UK markets closed
  • FTSE 100

    7,051.48
    -26.87 (-0.38%)
     
  • FTSE 250

    23,608.79
    -221.39 (-0.93%)
     
  • AIM

    1,266.98
    -5.42 (-0.43%)
     
  • GBP/EUR

    1.1661
    -0.0022 (-0.19%)
     
  • GBP/USD

    1.3681
    -0.0040 (-0.29%)
     
  • BTC-GBP

    31,237.16
    +579.04 (+1.89%)
     
  • CMC Crypto 200

    1,067.20
    -35.86 (-3.25%)
     
  • S&P 500

    4,455.48
    +6.50 (+0.15%)
     
  • DOW

    34,798.00
    +33.18 (+0.10%)
     
  • CRUDE OIL

    73.95
    +0.65 (+0.89%)
     
  • GOLD FUTURES

    1,750.60
    +0.80 (+0.05%)
     
  • NIKKEI 225

    30,248.81
    +609.41 (+2.06%)
     
  • HANG SENG

    24,192.16
    -318.82 (-1.30%)
     
  • DAX

    15,531.75
    -112.22 (-0.72%)
     
  • CAC 40

    6,638.46
    -63.52 (-0.95%)
     

Why Bill Gates and George Soros bought a Bedford diagnostics firm

·6-min read
Ebola test care
Ebola test care

Rising up out of an old RAF hangar, a little-known company on the outskirts of Bedford has attracted the attention of billionaire philanthropists George Soros and Bill Gates.

Global Access Health, which is the new parent company of Mologic and its sister firm Global Access Diagnostics, is behind a 10-minute Covid test that it aims to make for as little as $1 (70p).

Earlier this month Soros and Gates said they were part of a consortium, led by the Soros Economic Development Fund (SEDF), which plans to invest at least £30m into the company.

Together, they want to transform GAH into a social enterprise that will develop low-cost tests for tropical illnesses, allowing them to be diagnosed faster and for less.

The US backing will finally allow Mologic to get away from “unbridled profiteering” and focus on research and development - a balance the 18-year-old company has sometimes found difficult to strike.

When it was founded in 2003, its aim was to make rapid, single-use lateral flow diagnostic tests and reagents for companies and healthcare organisations.

“It was absolutely tight as the proverbial duck’s bottom in the early days,” says Davis.

“We always had to make money. But my father and I were both very motivated risk-takers and innovators. We wanted to be disruptive and that meant we were unemployable in the corporate environment.”

Such traits were perhaps what contributed to some rough patches along the way. Mologic took on board investors over the years.

Going corporate

Prime Minister Boris Johnson visited the Mologic Laboratory in Bedford on the eve of the pandemic on March 6, 2020 - Jack Hill/REUTERS
Prime Minister Boris Johnson visited the Mologic Laboratory in Bedford on the eve of the pandemic on March 6, 2020 - Jack Hill/REUTERS

In 2009 it was acquired by Inverness Medical Solutions, later called Alere, a listed local firm and a large player in the diagnostics space.

“It offered a logical exit for shareholders and staff members who were also shareholders,” Davis says.

Things, however, started to sour two-and-a-half years later. Those corporate constraints that Davis and his father shied away from began to bite. “We were acquired for our innovative capability and research & development, but there became a relentless drive for profitability, less innovation and less R&D. It was a messy time,” Davis says.

Alere no longer wanted Mologic and set the company for closure. Davis senior was marched off the premises, Davis junior was sacked for gross misconduct, which he says was “totally unfounded”. Meanwhile, all staff were placed on 90 days’ notice.

Somehow, the Davis duo managed to negotiate to buy back the company, risking everything and taking on all the liability. By December 2014 Mologic was once again up and running, with all 42 staff.

Having been stabilised, Mologic secured private equity backing from Calculus and later in 2018 from private equity firm Foresight, allowing it to reinvigorate its research and carry out clinical trials.

Bill and Melinda Gates - Seth Wenig /AP
Bill and Melinda Gates - Seth Wenig /AP

Running quietly in the background this whole time, however, was a small social enterprise within Mologic that Davis had started in 2013 in partnership with Seattle public health non-profit PATH.

“We realised there was much more we could do with developing nations, so PATH helped us start a programme of diagnostic development for groups other than the classic capitalist markets,” Davis says.

It wasn’t popular with Alere. Davis recalls a “showdown” in 2013 over an Ebola diagnostic. “It got a little out of hand. I insisted we did one and was told by the corporate team that we would not be doing one as there was no money in it, and that's when I properly lost my sense of humour and started to fall in love with what we could actually do.”

Luckily, that work on tropical infectious diseases caught the interest of the Bill and Melinda Gates Foundation, which, in 2016, made a “very bold commitment” to Mologic to establish an entity within the company that would focus on rapid diagnostics for the developing world.

“It was a group led by my father Paul. [They were] highly dedicated innovative scientists whose primary function was to improve rapid diagnostics to make them more specific, more sensitive down towards the molecular level so that they could be used in a field by a backpack medic.”

Gates has poured millions into the initiative over the years. Now, thanks to the full backing of it and the Soros fund, it is “beginning to stand on its own two feet”.

“We are making higher sensitivity tests for malaria, HIV and TB which will enter the market in the coming year or two, all lateral flows designed to cost a dollar each,” Davis says.

Billionaire buyout

So, how did the deal with Gates and SEDF come about? It took two years to complete, Davis says. But that’s not because anyone was reluctant, it was just that it had never been done before. Covid, actually, helped speed up things as it highlighted the importance of what Mologic was doing.

“It wasn’t a traditional exit for our backers, the logical exit would have been an IPO or trade sale, but that would have lost focus on the tropical disease portfolio ... we knew we had to be radical but also find a position that would satisfy all parties, and finding a group of intelligent, bold and thought-leading partners like Gates Foundation and [Soros] to essentially lead a buyout of Mologic, secure the value and dedicate it to low and middle income country objectives.”

The appeal to get Gates and Soros on board was “very personal”, he adds.

George Soros - Thomas Peter /Reuters
George Soros - Thomas Peter /Reuters

“I knew our investors were beginning to open their eyes to an exit, it wasn't because of greed, but it was naturally the right time for them to leave and I could see we were going to lose all that value in the global health programme so we pushed it one step further saying we wanted to democratise diagnostics.

“There are a limited number of parties who can do it and have the conviction to do something totally unique, and [Soros] was aware of us and vice versa.”

The two parties bought out Mologic for $41m (£29m), giving Davis and his team the freedom to focus on what they were truly passionate about.

A manufacturing facility set up during the middle of the pandemic last year is now being expanded into an old RAF hangar next door to Global Access Health headquarters, dedicated to designing lateral flow tests and molecular reagents. It will act as a supply-chain guardian to the developing world - and the UK - during pandemics.

In parallel, the company is helping poor countries set up their own in-house manufacturing, using its headquarters as a centre for support and training. Projects are already under way in Senegal, Bangladesh and Pakistan.

The Gates and Soros funds had been “very supportive, but not interfering”, Davis explains. It has opened up a huge network of connections for Global Access Health.

But while backing from Soros and Gates has unshackled the company from the need to deliver profits to shareholders, there isn’t a “golden trough into which pigs snouts can be inserted”, Davis says.

Global Access Health, he explains, has to be profitable and expand its commercial activities to generate more sales to then reinvest.

“This is about generating independent revenue streams from our existing commercial engagements, but to do more ... we are not expecting or expected to become a billion-dollar company. The purpose is not to have Mologic as yet another grant junkie.”

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting