You've probably heard of MRSA?
It's a bacteria that lives up some people’s noses quite harmlessly – but once it gets loose in hospitals it infects wounds and finds ways to get into poorly patients it can be FATAL. It's a BIG problem because there just aren't any drugs to fight it with – the bacteria has become resistant to its main drug enemy – Methicillin – hence its name, Methicillin-Resistant Staphylococcus Aureus.
So if there's a micro-organism out there, clinging to the Scottish coastline's rocks, that would cause death and destruction to MRSA, Aquapharm would be doing us all a great big favour finding it.
Aquapharm won't be developing the drug themselves – they are a small company and not set up to do that, but if they discover the antibacterial ‘product’ that kills MRSA, and a drug company develops it, Aquapharm can licence the chemical they found, and get a percentage of the profits the drug eventually makes. This could amount to millions of pounds – billions even!
This won't happen for a good long time though, because even after they have made the discovery, drugs take many years to be developed before they start to make money.
This is Aquapharm's "Long Term Plan".
It means they need a lot of investment (investment is basically business speak for money!) for a long while before they start to make money back in a BIG way. This is why it's harder to set up a Biotech company than a hairdressers.
If you want to open a hairdressing salon, you can ask local people if they need a hairdresser. If they say ‘yes, our hair’s a mess!’, then you can predict how much money you'll make right from the start. High street banks (who’ll be lending you the money for your hairdressing business) like that sort of thing, a lot!With a biotech company it's not so clear when your investors will start to see a return (that's business speak for 'get their money back plus profits').
Also, suppose they never do discover such a great product? They could, (in fact they are finding really useful things already) but then again they might not. The right antibacterial bug might not be clinging to the coastal rock after all. This means the investors are taking a lot of risk (and risk is business speak for 'Eeeek! we'll never get our money back!'). In order to get investors on board Kathryn and Andrew at Aquapharm have had to make investors see that though a Biotech company like theirs is High Risk (EEEEEK!), it's also likely to be High Reward (HOOORAY!).
That's how NESTA came to invest in the company. Although it won't invest in any old thing, it is happy to accept a high level of risk.
Aquapharm will be making sure not to only look for one product, but keep its eyes and other science sensors peeled for any discovery that will make money, but still there's no guarantee. (Guarantee is business speak for 'Phew! I'll definitely get my money back, plus even more…’).
To help investors see that money can be made, and to help pay for the company as it goes along a Mid Term Plan and a Near Term Plan are also needed. This is where it gets really clever…..
Money soon... Money now...
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