Gelmetix EIS

HMRC advance assurance allows extra capacity for Gelmetix EIS (25 June)

Gelmetix has received Advance Assurance from HMRC to raise additional funds.

We have negotiated an allocation of £367k exclusively reserved for Wealth Club members. Applications to be processed on a first-come, first-served basis. 

Co-invest with Seneca and Abcam’s Jonathan Milner in an IP-rich MedTech company developing a patented non-invasive treatment for lower back pain

Lower back pain is a debilitating problem affecting millions of people. It is one of the most common reasons for seeing a doctor, and the leading cause of disability worldwide – costing billions every year in healthcare and employee sick days.

Around 40% of instances of lower back pain are caused by spinal disc degeneration. Currently, treatment options are limited: for mild disc problems painkillers and physiotherapy, which do not treat the root cause, or for serious cases surgery which can be risky, expensive and with uncertain results. For those with moderate pain and disc damage, there is currently no suitable treatment.

Now, however, following over 20 years of research and development, university spinout Gelmetix Limited (“Gelmetix” or “the Company”) has developed a potential game-changer. 

Gelmetix’s patented hydrogel injection is a non-invasive procedure that could repair and thereby solve the pain of disc degeneration. What’s more, the Gelmetix solution could also reduce further wear and tear in the disc, and in many cases prevent a need for surgery in the future. 

Costing around 90% less than surgery, it could be a highly affordable and effective solution for patients and help reduce back pain treatment costs for the NHS, which run into the £billions. 

Pre-clinical trials for the treatment have proven successful and the Company is now raising funds under EIS at the same share price as its recently completed Series B funding round, before clinical trials commence in September 2020. Initial results are expected within six weeks of trials commencing.

To fund its activities to date, the Company has raised £8.4 million from venture capital, private investors and grants. The management team have themselves invested over £1 million.

The Series B funding round was led by Seneca Partners (“Seneca”) and one of the world’s most successful biotech entrepreneurs – co-founder of £3 billion market cap Abcam plc, Jonathan Milner. 

Due to investor demand, the Company is extending a rare opportunity to EIS investors to co-invest at the same price in this private single company offer.  

The original private EIS offer opened on the Wealth Club website on 3 June 2020. It reached capacity within a week and some investors missed out. 

Now Gelmetix has received Advance Assurance from HMRC to raise additional funds. We have negotiated an allocation of £367k exclusively reserved for Wealth Club members.

If the clinical trials are successful, a larger funding round at a higher valuation (potentially double the current one and up to £100 million) is expected to be launched next year to provide the capital to take the product to market – not guaranteed. So, this could be the last opportunity for EIS investors to invest at this current price. Please note, there are no guarantees the clinical trials will succeed and follow-on funding will be secured. The Company is currently pre-revenue. 

Experienced investors comfortable with the high risks could be rewarded with attractive returns if things go well – the mid-case target return is 10x and the high-case is 34x (both before tax relief) – not guaranteed. 

The minimum investment through Wealth Club is £21,717 and you can apply online.

Important: The information on this website is for experienced investors. It is not advice nor a research or personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value, so you could get back less than you invest.

Read important documents and apply


  • Co-invest with Seneca and leading biotech entrepreneur Jonathan Milner, at same (Series B round) share price
  • IP-rich MedTech company with a portfolio of patented products 
  • Developing a potentially game-changing, non-invasive solution to lower back pain
  • If clinical trials are successful, planned follow-on funding round could be at more than double valuation – not guaranteed
  • Over £8 million invested into the technology to date, including £1.1 million from founders and management
  • Pre-money valuation £17.4 million (fully diluted)
  • Significant addressable market estimated at £14 billion
  • Globally recognised management team and board
  • Mid-case target return 10x, high case 34x before EIS tax relief after 5 years – not guaranteed
  • Limited capacity 
  • Single company pre-revenue deal with no diversification, high risk
  • Minimum investment £21,717

This overview is based on the information available in the offer documents prepared by Seneca Partners and information provided by the management team. Wealth Club has not reviewed or verified the information included, the company forecasts or the deal details. Please read the offer documents carefully to form your own view and ensure you wholly understand the potential benefits and risks.

