Pioneering Scots medical firm sold in £22m deal

Glasgow-based Mpathy Medical has been sold in a £22m deal with Danish health care product manufacturer, Coloplast.

Archangels, Scotland’s leading business angel syndicate, was the principal investor in Mpathy Medical, the fastest growing company in women’s health and the developer of revolutionary mesh technology that allows surgeons to carry out less invasive procedures.

Archangel investors, who have invested almost £5.6m in Mpathy, and its sister company Gyneideas sold as part of the deal, should receive a total of around £11.8m from the sale. Scottish Enterprise, which was a joint investor through the Scottish Co-investment Fund, will receive approximately £4.2m for its original £2m investment.

Founded in 2003 by Dr James Browning, a fellow of the Royal College of Surgeons and Royal College of Obstetricians and Gynaecologists, Mpathy has become a world-leader in developing less invasive surgical solutions for restoring women’s pelvic health.

All of its devices are constructed using Smartmesh™, the world’s lightest mesh technology. The pioneering product is the only mesh that has been invented with women’s anatomy and specific needs in mind and has been developed to minimise complications following surgery.

Coloplast’s acquisition of Mpathy, which has North American headquarters in Raynham, Massachusetts, will give the Danish multinational an increased presence in the multi-billion dollar international pelvic floor specialities market.

Dr Browning, Mpathy’s Chief Technology Officer, said: “I’m very proud of Mpathy’s accomplishments and look forward to improving outcomes for women as part of Coloplast. Our success is due in large part to the significant investment we were fortunate to receive from Archangels and Scottish Enterprise’s Scottish Co-Investment Fund, and they should be applauded for the support they have given us and other companies in the life sciences sector.”

Archangels, which first invested in Mpathy in 2004, is Scotland’s biggest investor in life sciences and has led funding totalling £80m to the sector over the past 18 years.

John Waddell, Chief Executive of Archangels, said: “We recognised James Browning’s skill and inventiveness at the time of first investing and when the company had reached the point of launch into the US market we introduced Ian Stevens (formerly of Optos) as CEO to lead the sales thrust.”

David Grahame, director at LINC Scotland, the national association for business angels, said: “This is a fantastic achievement and an important milestone for angel investment. It reinforces Scotland’s reputation for entrepreneurship and innovation and is a real success story for the Scottish Co-investment Fund.

“The support Archangel and other angel groups have provided to Scottish start-up companies is key to the future growth of the country and our ability to ride the current economic storm.”

Since 2003, Scottish Enterprise has invested more than £138m through its suite of equity funds and leveraged another £280m of private sector capital.

Gerard Kelly, Senior Investment Director at Scottish Enterprise said: “We are delighted to share in this success story alongside Archangels, one of our longest-standing co-investment partners. Mpathy's achievements in the life sciences sector, funded by Archangel and our Scottish Co-investment Fund, together with this positive outcome for investors, illustrate the beneficial role of the co-investment model in the Scottish economy.”