ANGLE (LON:AGL) is the longest established of the intellectual property groups quoted on the London market. 

Founded in 1994, it listed a decade later. Unlike others, ANGLE does not invest in other people’s businesses.  

Instead it founds, owns, operates and invests in its own businesses from the ground up.  

ANGLE chief executive Andrew Newland says this enables the company to build stronger, more robust businesses with a lower failure rate and risk profile than traditional investor models.

The share price rocketed recently when the group revealed Parsortix, one of its companies, had successfully tested a blood screening device that could change forever the way cancer is treated and monitored.

However there is more to ANGLE than just this one firm. it has two other leading investments, while there is a potential payout from a third which is currently the subject of a bitter legal wrangle.

Parsortix (90 per cent owned by ANGLE)

This is the jewel in the crown of the ANGLE business. it has come up with a small, devilishly simple separation device that has the potential to capture and characterise cancer cells in the bloodstream. 

This of course has all sorts of ramifications for the way the disease is treated and monitored.

For a start it may be possible using the device to determine which treatments are working, and which are not.  

Now this promises a huge improvement in the way chemotherapy is administered. 

The device also has the potential to monitor patients in remission, and to pick up early signs of the return of the cancer, ahead of the patient experiencing any symptoms.  the earlier the treatment, the greater the likelihood the patient will survive.

Furthermore, it may be possible to develop a simple blood test to provide routine screening of healthy people to check for early signs of cancer ahead of any symptoms.

Although still in its infancy, Parsortix technology may ultimately have the ability to identify all the hard tumour types, without knowing in advance which cancer is expected.  

This is a step on from the existing means of identifying circulating cancer cells, where the tests are specific to each cancer type and even then are not totally reliable.  

“we think ours has a much more universal application – hopefully to all solid tumours,” says Newland.

The company is currently in discussions with leading cancer research groups including the Paterson Institute for Cancer Research in Manchester. 

The idea of this and other similar collaborations is to field test the device using blood taken from cancer patients. 

It also allows for development of the separation device and the supporting equipment in a real world setting. 

The potential clinical market is huge and is conservatively estimated by the company to be worth around US$4 billion annually in the United States alone.

However, to be sold for use in hospitals the device requires what’s called 510k approval from the all powerful US Food & Drug Administration and a CE mark here in Europe. 

That process is likely to take a further 18 months of research, development and testing – and cost around £5 million.

Although the company is talking to potential partners, ANGLE may bankroll the development itself. 

It has options to achieve this, including the sale of one of the businesses in the company’s portfolio.

Alternatively it could fund the work by licensing selective use of the separation device to big pharmaceutical companies developing drugs for cancer as what’s called a companion diagnostic.

“That way we would get a big partner working with us, but wouldn’t give away the crown jewels,” Newland says.

“There is the potential to take the separation device rapidly into the research sales market as this does not require regulatory approval and that is our first target.” 

Geomerics (33 per cent holding)

Unless you are under the age of 18, it is unlikely you will have noticed the hype surrounding the launch of Battlefield 3.   

According to commentators the Electronic Arts shoot ‘em up could knock current PlayStation and X-Box number one call of Duty off its perch. 

For Geomerics it is a huge opportunity to showcase its Enlighten middleware, though it is already used in 17 other titles produced by EA and other leading games publishers.   

The aim is to turn Enlighten into the industry standard for top quality computer games lighting and graphics.    

“In commercial terms Geomerics is getting some traction,” says Newland. 

“we are nearly at the stage where the sales income not only covers the operating costs – we have been at that level for a while – but also the development costs and overheads.” 

It has a £2.3 million development deal with a large, but unnamed technology company. 

“we are hoping over the next 18 months Geomerics will emerge as an industry standard in its field and we will then get interest from some of these big players,” says Newland. 

“we are building it so we will hopefully get multiple businesses interested in buying it.”

Novocellus (82 per cent holding)

Its EmbryoSure selection system has the potential to revolutionise in-vitro fertilisation. 

The science behind the product was developed by the University of York, and it tests the amino acid profile of the culture medium used to carry the fertilised egg.  

“we believe EmbryoSure will identify with 95 per cent confidence which one of the embryos is likely to be a top quartile embryo,” says Newland. 

Currently there is no such means of identifying the best eggs. 

Novocellus reckons EmbryoSure has the potential to increase pregnancy rates by a quarter and possibly by as much as 40 per cent. 

As well as increasing pregnancy success rates, this has two other major benefits. the first is cost.  If as touted EmbryoSure reduces the number of cycles of IVF required to get pregnant, the overall IVF cost will fall. 

The second is less obvious and relates to the push from inside the healthcare system towards single embryo transfer instead of double embryo transfer. 

Having a way of spotting to these “top quartile” eggs would aid the transition to single embryo transfer. 

“we believe there is going to be a regulatory drive behind our product,” Newland adds.

Novocellus is partnered with Origio, a Danish firm, which sells the culture medium used in IVF.

Origio has agreed to carry out trials on the product, and in return Novocellus will receive milestone payments of £4.5 million and royalties at a rate of 25 per cent when EmbryoSure goes on sale. 

The current timeline is to complete trials in 2012, although “we are aware that Origio are behind on the trials work”. 

Acolyte Biomedica 

This was the very first company ANGLE set up. it used technology deployed in the first Gulf War to detect anthrax to identify the MRSA super-bug. 

The business was sold to the American giant 3M in 2007 in deal brokered by Porton Capital, Acolyte’s biggest shareholder at exit. by this time ANGLE had been diluted down to 11.55 per cent. 

Porton is currently locked in a court battle over the proceeds from the agreed earn out it says it is still owed. If successful then it paves the way for ANGLE to claim back up to £4.7 million. 

The court proceedings are complete and the judge is expected to give his ruling imminently.  ANGLE is not at risk of any legal costs and the result can only provide an upside benefit.  

What the City Says

The share price, currently 80.5 pence, is nearly double the last documented price target from Collins Stewart and is closing in on the 119 pence valuation placed on the stock by Merchant Securities. 

“we have been encouraged by updates on several of its venture companies, including Geomerics and Parsortix,” said Merchant analyst Navid Malik in a note to clients. 

“we see calendar 2012 as a key year for ANGLE, which could show the signs of significant delivery on commercial deals and progress within a number of the subsidiary businesses.”