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DateFriday, May 08, 2009


Asked by, "What of the future?" A slightly irritated Costello responds.....


"We're discovering that very few VCs have the expertise to evaluate our company."




A Few Short Weeks Later, He's Almost €4m ‘Very Happy!'


Dr. Sean Costello (pictured right) and Dr. Donal O'Shea, are the co-founders of DCU Invent spin out, SlidePath, a company specializing in Digital Pathology. Their company was bought last week by the UK company Genetix Group plc for €3.7m

This partnership between the Doctors began in 2003 when then PHD student Costello and mentor O'Shea spotted both a niche and a growing market.

For the first year, O'Shea occupied a Hot Desk at the Invent building and set about market researching and developing a product offering in External Quality Assurance (EQA), and, at the same time participated in the Enterprise Ireland M50 program to give him with the core skills to run a business. Whilst the company was financially weak, O'Shea was given the latitude to maintain his academic duties in the School of Biotechnology.


Backed with Enterprise Ireland High Potential Start Up funding and private support to the tune of €300k, SlidePath began trading in 2004, initially focusing on providing an EQA scheme for clinical practice pathologists (CP's). Their business was ticking along nicely and as the market rapidly began to change in their favour, fortunes were about to change.




Digital Pathology

The process for examining slides has remained unchanged for over a century. However, in the last couple of years great strides have been made by scientists developing tissue analysis techniques allowing upwards of 100 biopsies to be scanned in a single pass. The high throughput of samples result in an extremely large volume of data being created, and consequently a bottle neck in the discovery process. Analysis systems were needed to keep pace and SlidePath's database driven PHP, mySQL, apache web applications provided the tool to allow scientists to do just that.



Digital pathology is the computer-enabled management and interpretation of pathology information generated from slides. Digital slides can be used to microscopically examine tissue samples to identify indicators of disease and overcome problems associated with glass slides including damage and deterioration. The samples can be viewed, archived and re-examined remotely which makes the process logistically quicker and much more efficient.


It has been described as a disruptive technology in so far as its adoption by the clinical diagnostics marketplace is likely to radically change the work practices of clinical pathology in a manner that both saves time, money and improves the quality of healthcare. Costello informs us that the rapid adoption of Digital Pathology is similar to the revolution of Digital Radiology 15 years ago, and valued globally at $4bn, the last six months has seen GE, Philips and Siemens all entering the industry.



The business commenced trading in 2004 and SlidePath have found themselves becoming extensively involved in this highly specialised and regulatory software business. They have developed a number of applications for the Digital Pathology market including Digital Slidebox, an e-learning content management system for histology and medical images, Distiller, a clinical data and image management system for bio banks and clinical trial organizations and TissueIA, an automated image analsis solution for immunohistochemically stained tissue.

Their technology has a number of applications, ranging from clinical laboratories, clinical trials, drug discovery, training and academia.




SlidePath's Market
Since its own entrance, SlidePath has doubled in size with 25 people covering Business Development, R&D, Customer Support and Managed Services. They have 60 clients including Breakthrough Breast Cancer UK, Royal College of Physicians Ireland, University College London, Kings College London, Erasmus Medical Centre, EORTC, Royal College of Pathologists Australasia and Animal Health Australia, spread across 10 countries including the UK, Ireland, Germany, France, Australia and the United States where it is expecting around five new relationships over the coming weeks.



In January of 2009 SlidePath established the company's first corporate presence in the United States. The facility at 345 Park Avenue, NY is strategically placed to serve east coast opportunities for the company's products and services. They feel this will allow them to further accelerate revenue growth and establish a technology base in institutes of world renown.



Costello says, "The Obama administration is positively pro life-science research and we're encouraged by the opportunities this will bring. It's an exciting albeit very competitive market."




Over the two years ended 31 December 2008 SlidePath has grown its reported revenues at a compound annual growth rate of 61%. Audited results for the 12 months ended 31 December 2008 showed revenues of €1.3 million with a loss before tax of €0.5 million, and net liabilities of €0.1 million.

Several weeks ago, prior to the Genetix deal, Costello remarked that with their current pipeline they were expecting a turnover of €2.3m in 2009. In light of US opportunities, he indicated his company was looking for additional growth funding but was discouraged by their experience in raising funds.


Costello said, "We're not a medical device company and we're discovering that very few Venture Capitalists have the analysts with the necessary expertise to evaluate our company."




Enter Genetix
Genetix Group plc is a cell imaging and analysis group which provides scientists and clinicians with solutions for imaging and intelligent image analysis in the life science and diagnostic markets. It is headquartered in New Milton, UK, with operations in the US, Germany and Japan

In line with their strategy to accelerate and strengthen its presence in the fast growing digital pathology market, it has acquired all of the issued share capital of SlidePath In a cash and shares deal worth around €3.7 million. A value of €2.5 million has been paid already and a further €1.2 million will be paid based on the achievement of EBIT milestones during the years 2009 and 2010.

The deal follows the 2006 acquisition of Applied Imaging which enabled them to strengthen their tissue analysis product offerings for both the clinical and drug discovery markets.

SlidePath's competencies in web-enabled viewing, information management and computer-aided image analysis solutions are aligned to Genetix' core skills in imaging and image analysis. The marriage is expected to help Genetix build a stronger platform to offer a broader mix of products for the global digital pathology market, and similarly sales and customer support infrastructure worldwide and deep customer relationships with diagnostics and pharmaceutical companies, it will open up new markets and customers for SlidePath products.

Commenting on the acquisition, Charles de Rohan, Chief Executive of Genetix, said, "This transaction brings together two companies with highly complementary core skills that will greatly strengthen our competitive position in the growing digital pathology market. Combining Genetix' global infrastructure with SlidePath's leading-edge products and technologies will allow us to offer compelling new products and enhance our existing product ranges. We are impressed by the skill and expertise of SlidePath's employees and believe that this investment will further solidify Genetix' position in this exciting growth market as well as enhancing shareholder value."

Dr Donal O'Shea, Chief Executive of SlidePath said, "We are excited to be joining forces with Genetix, a company which has an excellent track record in product innovation and has built a high quality customer base and global infrastructure. The combined company will have many synergistic opportunities, a stronger market position and capital structure to be able to execute on its strategic growth initiatives. We believe this is an excellent fit."



DCU Invent
DCU InventThe remit of DCU Invent is to transform knowledge into commercial success and to provide the critical link between the university campus and the marketplace. The success of SlidePath validates DCU's emphasis on translational research and is just one of a number of companies taking technology developed by DCU to the marketplace across a range of disciplines.



Translational research is of paramount importance in DCU's strategy which aims to make a meaningful contribution to building Ireland's knowledge economy.


Costello is a vocal advocate of the transfer model. He said, "DCU Invent has provided an extremely valuable service throughout our short history. We were able to access business support in the early days though the M50 program and their resident experts have given us boundless encouragement which exists to this day.

Costello also comments that being a campus company has enabled them to grab graduates straight from the university's School of Computing. "Most of our staff members have higher degrees in research. We are ideally placed to grow our staff numbers with DCU graduates and alumni and as a DCU Alumni myself I'm more than comfortable with the level of knowledge they graduate with."


DCU Invent Richard Stokes


Richard Stokes, Director of Invent DCU concluded, "The success of SlidePath demonstrates the relevance of technologies that are emanating from Dublin City University, which have a strong market focus and play a significant role in job creation. We look forward to many more start up companies from DCU's research."








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