Showing the way to Excell-ence; Times are tough for the tech sector

When Stuart Mead, managing director of Excell Biotech in Livingston, describes his two-and-a-half years in charge of the company as "a walk in the park" there is an all-too-visible glint in his eye.

Coming from a blue chip company background, having held sales and marketing posts with the likes of Amersham International, ADL, Kodak Clinical Diagnostics and Johnson and Johnson, Mead has relished the challenge of running a small but growing company.

He has been involved in smaller biotech start-ups before but when he joined Canadian life science products firm Qbiogene and was posted to Excell in May 2000, when it bought up a 51% stake in the Scottish firm, a whole new ball game opened up before him.

"It has been a real challenge," he says. "We have faced everything from raising the finance, always a difficult thing to do, to trying to find a building, negotiating with the government to get loans and recruiting the right staff. But it has also been a very enjoyable two- and-a-half years."

The recent opening of the new facility at Oakbank in Livingston has heralded a new phase for Excell. The company had previously been based at the Pentland Science Park, in Midlothian, but completed the move to expand its operations in mammalian, microbial and viral process development and manufacturing.

Module one of the new custom-built 32,500 sqft facility, is focused on the manufacturing of mammalian derived therapeutic proteins. The company is now hoping to secure funding to complete module two of the new facility, which will focus on microbial cell culture.

The third part of its operations, manufacturing viral vectors for use in gene therapy, is being carried out at its Pentland facility.

Excell's strategy has been to focus on making products for other companies in pre-clinical phase one and phase two trials once the new drug or agent has performed well at the laboratory stage. It hopes, ultimately, to break into the later stages of the trial process, which can take 15 years in total, by keeping key customers on board.

Mead is cagey about discussing in detail the technologies at the heart of the three strands of Excell's operation but he insists it is this broad-based approach to its key contract manufacturing market which gives it its "differentiator" in the market.

"We have competitors for every component of our business but we do the whole thing together," he says. "We are definitely unique".

Excell Biotech was founded in 1997 by David Black and Gordon Sherriff initially to bridge the gap in the developing biotechnology market between research and development and manufacturing.

It received start-up funding through a Department of Trade and Industry (DTI) loan, East of Scotland Investment and biotech business angel Nelson Grey's funding vehicle.

The company quickly realised there was an opportunity to move into the contract manufacturing market for biological products from its core diagnostic products.

A loosening of the regulations regarding approval for manufacturing these products, which shifted from a product-by- product basis to a facility being granted approval, opened up the market for contract manufacturing.

The business grew to a workforce of 24 and in 2000 Qbiogene, on the lookout for a manufacturing operation to complement its operations in research and development and as a service provider in the biotechnology market, spotted Excell's potential and bought up its 51% stake.

The following year, the Canadian firm acquired the rest of the business and Excell became a wholly owned subsidiary. With Mead on board, Qbiogene invested (pounds) 2 million in Excell and set about building a strong senior management team to steer the business through its growth phase.

Helen Briggs, formerly commercial manager for the biologics business of Avecia Biotechnology, joined this year as sales and marketing director in Europe, has held posts at ICI as well as three of the top five pharmaceutical companies in the world. She says the calibre of the executive team at Excell is key to its strategy for growth.

"Everybody who has joined has done so because they want to be part of something that is growing and successful."

And Excell is growing at a rate of knots. The opening of the Livingston facility has taken the total investment in the company to (pounds) 7m. Its workforce has more than doubled to 58 and the projected rise to 70 by the end of next year has already been superseded with a revised figure of 125 now on the horizon.

Turnover has grown from (pounds) 700,000 in 1999 to (pounds) 2.1m for the year to last December and is on target for (pounds) 6m this year. With (pounds) 5m of business already on the order book for next year the company is targeting a (pounds) 15m turnover for 2003 and is now on the lookout for business for 2004.

Briggs cites the 16% growth in the demand for biotechnological products reaching the clinical trial stage compared to the 9% growth for pharmaceutical products as an indication of the growing market for Excell's products.

"The demand for contract manufacturers is quite high," she explains. "The type of products we make are almost in a new area of medicine. They are biotechnologically based rather than pharmaceutically based. The more products going through to clinical trials, the more manufacturing that is required and that is really what is driving our expansion."

Another reason for Excell's rapid growth has been its early focus on international markets. Less than 15% of its customers are within the UK and there is roughly a 50-50 split in its business between the European and North American markets. It works with a wide range of companies through from small biotechnology start-ups to major international pharmaceutical firms.

With the clinical trial process often convoluted as well as complex, Excell has a degree of long-term visibility for its business. Working through a phase typically takes from 12 to 18 months and gives Excell an opportunity to build a close, effective working relationship with its customer which it hopes to maintain throughout the remainder of the trial process.

"For small biotech companies it is their life blood - this product getting through the first phase - so they work very closely with us almost as an extension of their company,"adds Briggs.

While Excell is enthusiastic about the burgeoning international reputation of the biotechnology cluster in Scotland there are still obstacles in its path. It is finding it tough recruiting people with the skill sets required and has started recruiting people from the electronics industry in Silicon Glen who have experience of working in a clean room environment.

The company believes this flexible approach to recruitment and training is starting to pay off and Mead is confident that the outlook is good for the young company.

"Our biggest challenge is coping with the growth."

Copyright 2002 SMG Sunday Newspapers Ltd.
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