baines said: “People with diabetes are at high risk of catching Covid-19.
“So it is kind of defensive on one side and growing on the other with Covid.
“Our balance sheet shows we have £14m in cash.
“We were in a position where that isn’t luck and if we hadn’t had this great upside we would have been in a position to be fine anyway.
“That’s because we have a strong balance sheet and we put a lot in place after what happened to us in 2015 [a proposed takeover that didn’t materialise and tough trading conditions] to safeguard the business and employees and everything going forward.
“But yes we are in a very extremely strong position at the moment.”
It is scheduled to pay its first dividend in December.
He said: “We were going to pay it earlier, but we are in a strong enough financial position to pay that. So we are a dividend paying business.”
For diagnostics he said there has never been a better time. Mr Baines said: “I think the world has changed on diagnostics.
“All of a sudden where it was the poor man’s pharmaceutical, and nobody talked about diagnostics, that is no longer the case.
“So the whole trajectory of diagnostics has changed and this is probably over the last two to three years so it pre-dates Covid.
“So the whole world is sitting up and paying attention to diagnostics all of a sudden. If you can identify, using Renalytix’s technology, one patient who is going to crash into to kidney dialysis, that is not only saving a £100,000 a year it is also saving a patient from being in a chronic position with a shortened life span.
“I think [diagnostics] is going to be one of the premier life sciences businesses going forward globally, and I think everyone is waking up to that.”
He said since the tragic death of Prof Chris McGuigan and the input of biotech serial entrepreneur Sir Chris Evans, the Welsh Government life sciences’ strategy has lost impetus, but believes it can be rekindled if it reaches out more – although the Cardiff Capital Region has identified medtech as a priority cluster sector.
Mr Baines said: “It is incredible how successful Creo Medical have been then you have got BBI.
“We are tiny on the Welsh scene, but we are big in the rest of the world.
“There is a core in Wales to come together to try and do more things.
Creo will have many contacts globally and 65% of our business is in the US.
“It’s similar with BBI. This has been built 20-years with lots of contacts and knowledge and I have never been anti-sharing.”