22/02/2016

Diurnal's AIM listing strengthens Wales medtech sector

In December last year, Diurnal completed a successful £30m IPO on AIM. The Cardiff based company, which develops innovative approaches to drug delivery, became the third company in Finance Wales’ technology ventures portfolio to be listed on AIM. Diurnal follows in the footsteps of MedaPhor and Q-Chip, which listed following its acquisition by Midatech. Rich in IP, these fast growing businesses have raised around £67m in the last 18 months, and crucially have created high-calibre jobs in the region.

Finance Wales was a cornerstone investor in Diurnal, making a seed investment in 2009. “It was our investment that first attracted this impressive company to Wales,” says Melanie Goward, deputy fund manager in Finance Wales’ technology ventures team. “It is a significant milestone for Diurnal, and another significant milestone for ourselves. I am confident it will inspire more companies in our growing technology ventures portfolio to follow Diurnal’s example, and aim high.”

Diurnal’s two leading product candidates are in, or expected to soon commence, late-stage clinical development targeting diseases of cortisol deficiency. Dr Martin Whitaker, CEO of Diurnal, is certainly aiming high: “Our vision is to become the world’s leading endocrinology speciality pharma company, targeting under-served patient needs in chronic hormonal diseases. We have identified a number of such needs, which we estimate represent a combined market opportunity of more than $11bn.”

The market for the drugs is centred in Europe and the US, and Whitaker says they will build a cost-effective, focused sales and marketing operation, once the products are approved.

With seed and early stage capital in short supply since 2007, Goward says such capital has been available in Wales for some time. The European-backed Wales JEREMIE Fund was launched in 2009, and subsequently the Welsh Government launched the Wales Technology Seed Fund.  

“These two funds have had a real impact in Wales, enabling us to make seed and series A investments in over 50 innovative technology ventures,” says Goward. “We have also provided follow-on capital to help these businesses to scale up.”

Finance Wales’ capital has also boosted co-investment levels - which stood at £56.2m in the last financial year – with interest coming from investors outside the principality. Pentax Medical joined in on Creo Medical’s most recent funding round, for example.

 “Over the years we’ve built up a strong co-investor network,” says Goward. “But over the last year, we’ve seen interest from angel, corporate and institutional investors rise significantly.”

 “We are building a technology ventures portfolio with real strength and depth,” she adds. In life sciences, for instance, the technology ventures portfolio has companies working on new approaches to wound care, diagnostics and imaging, as well as developers of medical devices, IT systems and pharmaceutical manufacturers.