This Oxford University spin-out could be floated on the stockmarket

Britain has some of the best universities in the world. But for a very long time, British universities have been absolutely useless when it comes to making money from their research.

What tended to happen was that the British university would do all the hard work, in developing a new idea, and then American investors would swoop in, buy the commercial rights, and make a lot of money from it.

Well, I’m very happy to say that this is starting to change. British universities have got much better at commercialising their research in recent years.

Today, I want to tell you about an exciting new spin-out company of the University of Oxford called OxSonics. It’s tiny – with only eight employees – and it’s privately owned. But it shows a lot of promise – and I wouldn’t be surprised to see it on Aim in the future.

Two ingenious new uses for ultrasound

You’re probably familiar with the ultrasound scans that check on a baby’s health during pregnancy. Ultrasound is also used to detect heart problems, examine the liver and kidneys, and to guide surgeons performing biopsies.

OxSonics is developing two exciting new applications for ultrasound technology.

The first application is in chemotherapy. Chemotherapy is a long-established treatment for cancer. It administers toxic drugs to a tumour to kill the cancerous cells. However, a problem with traditional ‘chemo’ is that high doses can produce serious side-effects. And because chemo drugs often attack all fast-dividing cells, the patient’s hair can fall out and their immune system can be compromised.

OxSonics has invented a way of using ultrasound to improve the delivery of chemo drugs. Chemo does a good job of killing tumour cells that are close to blood vessels. But in solid tumours, they struggle to penetrate to the centre of the cancerous growth.

By using a specially developed ultrasound machine, OxSonics has discovered a way of ‘pumping’ the chemo drug into the centre of the tumour. The trick is to mix the drug with sound-sensitive particles. These particles respond to the ultrasound waves by expanding and contracting, rather like bubbles forming and then collapsing. It’s this collapsing of the bubble that creates the pumping action and forces the drug into the tumour. As the ultrasound pulses continue, the bubbles keep reforming and collapsing to administer the drug.

It’s an ingenious engineering solution to the problem of drug delivery in cancer. And because this is a medical device using technology which is known to be safe, it shouldn’t need the lengthy approval process that a new drug has to go through. And OxSonics will make money from selling the hardware and from each use because its special particles are consumed in each procedure.

The second application of Oxsonics’ technology is in back pain. Chronic back pain affects 17% of the US population. Surgical procedures to solve disc problems aren’t always effective, and can result in lengthy hospital stays. That makes them expensive. OxSonics believes ultrasound can be used to ‘fracture’ the damaged tissue making it easy to withdraw from the body and be replaced. This surgery is much less invasive, and could be reduced to an outpatient procedure. This spinal ultrasound will clearly require clinical trials and the conversion of surgeons to a new way of doing things – which will take time and money.

Oxsonics needs investors

OxSonics sees itself as having two distinct businesses. The spine technology will require a deep-pocketed partner at some stage, but the drug delivery arm could be floated on to the stock exchange at some point.

As a very young company, OxSonics is still privately held. It has raised a modest amount of money and secured a grant which will fund it for about three years – it will certainly be interesting to see how it gets on. From a tiny start it could end up making its early backers a lot of money. If and when it gets its drug delivery business onto the public markets, I’ll certainly be taking a look.

And before I go today, I’d like to remind you that tickets for the MoneyWeek conference are now on sale.

The conference is happening on Friday 12 June in Westminster. I’m going to be speaking at it, along with Bill Bonner, Mike Tubbs, Merryn Somerset Webb and more.

There’s a special discount if you book early – click here to reserve your seat .