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R & D and The Meaning of Success

Tuesday 10 September 2013, 8:16AM

By Manufacturers Success Connection

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The Meaning of Success

Canterbury Scientific CEO, Dr Neil Pattinson, talks to NZ Manufacturer about success and the value of investing in R & D.

Where has your success come from?
Canterbury Scientific has achieved great success through the development of a product that meets a fast-growing global need. The Haemoglobin A1c (HbA1c) control is used in blood tests for the management of diabetes.

Diabetes is a global problem of epidemic proportions; it currently affects 7% of the world's population – more than 347 million people – and this number is likely to more than double by 2030. There is no cure, only management to minimise the impacts of the disease, which means regular testing. The use of HbA1c as a method of diagnosing diabetes was endorsed by the World Health Organisation in 2011.

Canterbury Scientific's HbA1c control features greater stability and shelf life than any other products available on the market. Plus, the product is distinctive in its ethical development: it is made from healthy blood samples which have had sugar added in a test tube rather than using the blood of diabetic patients whose glucose levels are not appropriately controlled.

How do you look after (and build) your market?
Canterbury Scientific employs an OEM partnering model to sell HbA1c controls into clinics, hospitals and laboratories around the world. The customer or end-user of the product is typically a clinician who is diagnosing or monitoring (every three months) diabetic patients using a Clinical Chemistry analyser. The analysers are provided by global medical device manufacturers including Siemens, Roche, Panasonic, Beckman Coulter, and Canterbury Scientific forms OEM partnerships with these providers who bundle and distribute the control as part of their healthcare technology portfolio.

Canterbury Scientific has achieved over 40% market share in the US and 10% in Europe, with sales revenue also coming from South America, India, China, Japan, SE Asia and Australasia. The company leaders travel to annual conferences such as the American Association for Clinical Chemistry, Medica in Germany and the China Medical Equipment Fair where they meet with existing OEM partners and develop future relationships.

The company's success with HbA1c has allowed it to explore several other ways of diversifying its offering, including contract manufacturing and the development of complementary diagnostic products.

We invest 20% of profits on research and development, and has brought together health industry partners to further research in various fields, including pancreatitis, diabetes, cardiovascular disease and pre-eclampsia. A joint study with the University of Canterbury into the secondary complications of diabetes was awarded $1 million in funding from the Ministry of Business, Innovation & Employment in 2012 (one of 31 projects selected under the High-Value Manufacturing and Services Research Fund).

It was selected in part due to export potential resulting from Canterbury Scientific's commercialisation experience and international relationships. Canterbury Scientific prioritises solid partnerships with researchers from the University of Canterbury, the University of Otago, the University of Cambridge in the UK and the University of Shanghai in China.

In fact, the company hosted a Science Symposium in 2012 which brought together more than 30 clinicians and researchers from New Zealand and around the world to brainstorm and evaluate opportunities for new diagnostic product development projects.

How's Business?
Fantastic. Company revenue and staff numbers have both more than doubled in the last 3 years.

In 2011, the company moved into a newly refurbished $1.2m world class manufacturing facility in Addington, Christchurch – complete with advanced laboratory space with pressure, temperature and humidity control. It was officially opened in a ceremony by then New Zealand Minister for Research, Science and Technology, Hon Dr Wayne Mapp.

In 2012 we held our first Scientific Symposium, out of which developed a joint project with the University of Canterbury to research the secondary causes of diabetes. That project was subsequently awarded $1 million in funding from the Ministry of Business, Innovation & Employment (one of 31 projects selected under the High-Value Manufacturing and Services Research Fund).

It has helped to cement our reputation as the commercialisation partner of choice for several academic institutions domestically and overseas.

The growth has also led to greater recognition and accolades within New Zealand industry. The company was named among the Technology Investment Network's list of top performing technology companies in 2011 (when it was also heralded as a top 10 'Hot Emerging Company') and 2012.

That was followed up with award wins at the 2012 Champion Canterbury Awards (Global Operator Award and the Supreme Award in the small enterprise class) and the 2012 NZ Innovators Award in Health & Science. Now the company is up for one of the pre-eminent export awards in the country – the NZTE International Business Awards.

What are you currently working on?
With China and India accounting for nearly half of the worldwide diabetic population, significant focus has been placed on the recruitment of new device manufacturer partners in those markets. In the last couple of years we've signed on Beckman and Arkray, and are working on several others.

Our current research projects focused on new potential biomarkers for various clinical conditions include: the secondary complications of diabetes, pre-eclampsia and pancreatitis.

Do you enjoy what you do?
Absolutely. Every day is different. I work with some wonderful people that keep me energised and on my toes. The product is an important tool in improving health outcomes and as a consequence we are making a difference in a real world context. I do however have a few sleepless nights!

Most satisfying business decision?
Joining CSL as their CEO.

Favourite quote?
"Life is like riding a bicycle. To keep your balance you must keep moving." – Albert Einstein
"The more I practice the luckier I get." – Gary Player

Who is your inspiration?
Dr Seuss. His books bring together a love for reading and the joy of imagination linked with a high moral compass.

How do you see the NZ economy?
Distorted by growth in non productive/value adding activities (real estate). There needs to be created a level investment playing field. Private investment in R&D needs to be encouraged.

There is too much emphasis on agriculture and tourism (farm and theme park). A strong and diverse manufacturing and export sector needs to be encouraged. For all that the Government restructuring of the Ministry and CRI (Crown Research Institute) is to be applauded with a much closer link to industry.

Also we need to remember that we are in the midst of a global recession. Relatively speaking we are looking pretty good although as witnessed last week in China, due to our high reliance on the dairy sector, potentially very vulnerable.

Do you have a passion for manufacturing?
Tell us about it. Absolutely. It's an area that requires creativity and continuous innovation. It's solution focused and in most cases provides outcomes that make a difference.

How do you relax?
I play in our vineyard in the weekends followed by a liberal dosing of wine in the evenings! I also like to play a bit of Tennis and golf.