CEO Dr Stuart Hendry has quit as a director of loss-making Cambridge UK medical technology business Sphere Medical Holding plc – a company he founded 12 years ago – and a new chief executive has been appointed to globally commercialise the lead device.There was little in the press statements issued to the London Stock Exchange, where Sphere is listed on AIM, that pointed to whether Dr Hendry decided to leave of his own accord.
The official line was that a new CEO had been brought in “to continue the transformation of Sphere Medical into a commercial company focused on serving customers and generating revenues, profits and growth.”
The share price has been running at slightly above the 52-week low but nowhere near the year high. On the upside, its lead product has picked up key approvals and is set to be rolled out far and wide in a transformational move for the business.
Dr Hendry would appear to be leaving with the company on the cusp of something special – a strong position which owes much to his energy, foresight and perseverance.
Dr Wolfgang Rencken is the new CEO with immediate effect although Dr Hendry will stay on in an advisory role to facilitate a seamless handover. Dr Rencken has more than 15 years’ experience in the healthcare and medical devices industries and has a proven track record in developing and commercialising medical devices and driving significant product revenue growth.
He was previously CEO of MAQUET Cardiopulmonary AG, an international medical devices group with over 1,000 employees. Sphere says that during his three years as CEO, he oversaw revenue growth of over 50 per cent and more than doubled EBITDA.
He was also responsible for restructuring the global manufacturing and supply chain footprint and significantly expanding the US sales channel.
Sphere Medical’s preliminary results for the year to December 31 show that aggressive cost cutting saw post-tax losses slashed to £4.8m from £7.4m at the end of 2012.
It is equally obvious that cash burn has been a problem as Sphere has re-engineered the business and geared up to commercialise its lead Proxima device. The company reports cash at year-end of £9.3m against £5.4m in December 2012 – but Sphere raised £9m of that before expenses in an equity fundraising in June 2013.
Proxima is being developed for critical care applications and uses Sphere’s patented proprietary microanalyser technology. Proxima is a disposable patient-attached, point-of-care arterial blood gas analyser for use in the intensive care and high dependency units and operating theatres in hospitals.
The device is integrated into existing patient arterial and fluid lines at the bedside to allow the rapid measurement of a panel of blood parameters, including blood gases and electrolytes required for the optimum management of critically ill patients.
During 2013, significant advances were made towards achieving CE Mark for the Proxima system. Since the year end, the completed files have been transferred to TÜV Product Service GmbH in Munich for formal review and anticipated issue of CE Mark certificates.
A successful Proxima system usability study has been completed at Queen Elizabeth Hospital, Birmingham. Approval has been granted for a clinical follow-up study at the hospital following CE Mark approval.
Sphere also completed the Pelorus 1500 pivotal study at Great Ormond Street Hospital for Children – an important step towards the improved management of propofol dosing during surgery.
Non-executive chairman Dr Anthony Martin, said: “Throughout 2013 we have progressed our principal strategic objective of transforming Sphere Medical from a research and development orientated company into a commercially-focused medical devices business.
“Proxima is key to delivering this strategy so the board is focused on ensuring the success of Proxima and the growth of this product to serve the specific needs of our customers.
“The securing of the European CE Mark for Proxima is a prerequisite to delivering commercial success over the long term. We are therefore pleased to have been notified that TÜV Product Service GmbH in Munich is formally reviewing the Proxima CE system documentation.”
• PHOTOGRAPH SHOWS: Dr Stuart Hendry