News

US investment in spin-out company

(27 September 2005)

A US technology investment company has put nearly 2 million dollars into a business spun out from research at Durham University.

New York-based Amphion is backing Durham Scientific Crystals (DSC), formed in 2003 to commercialise technology developed in the Physics Department, with a 1.8m dollar stake.

DSC produces radically improved and more cost effective semiconductor materials for detectors used in medical, security and defence digital x-ray imaging. These materials have the potential to revolutionise the medical x-ray imaging market, as well as dramatically improving the screening of baggage in airports and railways, and enabling the manufacture of in-demand handheld scanners. DSC has a strong and growing IP (patent) portfolio.

DSC had a strong founding team led by Dr Arnab Basu, as Chief Executive. It includes Prof Brian Tanner and Prof Max Robinson, who had considerable experience in high tech start up ventures with previous IPO successes, and Dr Ben Cantwell and Dr Andy Brinkman with international expertise in the technology and related fields.

The diagnostic imaging market is a $70 billion industry in the US, representing approximately 10% of all expenditures for medical care. X-ray based systems dominate the market in terms of growth and revenue, with over a 50% share, so the transition to digital X-ray imaging represents enormous market potential.

Amphion has focused principally in the US and this investment in the North-East of England marks Amphion’s first investment in any UK based university spin-out since their recent London AIM flotation. Amphion’s senior management team however played a key role for Medisense, one of the UK’s most successful University spin-outs, sold to Abbott for $900 million in 1996, and based on technology from Oxford and Cranfield Universities. Amphion will be seeking a few further highly select UK investments and have now opened a UK office and recently floated on the AIM market in London.

Amphion's investment in DSC represents the first fully external round of funding, after an earlier angel funding round by members of the management team. Other shareholders are Durham University and DSC's founders. This investment will allow DSC to further develop its technology and patent portfolio, building up its management and marketing teams. Amphion's participation will also accelerate access to key US markets.

DSC's initial products are in the area of Cadmium Telluride based x-ray detectors. Dr Basu said: "Cadmium Telluride has long been accepted as the electronic x-ray detection material of choice in many key applications. We are the first in the world to develop a process for producing predictably high quality and large area material for detectors with high yields and greatly improved production economics. Our unique technology arrives as our target international markets are moving to digital detection.”

DSC is situated in the purpose-built NetPark Incubator facility at Sedgefield in County Durham, an initiative of County Durham Development Company (CDDC).

Professor Max Robinson, a substantial angel investor in DSC and a recognised national expert on x-ray imaging, said: “The Company has made rapid progress in a relatively short time; the support we have received from a variety of agencies including Centre of Excellence for Nanotechnology, Micro and Photonic Systems, One NorthEast, CDDC and Regional Technology Centre North, in the North East has helped this tremendously. CENAMPS has played an important and vital role in the early stages of this deal.”

Richard Morgan, CEO of Amphion Innovations PLC, added: "DSC is illustrative of the high quality of business that can be created from IP in UK Universities when working with the right development partners. The detector sub-systems markets that our technologies can address will alone be worth $2 - 3 billion by 2010. We are excited about this investment in DSC based in North East of England and will be happy to expand our regional portfolio”

Dr Mike Pitkethly, Chief Executive of CENAMPS said “CENAMPS is delighted to see the fruit of its extensive work with DSC and Amphion over past months convert a traditionally US focused investor in high tech start ups to an active UK investor in DSC and the North East of England. DSC is testament to the world-class and commercially driven scientific know-how available through collaborations in the North East of England.”

Chris Pywell, Head of Innovation, Industry and Science at One NorthEast, said “We have worked with this project, and now company, for a number of years, both directly and through our Centre of Excellence Cenamps. We are delighted with the progress made and excited by the company‘s prospects. Companies like DSC are in many ways the future for North East England. We also believe that the interest from Amphion firmly reflects our ability to build a competitive science-based economy in the Region.”

Stewart Watkins Managing Director of CDDC which owns and operates the Netpark Incubator in which DSC is based said “Its tremendous news that DSC is now entering an exciting new phase in their growth and expansion. Their success underlines the role we have been able to play in helping them along that road.”

For more information visit:
www.amphionplc.com and www.dscrystals.com