Repregen's CSO Prof. Molly Stevens was interviewed by Radio 4 this morning regarding regenerative medicine.

Repregen, a Longbow investment, is a developer of smart materials that accelerate bone tissue growth.

Click here to listen to the discussion on BBC 4 News Today.

Other recent news from Repregen:

Molly Stevens: Getting the body to grow spare parts - Guardian Online

For more information please visit www.repregen.com

On 3rd June Biotronics 3D launched the latest version of its medical imaging technology; '3DNet Medical'. This technology is delivered through 'the cloud' offering freedom to clinicians and patients to access and interact with medical imaging from any location and any computer connected to the internet. Please click on the screen below to see a video of the launch presentation

Over the next few weeks I will be publishing a series of blog posts explaining the rationale behind the investments in the Longbow portfolio.  As some of the investments were first made several years ago, I thought that it would be interesting to illustrate the developments and changes which have occurred since investment measured against our intial assessments and the company's own milestones. There is no better place to start than at the beginning, our first investment; CyDen Ltd a developer of light based aesthetic products.

CyDen develops and markets a range of devices for aesthetic and medical treatments based on 'Intense Pulsed Light', or IPL.  Rather than use up this post describing this in more detail, check out this brief summary.

So what made us invest in CyDen? 

Let's start with a high level view.  At the time of investment in 2005, the market for aesthetic procedures had been growing strongly over the previous few years.  Technology emerged in the 90s to take advantage of our better understanding of the ageing process, for treatments such as permanent hair removal and wrinkle and cellulite reduction.  However such 'professional' treatments performed in spas or doctor's surgeries are expensive.  CyDen's technology promised to reduce the cost of professional equipment significantly and thereby reduce the cost to the consumer.  We felt that it could drive mass adoption of these procedures.  Furthermore, they had a roadmap that promised consumer products. 

Even in 2005, an affordable consumer product was considered something of a holy grail.  Large companies such as P&G and J&J were partnering with professional aesthetic equipment manufacturers to develop home-use devices.  Our view at the time was that if they struggled to make salon equipment more affordable ($10,000s) then they were a long way from making home use equipment affordable (low $100s).

To summarise, CyDen had developed technology that would make products affordable for the mass market when others were struggling to achieve this, while many of the relevant consumer product companies had declared their interest.

As with all early stage investments, we need to believe that we are backing the right team.  Cyden was founded in Swansea, which for those that don't know, is a world renowned centre of expertise in the use of lasers and light for medical and aesthetic treatment.  The primary reason for this is the presence of the charming and energetic Professor Marc Clement of Swansea University (now Vice Chancellor of the University of Wales).  He and a number of his students have pioneered this field and a cluster of businesses sprung up there as a result.  Marc joined forces with a talented electrical engineer, the late Jan Simonsen, regulatory expert Mike Kiernan and Kevin Smith.  

The plan was to develop a low cost professional product and leverage the income and brand into launching a consumer product.  Ron Petersen, a Longbow partner was recruited as CEO to make this happen.

After four years, how did our investment thesis hold up?

There have been successes and disappointments.  The disappointments first.

• There were too many vested interests downstream in the supply chain so that it proved too difficult to deliver a substantially cheaper product to the professional end user.  Despite a technology advantage, it was therefore coming from behind established competitors without any significant price advantage.  Sales grew rapidly to over £2.5m per annum but never scaled much higher.  In 2009 CyDen licensed its technology to a competitor in return for a sales royalty.  As a consequence, the consumer product was developed more out of investment funds than surplus cash flow.
• Jan Simonsen, the genius behind the iPulse technology sadly died.  Although he had already achieved a working home-use product as well as a further pipeline of new technology for successor products, his absence is keenly felt.

Despite these setbacks, our projections of the market potential were correct and CyDen has achieved some significant successes.

