Cambridge Cognition might have taken its time to find its feet but chair Dr Jane Worlock says its ten-minute memory test to help diagnose Alzheimer's disease could open doors in the huge US healthcare market
If you're an investor in a university spin-out, your reserves of patience often need to be as deep as your pockets. With their tendency for repeated cash calls, business model rethinks and management overhauls, it must be hard to keep faith in a policy of 'jam tomorrow’ when indications like those suggest a company is in a fix today.
Like many of its peers, Cambridge Cognition, a university spin-out based on 25 years of research into brain function and psychology, has taken a while to find its commercial feet. Its investors, however, are now probably feeling more comfortable than most.
“Like a lot of small companies, particularly technology firms, we went through a period of loss,” admits chairman Dr Jane Worlock. “[Our investors] have been patient enough to realise that these things take time to build up.”
Those investors will be hoping that the company’s launch last week of an iPad test, which it says will help GPs objectively pick up the early signs of Alzheimer’s, could mark a leap forward.
Its evolution from 'Cantab’ software, first developed by Cambridge University scientists to test brain function in 1986, to a commercial business, selling first to academia and then to drugs companies, has been a slow one.
Although being rooted in academia is associated with a rocky road to commercialisation it also has its advantages; before the company started selling to drugs companies, it had the credibility of being used in a raft of scientific research. “We’ve got 800 independent, peer-reviewed papers using the Cantab technology in areas including Parkinson’s, Multiple Sclerosis (MS), Alzheimer’s and mood and depression. That’s the underpinning of our business,” says Worlock.
The software has also been used to measure everything from divers’ brain performance following decompression to the impact of sleep deprivation on astronauts, soldiers and pilots, but the business found a niche among drugs giants, which started to contact the company to access its library of research.
“If someone wants to look at a particular angle in MS, we’ll look at our bibliography and pull out however many papers we have. That gives them confidence in the technology and is the starting point for them working with us.”
Ten of the 12 biggest pharmaceutical companies are currently using Cambridge Cognition in 40 clinical trials for new drugs, spread across 170 countries. However, it was only thanks to changes it made in 2009 that it found a path to profitability.
“We were making a 'Rolls-Royce’ for everyone, which was far too expensive and slow. We realised we had so much information, that if we could direct our clients to taking off-the-shelf products that only needed some tailoring, that’s the way to go. We had some job losses, rationalised the products and we’ve been profitable ever since.”
Last year’s revenues of £4.83m, 60pc of which came from pharma companies, produced a pre-tax profit of £743,000. While turnover is expected to grow by 30pc this year, the company’s founders believe their software has applications far beyond its current uses, from clinical diagnoses, to food companies and even consumers. To get there, Cambridge Cognition set up an innovation unit that’s strictly separate from its core business,
“We cut off their internal communications,” says Worlock . “They’ve got their own coffee machine, their own clock and their own separate BT line. They need to be creative and innovative – we can’t have them sucked in.”
The unit’s first output is an app designed for Apple iPads and other mobile devices that Worlock believes has the potential to dramatically improve the early detection of Alzheimer’s and dementia. Last week, it was announced that a primary care trust would ask its GPs to trial the ten-minute visual memory test, which independent research indicates is 95pc accurate at distinguishing healthy people whose memory is in decline due to ageing from those showing the early signs of Alzheimer’s or dementia.
The trial, which is a precursor to a planned national launch next year, aims to tackle the time taken to deliver treatment and care for patients with memory problems, reducing the 80pc of Alzheimer’s cases the company claims are not currently diagnosed.
Pricing has yet to be announced but it should be straightforward to undercut the £1.50-a-go cost charged by the subjective, paper-based tests currently in use.
Simon Merritt, the company’s marketing director, hopes the combination of being able to offer both cost savings and a clinical benefit will speed up adoption by the NHS, which he says is notorious for being slow to adopt innovation. “Politically it’s a good thing for the NHS and the Government. We could be out there very quickly.”
The company has £1.5m of retained profits to invest in its expansion and is currently trying to raise further venture capital. Its core challenge, he says, is choosing between further product development and distributing what it already has.
“Our developers always come to us with ideas for apps we could be developing. There are 20 more where this came from and we could easily spend every year on a new product. You have to weigh up where to deploy – how fast and how focused?” says Merritt.
Worlock says the immediate focus should be on finding a partner to help the company distribute its memory app quickly, including in export markets. “Someone like, for argument’s sake, Glaxo could get sales material to every GP in the US in three weeks. For us to rent a salesforce would be horrendous and the wrong way to approach it. The mistakes other British technology companies and spin-outs have made is rushing into large markets without being probably capitalised, without the right level of distribution and without being able to understand the social dynamics.”
“We’re a classic Made in Britain, Silicon Fen company,” Merritt adds. “We’d love to be 'press the button, download the software that’s a distillation of our knowledge’ with someone else using their business model to make it happen.”