Jell-O Eyeball Shots
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ScriptSwitch was started in 2002 by a few Warwick University students and a pharmacist. They thought up the idea of a tool that could help control costs by suggesting a “switch” between one drug and a cheaper, identical one under a different brand. The students and the pharmacist applied to the bank and obtained a loan which enabled the company to test the concept in the market, but the company ran out of cash very quickly. At this point the business identified a CEO whom Midven worked closely with to develop an investment ready business case. Midven’s Advantage Growth Fund then invested to enable product development to be completed, and a management and sales team to be recruited.
The concept grew from a simple cost-saving measure to a tool that allowed GPs to make more informed prescribing decisions, whether about different combinations of drugs to achieve better results, or optimising dosages, or checking that prescribing is in line with government guidelines.
During this phase Midven played a key role in developing the software as a service pricing model. In 80 per cent of cases, the recommendations provided led to cost savings for the NHS. The annualised savings were c£10 million at time of exit, and if rolled out to every site in England, the potential savings to the NHS would have been c£390 million per annum.
By 2007 the business had made significant progress and was highly profitable. However, significant investment was required to take the business to the next level and accelerate growth. Midven worked with the existing management team and potential incoming investors to structure a secondary buy-out transaction. This enabled some cash to be taken out by all existing shareholders, reducing management’s financial exposure, and re-invigorated and strengthened the remaining team for the next growth phase.
In 2009 the business received a Queens Award for Enterprise and was sold for c.£45m to United Health Group, a US based health and wellbeing company. At the time of exit the company employed 47 people (5 at investment).
Midven has recently introduced the former financial controller of Scriptswitch to three of its portfolio companies where he is currently acting in a part-time capacity for each of them.