Tools of a very modern trade

Corporate Profile

Nycomed Amersham has come a long way since 1940 when physicist Patrick Grove extracted radium from rocks and used it to make luminous dials for pilots. Today it is in the vanguard of a technology that is set to revolutionise the treatment of almost every disease known to man .

Nycomed Amersham has come a long way since 1940 when physicist Patrick Grove extracted radium from rocks and used it to make luminous dials for pilots. Today it is in the vanguard of a technology that is set to revolutionise the treatment of almost every disease known to man .

Just think of it, personalised pills that cure diseases with no side effects. No more upset stomachs, no dizzy spells, no insomnia, and, of even greater significance, no more deaths from side effects. While there's no doubt that drugs have dramatically improved the treatment of disease over the last century, they also kill people, lots of them. Around 150,000 people in Europe and America die each year, the equivalent of 400 or so a day, from unplanned, unexpected, and unwanted side effects.

One of the main underlying reasons for this annual attrition is that, with few exceptions, drugs are designed to treat the disease not the patient. Not everyone wears the same size shoes, or drinks the same wine, or eats the same food, but everyone with the same disease almost always gets the same pill, however different their genetic make-up, size, weight, colour, age and sex.

All that is about to change. Sir Bill Castell, the 54-year-old chief executive of Nycomed Amersham (pictured), reckons his company is in the vanguard of a technology that is set to revolutionise the treatment of almost every disease known to man, and a good many others yet to be discovered.

Less there be any doubt about the likely scale of the revolution, consider this: the drugs currently on the market target just 500 molecular structures in the human body to treat diseases. The new technology will expand the number of those targets almost overnight to as many as 10,000.

Amersham, now Nycomed Amersham, has come a long way since 1940 when Patrick Grove, a physicist, extracted radium from rocks and used it to make luminous dials and watches so that night flying pilots could see what speed they were doing, how much fuel they had left, and check their height.

Six decades on his successor at the controls of Nycomed Amersham is also lighting up the sky, albeit in areas that in Grove's day would have been unthinkable and out of range of even the most imaginative dreamer.

After being set up in 1940, Grove's Amersham International was nationalised in 1949 as part of the atomic energy agency. It was privatised in 1982 prompting Michael Foot to famously accuse Margaret Thatcher in the House of Commons of selling off "Amnesty International" on the cheap. During its first years back in the private sector, Amersham established a solid base in medical imaging, but it is in the last 10 years that the company has seen its most spectacular growth. That decade coincides with the arrival from Wellcome in 1989 of Sir Bill Castell, who is married to Surrey GP Renice and has three children.

At the time the former Wellcome apprentice joined, sales in the crucial North American market were worth a modest $30m. This year they are topping $1bn, and over the same period the staff in North America has gone from 30 to 3,200. Worldwide, the company now employs around 8,000, one in seven has a PhD, and almost half are graduates.

Sir Bill's recipe for success has been a mix of natural evolution backed up by acquisitions and mergers to create a company that now splits into two distinct businesses - it's traditional area of medical imaging, and its life sciences division, which is at the heart of the burgeoning gene economy and which is about to be partly floated off on NASDAQ.

Had Grove back in 1940 been able to look into the future, and had he been a gambling man, he could hardly have chosen two better fields of medicine to be in at the start of the 21st century. One half of the company finds out what's wrong with sick people, the other provides the tools for researchers to track down a cure.

"Imaging will be increasingly accepted - the cure starts here. For many years the physician entered the body with a knife without understanding. His voyage of discovery started with that first incision,'' says Castell. "They are now starting to understand that we can give them a level of functional understanding that allows them to plan whether the surgery is necessary and if it is, how successful it will be, without even lifting a knife. With our heart imaging technology, for example, the physician can now predict whether a bypass operation is going to be successful because they can now look at the viability of the heart without going into the body. We have also just registered a first diagnostic test for Parkinson's.''

While the imaging side has been pushing back the frontiers, the life sciences division has been opening up new fronts on the gene economy side. "We are using our skills in two separate markets. In one we are looking at the genotype and in the other, the phenotype [the individual characteristics produced by genes]. The relation between genotype and phenotype is key. If you know the genes but don't know what happens in the body as a result, it is not much use. It is for that reason that the phenotype is becoming so important,'' says Castell, who is also chairman of the Prince's Trust.

