Our Case Studies
Before the formation of the company, the Strathcona team were very active private investors for 30+ years. Below are some examples of how the same investment style was used successfully.
The Strathcona team have been invested in Bioventix from 2012, and witnessed the company grow from an initial valuation of £8M to its current value of over £200M. The company is a world leader in high affinity antibody development for the global IVD diagnostics market. It provides its technology to the world's leading diagnostic platform providers, such as Siemens, Roche, Abbott, and Beckman Coulter. It's antibodies are used in a significant proportion of the world's vitamin D testing. It is also a leading provider of the high sensitive Troponin assay for detecting heart attacks.
The company has repeatedly demonstrated an exceptional financial performance, with operating margins over 75% and a ROCE exceeding 70%, aided by very high levels of annual recurring royalties. The company is based in Farnham, UK, and continues to grow its business though the development of new assays for diagnostics tests, including Alzheimer's, new heart biomarkers, cancers, etc
Biotage AB is a Swedish quoted company that develops and sells systems, consumables and services in the field of life sciences. Its customers include pharmaceutical and biotechnology companies, companies within the food industry and academic institutions. The Company offers systems and services within three areas: analytical chemistry, organic chemistry and industrial resins. Biotage’s offering within analytical chemistry consists of consumables with related applications to extract selected substances from various types of samples. The Company’s offering within organic chemistry includes products for pharmaceutical development based on both small molecules and peptides and its offering within industrial resins is composed of polymer-based resins and research services that lead to the development and manufacture of polymer-based materials.
The company aims toderive 50% of its turnover from consumable spares and chemical reagents. The company has operating margins of circa 19%, and a ROCE of 20%, and has been growing earnings at 25% for ten years. The Strathcona team members bought their first holdings at 10 SEK in 2012, and the shares price, and the value of the company have grown substantially as the company has improved margins, ROCE, and increased recurring revenue to make up over 50% of the business.
EKF Diagnostics Holdings plc is engaged in developing, manufacturing and supplying of products and services into the in-vitro diagnostic (IVD) market place. The Company manufactures and sells diagnostic instruments, reagents and certain ancillary products. The Company's point-of-care range includes hemoglobin analyzers, HbA1c analyzers and glucose analyzers for use in the screening, monitoring and diagnosis of patients, as well as rapid tests for pregnancy and common infectious diseases. The Company's Central Laboratory division includes a range of products for use in both large and small laboratory facilities. Its subsidiary, EKF Life Sciences, provides bulk diagnostic enzyme manufacturing and fermentation services. EKF Life Sciences specializes in producing enzymes, including Salicylate Hydroxylase and Beta-Hydroxybutyrate Dehydrogenase.
EKF is probably the largest independent provider of POC diagnostic instruments in the world, with a large installed base, and providing over 76 million individual patient tests in 2018.
The company over expanded in 2015, and a failed acquisition required EKF to seek an emergency fund raising. The Strathcona team invested at 10p, seeing the inherent value within both the clinical chemistry business, and the strong diagnostic instrument installed base.
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Since 2016 the business has been very successfully restructured, and the shares have recovered from the 10p level, as the management team has improved productivity and margins, as well as adding new revenue streams and generated additional value by spinning out a new company RenalytixAI.
Eckert & Ziegler Strahlen und Medizintechnik AG is a Germany-based provider of isotope technology for medical, scientific and industrial use with focus on cancer therapy, industrial radiometry and nuclear-medical imaging. The Company operates through three segments: Radiation Therapy, Isotope Products and Radiopharma. The Radiation Therapy segment operates through Eckert & Ziegler BEBIG and produces and distributes medical products for the treatment of cancer using brachytherapy. The Isotope Products segment provides sealed and unsealed radiation sources for medical imaging, industrial gauging, measurement and analysis, reference, calibration and environmental monitoring sources and solutions, as well as bulk radioisotopes for pharmaceutical, therapeutic and industrial product manufacturers. The Radiopharma segment specializes in molecular imaging and nuclear medicine, and supplies various radiopharmaceuticals, radiochemicals and related equipment.
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The nature of the hazardous materials, and the skills require to handle them provides important competitive barriers, whilst the management team have done an excellent job of restructuring the business over the last few years.
The Strathcona team members first invested at 20 euro a share, and lightened the position as the market re-evaluated the company's prospects.
Medistim ASA is a Norway-based company engaged in the provision of medical equipment and technology. It develops, manufactures and distributes medical devices primarily for cardiac and vascular surgery. The Company provides intra-operative standard control applications designed to verify and document quality during surgery. Its product portfolio comprises systems, such as ultrasound imaging systems VeriQ C and MiraQ, as well as probes, which offer Transit Time Flow Measurement (TTFM). The Company’s activities are divided into four business areas: lease of equipment within cardiac surgery, capital and consumable sales within cardiac surgery, sales of electronic stethoscopes and distribution and sales of third party products.
The company derives strong recurring revenue from the sale of its medical probes from its installed base of instruments. Medistem is a great example of a company providing highly cost effective solutions for the health care industry, that also provide better clinical outcomes.
The company generates excellent return on capital employed, and high operating margins, with a growing addressable market, with an opportunity for Medistem to further penetrate cardiac and vascular surgery, particularly in the US.