• A recent report forecasts that home-use aesthetic devices will grow to a retail value of $1.3bn per annum by 2013. 
• Large FMCG companies remain interested in this space.  Unilever Ventures saw the potential and invested into CyDen during 2008 and 2009.  Those early development deals that I mentioned above are yet to produce anything viable.
• CyDen was the first company to achieve the holy grail of an affordable, effective and safe consumer hair removal device.  It was first to market in February 2009, sold exclusively under a Boots brand as 'Smooth Skin' iPulse in the UK.  Despite no sales and marketing spend, sales significantly exceeded Boots' expectations.
• The product achieves permanent hair removal after a regime of treatment over 3 to 4 months.  Neither Philips nor Remington, who have subsequently launched consumer IPL products, can make that claim as their products require a continuous treatment to suppress hair growth rather than eliminate it.
• iPulse is available in leading retailers in the UK (Boots), Spain (El Corte Ingles), Germany (Schlecker) and Japan
• CyDen is expecting to be ready to launch a new skin rejuvenation product during 2011. The skin rejuvenation market is substantially bigger than the hair removal market.

What is the future for CyDen?

CyDen has recently received further investment to enable it to proactively raise consumer awareness and promote its products.  Competition is hotting up with Philips and Remington launching products; albeit at a higher price point.  We believe that they are inferior products but we cannot underestimate the power of the brands.  As it stands, CyDen is the market leader in the UK as it is ahead in terms of sales through Boots, but there is much more to do.

Marc now heads up the CyDen Institute of Light Technology and has stepped down as Chairman to be replaced by Chris Outram, an experienced executive and founder of OC&C, a leading management consultancy business.  These moves reflect the changed nature of the business.  It is no longer a company in development, it is a company in a rapid growth phase.

FDA regulatory approval is awaited, which will permit iPulse sales into the vast US market.  Mike Kiernan, one of the original founders and highly experienced regulatory clinician, has done an excellent job navigating the FDA and we are certification is expected later this year.  With FDA approval, we know that the large global personal care companies will be taking a closer look at CyDen and this is expected to produce a range of exciting opportunities for the Company.

For the next instalment of the 'Why we invested..." Blog series I will be reviewing Ambicare Ltd, a developer of a range of light emitting devices for the treatment of skin conditions such as acne and skin cancer.

Join the Discussion - Our blog is not designed to be a one way street. We encourage our readers to comment on posts they are interested in, ask questions and suggest topics for upcoming blogs.

Don't want to post a comment? Feel free to email any questions you have on this blog or the blog series please email them to erudd@longbow.co.uk.

CyDen’s marketing strategy is to be the most recommended brand in the category, and as such identified ‘Winning on the web’ as a key strand for communications. To achieve this, CyDen is running an ambitious social media campaign for iPulse through Grappa PR and Communications.

Starting at the beginning of April, the campaign has already generated impressive results in a short space of time, with many of the most influential beauty bloggers and vloggers (video bloggers) reviewing Boots Smooth Skin, powered by CyDen’s iPulse technology. This in turn is generating buzz, word of mouth and recommendations about the product among consumers online, increasing brand awareness and driving sales in-store and via http://www.boots.com/en/Boots-Smooth-Skin/.

Some of these influential blog sites for beauty and fashion-conscious females have active subscriber numbers close to 90,000 people. That’s a bigger audience than many mainstream women’s magazines. Factor in the high levels of interactivity that exist among subscribers and site visitors – many of whom are actively seeking out information and advice - then it is easy to see why authentic endorsements of Boots Smooth Skin are proving so valuable. For example,Tacky Blue Eyeshadow is currently charting her progress with Boots Smooth Skin. Beauty Scribbler and Lollipop 26 are equally as enthusiastic – and they are just the tip of the iceberg.

See Left: Screen shots of Tacky Blue Eyeshadow, Twitter and Facebook.

Key beauty websites are also being targeted. Editorial coverage has been confirmed on leading sites such as handbag.com and sofeminine.co.uk, which each have audiences in excess of 1.5million. Grappa’s social media campaign also includes Twitter, Facebook and online forums, which together are successfully delivering an audience of 25-45 year old women. Mainstream press interest is also being carefully managed. Influential titles such as the Daily Mail and Grazia have been primed to encourage their readers to make Boots Smooth Skin an essential part of their beauty regime. And who can blame them? iPulse technology is the only safe, painless and effective way to achieve permanent unwanted hair removal.

