Why the best innovation is in our backyard
- Baillie Gifford’s UK Equity team invests in companies set up to address ‘hard global problems’ such as cancer treatment and remittance charges
- This includes disruptive leaders in innovation, well-placed for long-term growth, according to investment manager Milena Mileva
- Here, she picks out some of the companies she believes will thrive - from healthcare firm Creo Medical to London-based fintech Wise
Tissue cells used by Exscientia to develop customised treatment
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Two seemingly unrelated questions: How do we best treat the estimated 40 per cent rise in new cases of bowel cancer predicted in the next two decades? And why does the cost of sending money across international borders remain so high and the charges incurred so opaque?
For Milena Mileva, the connection is that they are two examples of the ‘hard global problems’ that Baillie Gifford UK Equities Team companies – electrosurgery specialist Creo Medical and Wise, a foreign exchange fintech – are addressing.
She believes that the portfolio’s up-and-coming companies, “disruptors at the leading edge of innovation,” are well-placed for growth over a 10-year time horizon. Already, she says, they’re “bucking the perception that the UK is not a very exciting place to invest.”
Mileva highlights UK companies taking on some of the biggest global challenges:
The firm develops medical devices for surgical endoscopy – operations carried out by tiny devices inserted into the body via small incisions.
Speedboat, its leading product, is attached to an endoscope and used to cut out or vaporise pre-cancerous growths in the digestive tract before they spread.
“Creo enables medics to detect diseases and intervene earlier, giving a better chance of recovery,” Mileva explains.
“Endoscopes are traditionally only used in investigative procedures to diagnose disease. Creo’s advanced energy platform and surgical tools enable endoscopes to perform treatments. These procedures benefit the patient and save money for healthcare systems.”
Mileva points to Creo’s June 2022 licensing partnership with Intuitive Surgical, the global leader in robot-assisted surgery. To her, the tie-up is evidence of the broader applicability of the UK firm’s technology: “The fact that a $6bn-revenue company such as Intuitive is partnering with a small business like Creo is a strong endorsement.”
The ‘pharma tech’ company “precision engineers” drugs tailored to individual cancer patients and those with other diseases. This involves using artificial intelligence (AI) at each drug discovery and development stage.
“The company is made up of a 50-50 split between biologists and technologists,” Mileva says.
“From the AI generation of the first novel molecules to the design of a potential therapy typically takes Exscientia around 12 months. The industry average is four-and-a-half years.”
The firm has 25 new therapies in its pipeline, including the first three AI-designed drug candidates to enter phase one clinical trials – the first step in testing a new treatment in humans.
Headquartered in Oxford Science Park and listed on New York’s Nasdaq exchange, Mileva is hopeful that “Excscientia will become the next AstraZeneca. The academic credibility of the people involved gives me confidence that it can.”
Wise has pioneered low-cost, super-transparent international money transfers.
Because it uses its own account in the destination country to pay a recipient an amount akin to the real exchange rate, money does not cross international borders and incur additional costs. Wise is upfront about the (usually lower) fees it charges.
Founded as TransferWise in 2010, the firm has grown rapidly, grabbing market share from banks and other incumbent foreign exchange brokers.
It listed on the London Stock Exchange last year and reported 38 per cent annual revenue growth in its last financial year.
“Individuals and companies transfer an estimated $18tn every year. Over 60 per cent of that is in the hands of banks, where transactions are riddled with hidden charges. It’s expensive and slow,” says Mileva.
“Banks can’t or won’t compete with the scalable technology infrastructure that makes Wise cheaper and faster.”
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