Hibergene CEO and co-founder Brendan Farrell. Image: Jason Clarke
For Medtech Week, we spoke to CEO Brendan Farrell about Hibergene, his sixth foray into medtech entrepreneurship.
Medtech represents one of the biggest areas for tech entrepreneurship and few people realise that Ireland has a considerable track record in the field. One of the leading lights of the indigenous medtech industry is Brendan Farrell, former CEO of Trinity Biotech and now co-founder and CEO of Hibergene Diagnostics.
This is Farrell’s sixth time heading up a medtech start-up and he is in the process of raising up to €14m to prepare Hibergene’s technology for FDA approval in order to access the vital US medtech market.
‘One thing you learn as you do more start-ups in medtech is that everything takes longer and costs more money. I know it sounds like a cliché but it is true’
– BRENDAN FARRELL
Hibergene develops, manufactures and markets rapid-diagnostic tests. Using the tagline ‘Saving Time, Saving Life’, Hibergene’s technology can, for example, diagnose meningitis in less than one hour thanks to innovative, real-time results in software. This compares to traditional ‘culture’ methods that need to be sent to a laboratory and can take between 48 and 72 hours.
“I was with Trinity Biotech for 14 years and left in 2008. I was contacted by my business partner and former CFO Peter Kidney. His brother Joe, a respiratory physician in Northern Ireland, had learned of a prototype test for meningitis that had been invented at Royal Victoria Hospital.
“We studied the technology and we were amazed by its speed and accuracy as well as its simplicity to operate. Meningitis is a critical disease and a child can catch it within an hour of admission to a ward and the mortality rate is very high.”
Finding cause, not cure
Unlike pharmaceuticals where a blockbuster product can generate billions in potential revenues, Farrell explained that to succeed in the diagnostics business, you need a portfolio of products.
Hibergene has developed a broad array of diagnostic tests and is targeting the global market for molecular diagnostics, which is valued at $5bn a year and is growing at rates of 12pc to 15pc every year.
“In 2010, Joe, Peter, myself and two scientists from the Royal Victoria Hospital formed a business and we licensed LAMP technology from Eiken Chemical in Japan.”
Forming a business while Ireland was in the grips of an economic meltdown wasn’t the best timing but the founders stuck to their guns and, in 2014, raised $2.1m from private investors along with Enterprise Ireland and Kernel Capital in Cork.
“That round enabled us to hire our first staff, including CTO Gary Keating and head of QA, Seamus Gorman. This enabled us to take our prototype out of Belfast and industrialise it. We put it into a format where it was capable of being shipped around the world without going off, and stabilised it to be stored at four degrees centigrade.”
Very quickly, two products – HG Meningococcus and Group B Streptococcus – were developed. They were soon followed by a third (Clostridium difficile) and a fourth for Mycoplasma pneumoniae, the same virus that afflicted Hillary Clinton on the campaign trail in 2016.
Hibergene has since raised a further €7m to bring the company where it is today.
“We are now at a stage where we have a suite of products, and they all addressed market opportunities that were single targets. We have moved into a new area of technology called multiplexing, which allows us to detect more than one disease at a time.
“In the first quarter of next year, we will bring out a test for influenza A and B as well as tests for diseases that afflict pregnant women, as well as tropical diseases like Dengue fever, which affects 400m people globally.
“At the current rate, we are releasing three new products a year.”
All of Hibergene’s tests are conducted via a little machine called the HG Swift, which acts as a kind of incubator reader. “The chemical reactions that are done are done at 65 degrees centigrade by heating up the reagents.”
The company resells its technology and diagnostic tests through independent distributors worldwide.
“To date, we have found 37 distributors across the globe. Our business model is not to sell direct, but through independent distributors.”
Currently employing 18 people, a new €14m funding round – consisting of €5m in new equity and the balance in long-term debt – is currently being developed.
This will enable Hibergene to begin direct manufacturing and focus on achieving pivotal FDA approval. “This would enable us to create more jobs in Ireland, absolutely.”
Farrell said that the plan is to grow the business to capture a decent slice of the $5bn diagnostics industry, and exit options include a potential trade sale in the future.
“This is the sixth early-stage company that I have been CEO of, and it’s no wonder I have a grey moustache because six is five too many!
“One thing you learn as you do more start-ups in medtech is that everything takes longer and costs more money. I know it sounds like a cliché but it is true.”
He explained that the total spend on healthcare diagnostics could represent 2pc of overall healthcare spend but influence 70pc of decisions made in hospitals.
“It is a very important area of healthcare and we are providing results in a very critical situation where time is everything.
“All our tests return a result within one hour and, as a result, a physician or a clinician has an opportunity to save lives.”
So, sixth time round, Farrell is on the road to creating an iconic, homegrown medtech company.
“We are building momentum and getting on with it.”