The social media campaign will gather pace in the UK - while after dipping its toes into the digital waters of Spain earlier this year, CyDen is planning a bigger splash. You can find out more by contacting Allisyn James at CyDen.

Advisers are slowly waking up to the realisation that an investment in an EIS scheme is a great way of IHT planning. The investment falls outside their client's estate two years after investment; there's nothing else on the market that can deliver that much relief in such a short time span.

In this, the last part of the Questions and Answers Series, Julian Hickman aims to answer a question recently posed to him by IFAs relating to the EIS scheme and the IHT opportunities associated with it.

Question 5: I understand that an EIS investment can be used as part of IHT planning for a client. How exactly does this work?

Julian's answer: Strictly speaking, it is not EIS that offers IHT relief, but direct investment into unquoted companies that qualifies for 100% Business Property Relief, once they have been held for 2 years. However, as most EIS investments are made into unquoted companies, an EIS investment generally means the investor will be entitled to IHT relief. There is no limit on the amount that can be invested into an EIS Fund and subsequently gain IHT relief. Effectively this means that an investment into an EIS fund qualifies for 100% BPR once they pass the second anniversary of the date of investment. It is worth just pausing here because EIS funds are NOT like Unit Trusts which are usually fully invested at the point at which you invest. An EIS fund starts with no holdings and begins investing the moment it closes/you subscribe. In the case of an Approved EIS fund, it can take up to 10 months to complete the fund's investment. For an investment of 750,000 full IHT relief will be achieved at something between 2 and 3 years from the date the investment is made.

This is the last instalment of Julian's IFA Questions and Answers session for this tax year but Julian will be back again in April answering more questions on the topic of EIS and Venture Capital investment. Watch this space....

If you have any questions relating to EIS and want to be part of future Questions and Answers series' please email them to nrobson@longbow.co.uk or post a comment below.

Bioceramic Therapeutics has changed its name to Repregen.

The company has also recently been featured in Science Business Online. Please click here to read more.

This year interest in our EIS funds hasn't just been limited to income tax opportunities. A number of advisers have clients with capital gains that they had to pay at 40%. For these people, the opportunity to have this returned to them whilst they are invested in an EIS scheme, and then, when they come to repay it, to only have to do that at 18%, is too attractive to miss.

In this, the second part of the Questions and Answers Series, Julian Hickman aims to answer questions recently posed to him by IFAs relating to the EIS scheme and the CGT opportunities associated with it.

Question 3: An EIS fund offers capital gains tax opportunities too. Can you describe these?

Julian's answer: Subject to the 3 year qualifying rule, an investment in an EIS fund will be free from CGT. Unlike income tax, there is no maximum limit o the size of an investment that can be made and which wiill be 100% free of CGT. An additional element of relief is Deferral Relief. When an investor makes an EIS investment, he may defer an gain crystallised in the 36 months prior to the point of investment - or 12 months into the future - and hold onto this deferred gain until he is finally out of the EIS fund.

Question 4: Can you give an illustrative example of how this deferral could benefit an investor?

Julian's answer: Taking a recent example, a client makes an investment of £150,000 into an EIS fund in April 2010. In June 2007 he sold a share portfolio and paid a CGT bill for 40% of that sales; £25,000. He can claim that payment back from HMRC - in addition to receiving his income tax relief - and hold it until he exits from the EIS fund, at which point he must pay the deferred gain back to HMRC at the prevailing rate, which is currently 18%.

If you have any questions relating to EIS investments and would like to be part of the Questions and Answers series please email nrobson@longbow.co.uk or post a comment below.

Julian Hickman, Longbow Partner, has recently been featured in Investment Adviser writing on EIS investment. Click here to read the full article on FTonline.

Ambulight was also featured on Australia's Ten News. Click here to visit their website.

Ambicare's Ambulight device, a light-emitting sticking plaster which treats skin cancer, has been reviewed on Sky News. To read more on the product and watch clips please visit Sky.com.