Par Equity Exits tissue diagnostics firm PathXL

Since its initial investment in PathXL in 2012, Edinburgh-based venture capital firm Par Equityhas generated a 270% tax-free return for investors from the sale of the tissue diagnosticsmedical technology firm to Philips for an undisclosed sum.

Queens University Belfast spin-out PathXL has developed digital pathology systems thatdetect, analyse, segment and catalogue tumours faster and more accurately than currentmethods, which mainly rely on human analysis of pathology slides.

Digitisation of pathology results and records has been shown to improve efficiency and reducecosts within medical and research institutions and organisations. It allows pathologyinformation to be more easily stored, distributed and used, whether in a research,
educational or clinical setting.

Using a patent-pending algorithm and other proprietary technology, PathXL’s hardware andsoftware can ultimately help improve cancer diagnosis rates through faster and moreaccurate detection and analysis.

Paul Munn, Par Equity Partner and Portfolio Manager, said: “There is a global shortage ofpathologists and that is hindering the speed at which cancer diagnosis and research can beundertaken. PathXL’s technology, which is able digitise, analyse and produce accuratediagnoses from pathology slides, is therefore extremely important and has the potential torevolutionise this area of cancer research and treatment.

“Par Equity’s investment, which was initially undertaken in 2012, as well as our hands-oninvolvement through representation on PathXL’s board, has enabled the company to invest inresearch and development, commercialise its technology and generate its first sales. The
goal was always to find a buyer from the pharmaceutical or medical manufacturing sector,within three to four years of investing, which is something we’ve been able to achievethrough Philips now acquiring the business.”

Des Speed, of PathXL, said: “Par Equity’s investment, management expertise and advice havebeen invaluable to us as we have developed our technology and grown as a business over thepast four years. We are extremely grateful to them for their involvement.

“Being acquired by Philips provides our technology with a platform and to be developedfurther as part of a powerful and globally-recognised brand name.”

PathXL was a portfolio holding in two Par Equity funds, Par Innovation Fund I LP and ParSyndicate EIS Fund.Based in Edinburgh, Par Equity is Scotland’s leading Enterprise Investment Scheme (EIS)manager, with approaching £20 million of EIS investments made to date. It is an ownermanagedventure capital firm that was formed in 2008 to address the challenges ofinvestment in small, high growth potential companies. It is run by four partners; PaulAtkinson, Robert Higginson, Andrew Castell and Paul Munn.