For the majority of projects this means attracting commercial investment into projects at later stages, for instance to enable clinical trials to be completed much sooner than donations would allow. RAFT has developed expertise in finding creative and innovative ways to attract this funding in a way that both delivers patient benefit faster and secures a future income stream to enable RAFT to carry out further ground-breaking research.
A good example of this is Smart Matrix Limited where RAFT was involved in creating a standalone commercial company which has raised £5 million to carry out clinical trials on Smart Matrix and advance its development. At the same time, RAFT retains both a shareholding in this company and the entitlement to a royalty stream which both will enable RAFT to carry on new research.
Other RAFT inventions that require substantial funding to get them to patients are planned to be commercialised and different models of how best to do this are being explored.
Smart Matrix® case study
RAFT Chief Executive, Leonor Stjepic, believes in running the charity along business lines rather like a social enterprise, so that the charity can become self sustaining in the future. A strong example of this is setting up Smart Matrix Limited in 2012. Smart Matrix® is a biological scaffold designed to speed up the healing process for large skin wounds. By establishing a separate company for this product RAFT was able to attract private investors who would benefit from any eventual sale of the product while RAFT retains the royalties that would translate into a steady income for the charity. Patients would also benefit from this invention many years sooner as a result . A win-win for everyone.
Smart Matrix® is a scaffold designed to help the skin regenerate itself without the need for skin grafts. It works by ‘encouraging the growth of skin cells and new blood vessels, critical to healthy inner skin formation and repair,’ mimicking the natural process of healing in the body, but with much larger wounds that the body cannot cope with itself. A scaffold that allows healing without the need for a skin graft would offer a significant advantage over currently used treatments.
Enterprise Investment Scheme
Getting Smart Matrix® onto the medical market, of course, involves clinical trials. Raft set up a separate company and made use of the Enterprise Investment Scheme, a government sponsored scheme that aims to encourage research and development by offering tax relief. To ensure continuity and minimise additional costs, Leonor Stjepic guided both RAFT and Smart Matrix as CEO from 2012 to 2016.
The new company planned around inward investment of £2 million over six months. Instead, they levered in £2.6 million in three months and £5.5 million in total, enough to launch their first clinical trial in 2014. Leonor says: “It wasn’t that I was surprised we could raise the money, we all knew we had a strong medical product, it was the speed and enthusiasm of people with no medical knowledge, but an understanding of how this could make a real impact on people’s lives.
Results of the first clinical trial
The results of the trial showed that Smart Matrix® regenerated the dermis (the inner layer of the skin), and also the epidermis, which could mean that no skin graft is needed. The time spent in hospital could be dramatically reduced, because only one operation might be needed.
Further clinical trials are now being started, with commercialisation on track for 2021. Annual sales could eventually reach £100 million.