The world of life sciences has been dominated for the last decade by the sequencing of the human genome and the 100,000 genes that make up the blueprint for life. It is an area where Nycomed Amersham has been a world leader, providing the technology needed to sequence the human genome.

"In 1990, using our materials, you could get a few parts of the genetic alphabet in a day. We now have machines that will deliver millions of parts of the alphabet a day. That speeding up of the sequencing has been fundamental to the cracking of the genome. As the work has progressed we have had to look for the tiny spelling changes in the genome that give rise to individual characteristics, your eye colour, the shape of your nose, whether you are predisposed to arthritis, those kinds of things,'' says Castell.

At the heart of this new science is genetic material called single nucleotide polymorphisms, more commonly known as Snips. These Snips, 300,000 of them, will enable new families of designer drugs to be matched to the DNA of the patient. Genetic differences are important because they mean that bodies react differently to the chemicals in the drugs. Some people will metabolise the drug much faster, while others will produce enzymes and proteins that won't allow the drug to work. A few will react to the alien chemicals in such a hostile way that the patient dies.

"What we believe will occur, because of our understanding about the relationship between genes and how the body works, is that through the process of pharmogenomics, we will be able to match drugs with people who will have the right response. Drugs will be targeted at the individual as against the average person getting the average therapy. Not only will this targeting be beneficial to the patients, it is also much more cost effective.''

Nycomed Amersham is about to float its life sciences division on NASDAQ. Ten per cent will be floated leaving Nycomed Amersham with 45 per cent, and Pharmacia, Nycomed's partner in its life sciences business, with 45 per cent. The floating of APBiotech, as the company will be known, valued somewhere between $4m and $6m, depending on the ebb and flow of NASDAQ, will mean an injection of cash. Nycomed Amersham will retain control. Keeping the float at 10 per cent means that Nycomed does not lose the ability to consolidate APBiotech results with its own.

"We felt we needed to make sure we were provided with all the tools of capitalism, including equity, to ensure we stayed as a leader in this market place. It has become a much more competitive field than where we were in the 90s when we were one of the few players providing the technology. We retain control.''

For Castell, who was knighted in June for services to the life sciences industry, the float is another base camp on what he calls the great adventure that began for him when he was head hunted to run Amersham. "In 1991 we set out on a great adventure to move ourselves into modern molecular medicine and we did it in both business streams. We have evolved out technology base but we have stayed focused on the market place. We have done that through a cascade of acquisitions and relationships with academia.

"In 1997 Amersham was merged with Nycomed and the life sciences business was merged with that of Pharmacia. We did that to get franchises around the world and critical mass in areas of science. "With the float of APB we are claiming our territory in the gene economy. We are convinced that owning 45 per cent of the business and obtaining 100 per cent of the cash from the 10 per cent public offering will be worth much more than owning 55 per cent of a non-listed company,'' says Castell.

NA has admirers on the outside too: "They are a very good buy. They are essentially two businesses, imaging and life sciences, and number one in imaging. The growth rate is good and quite honestly if you believe the suggestion that it is a commodity business, what on earth is it doing sitting on margins in excess of 20 per cent and the growth rate it generates?'' says Andrew Pendrill of City analysts Alfred Berg. "The imaging sits very comfortably with life sciences. Within the imaging they have cutting edge stuff, and on life sciences, coming from nowhere to 35 per cent of the sequencing market says something substantial about the business. The float in the US will mean that American eyes will be looking at it and that has to be good.''

So what of the future? "I think the prospects for the group are excellent because we have been seeing good growth rates in recent years and I expect those to continue for some considerable time.''

Also looming over the horizon for Nycomed Amersham is yet another base camp on the great adventure, telediagnosis. Broadband and digital technology is making it possible and attractive to diagnose remotely, with the physician at the hospital and the patient in the GP surgery or local clinic. Scans, X-rays, and a host of other diagnostic tests could be done along broadband lines.

It's all a long way from making luminous dials for spitfires, but there's little doubt that Grove, the pipe-smoking physicist, would have been proud, if perhaps a little bemused.