Profile: Geoffrey Guy; Doctor hits a purple patch

As Ethical Holdings flies high in the medical market, David Bowen talks to a tycoon with a difference
NOT many tycoons have rooms in Harley Street. But not many tycoons are doctors - at least not in this country, where they are supposed to rise above the sordid maelstrom of enterprise. Geoffrey Guy is an exception: not only has he done his six years of medical training, he has also founded a company that is worth pounds 140m and growing fast. And he is still only 41 years old.

Ethical Holdings is one of those companies that is difficult to describe. It is a manufacturer and is market leader in slow-release patches used for hormone replacement therapy. But most of its business is developing drugs incorporating its proprietary "drug delivery" systems, such as patches or slow-release capsules, and licensing them to big pharmaceutical groups for marketing.

It is highly successful. In October it announced a 58 per cent jump in turnover and record profits of pounds 2.3m. It floated in April 1993 on the Nasdaq over-the-counter market in New York and its share price has risen from $6 to $9.25, having hit $14 at one point.

Last week's excitement over British Biotech passed it by though, leaving Guy unmoved: London is just catching up, in fits and starts, to the sort of prices that make New York so attractive.

"A share going up 50 per cent in a day is par for the course on Nasdaq," he says. It is good news that we are waking up to biotechnology, he adds, but for the moment at least he is happier to be in the hands of American investors. They have not done him badly so far - if the company was acquired tomorrow, he would be unlucky to get less than pounds 20m for his stake.

Geoffrey Guy qualified as a doctor at Bart's in London. By his account, every medical student needs to be a natural wheeler-dealer, because that is the only way of keeping alive through the long years of training. He claims: "My favourite reading was Exchange and Mart." He bought and sold cars and motorbikes and learned what he says is still a fundamental entrepreneurial skill - to know how much something is worth.

But he admits he was rather better at it than his fellow students. While they struggled around on bicycles he never had a car of less than three litres, and took two skiing holidays a year. "A lot of students were there because they wanted to be doctors - I was there because I liked medicine. It's the difference between a priest and a theologian."

"I have no idea where my entrepreneurial urges came from," he says. "I don't think it was because I wanted to be fabulously rich, more because I wanted to create something." But he says he does have the fundamental drive of all successful business people. "Lots of people have ideas, but an entrepreneur will make them work while others won't. He will delay having a family and mortgage his house to make sure it does."

When he had taken "all the exams you could take", he worked in three teaching hospitals - clocking up 120-hour weeks - and was on his way to another one in Oxford when he saw an advertisement for a clinical trials co-ordinator in the South of France. This appealed to him and, partly because he had taken a pharmacology degree, he got the job.

His conviction that there was money in medicine was reinforced when he met his new boss in Castres: he had been the local chemist 20 years ago and now headed up a large company. Guy was asked to take a portfolio of drugs that were established in France and carry out the clinical trials in Britain that would allow them to be sold here. He was good at the job, although it did not quite live up to the advertisement: he spent most of his time in England.

By now he had begun dabble alone. He backed a British yacht design company, and also helped set up a French company making a machine that measured lung strength.

But Guy felt Britain was the place to be to make it in a big way, so he took a job as director of clinical development for Napp Laboratories, a drug delivery company based in Cambridge.

Napp said it wanted "an entrepreneurial young doctor," but got rather more than it had bargained for. One of Guy's sidelines - a company that installed computer systems for other drugs groups - became ever more important.

This sideline had its own sideline - testing new drugs - and Guy got his big break when a Japanese company asked if the company would take an anti-cancer drug from the first human tests to the market.

Thus far he had managed to coexist with Napp. Now the conflict of interest was too great, and he left to set up on his own. It was the mid-1980s and the spirit of enterprise was abroad. Venture capitalists happily backed him, and Ethical started up in Ely in July 1985; it had three staff.

His chosen niche was drug delivery - he would take non-patented products and produce them in slow-release form. One of his first was a morphine tablet that minimised side-effects. It landed Guy in court, because Napp had been developing a similar tablet and thought he had stolen the idea. Guy denied this and, after a long battle, the court agreed.

Ethical became the European market leader in blood pressure control tablets, and in 1989 moved into skin patches. As it became better established, drugs companies started coming to Guy, asking Ethical to repackage their patented drugs in slow-release form.

Guy's great commercial achievement has been to sign licensing agreements at such a rate that income has always run ahead of research and development expenditure. Ethical now employs 150 people - mostly scientists - and is one of the three top companies in its sector.

Guy makes no secret of his ambition to be a big fish in a much bigger pond. Drugs companies can grow very fast - Glaxo was once a modest baby- milk manufacturer. He still has outside interests - including a marine engineering company that makes fittings for America's Cup yachts - and he has been able to indulge his passion for cars. "I've got lots of them," he says.

But he has chosen kite-flying and archery as hobbies, both because he can do them at home, in Rutland, and because they are good for a man who lives under stress. "Archery uses a lot of energy, but when you rest the bow, your heart rate and blood pressure drop," he says. A doctor, as well as a tycoon, speaks.