Gelmetix EIS

The business

Gelmetix is a diversified therapeutic biomaterials company with offices in London, Paris and Manchester. 

In 2012, it spun out from a 17-year research project at the University of Manchester investigating back pain and spinal degeneration. The Company aims to develop and commercialise effective gel-based medical solutions to chronic pain or poor body functioning, as affordable and non-invasive alternatives to surgery.

Gelmetix owns multiple patents over its hydrogel technology, both over the composition of its gels and the method of treatment. Apart from its disc degeneration treatment, the Company currently has two other core products in development, aimed at addressing similar issues of wear and tear in smaller joints and cartilage damage typically found in the knees and hips.

The goal is to become a diversified solution-platform, and subsequently develop and in-license different families of products.

The Company’s management team and board are globally recognised leaders in the spinal industry, with a strong track record of scaling and exiting leading global healthcare businesses. CEO Dr Philippe Jenny, for instance, has developed and commercialised innovative devices to treat spinal conditions – co-founding Spinplant (nanofibers for cartilage repair) and Creaspine (tailored products for spinal surgery). 

CMO and Cambridge Alumni Professor David Goldsmith has over 30 years’ experience in conducting clinical trials, while Chairman Michael Fiore co-founded Vantage Oncology, selling for $525 million in 2016. 

The technology – a video explainer

Video produced and published by Gelmetix

DXM (Double Cross-linked Microgel) – how does it work?

The Gelmetix hydrogel is mixed with water in a syringe and injected into the spinal disc by a surgeon. The hydrogel targets pain caused by wear and tear in the nucleus pulposus of the intervertebral disc, the natural shock absorber within the spine. The process aims to be quick and relatively painless – the patient should be able to go home the same day and experience significantly faster recovery times than from spinal fusion surgery.

Initial evidence from animal testing suggests that when the hydrogel fills cracks and gaps in the disc, it not only relieves pain but also crucially revitalises the cells inside the disc, potentially returning them to normal working order. 

Following over 20 years of research and development, the Gelmetix team believes this is the only product of its kind in development. 

The patented DXM has successfully passed safety, efficacy and biomechanical tests during pre-clinical (animal) trials. 

Next, clinical (human) trials are to be conducted in Bordeaux, where CEO Dr Philippe Jenny has a strong network. Protocols have been approved by the French regulator, ANSM, which follows a very similar process to the MHRA in the UK. 

The target is to pass all safety tests and demonstrate a 20% pain reduction, to obtain the regulatory approvals required for commercial launch (CE Mark in Europe, FDA approval in the US). Please refer to the Information Memorandum for details. 

If all goes to plan, DXM will be produced by Gelmetix in Manchester and sent to Switzerland for sterilisation – a highly complex process which has taken several years to refine and would be hard to replicate.


In Gelmetix’s three initial target markets there are an estimated 1 million patients who could benefit from the Gelmetix treatment (UK 0.3 million, Germany 0.4 million, France 0.3 million). This gives an initial addressable market estimated to be worth £1.2 billion.

The global market is estimated to have 17.4 million patients, giving a total potential addressable market estimated to be worth £14 billion.


Subject to successful clinical trials, a full commercial launch is planned in 2023. The German, French and UK markets will be followed by a wider rollout across Europe, and then potentially the US and key markets in Asia.

The Company will initially target the private sector, using the network of the management team and board with Key Opinion Leaders and physicians across the industry. 

Gelmetix plans to sell the product at c.£1,200 per unit to physicians, who can then charge patients accordingly for performing the procedure. The Company expects the proposition to be attractive to physicians, as the procedure is quick, potentially profitable and offers a more conservative solution compared to surgery.

It is anticipated private medical insurance should cover the procedure for patients, provided their policy conditions deem it medically necessary and cost-effective. 

The decision for NHS and other public healthcare providers to purchase the Gelmetix product will depend on its medical success and proven cost-effectiveness – which is why the Company will target the private sector first. As the procedure could replace surgery in many cases, it has the potential to save the NHS £millions if proven successful.

The Company is forecasting sales of £24.5 million in 2026, four years after commercial launch (not guaranteed).

The offer

Driven by investor demand, the Company is raising funds under EIS before clinical trials are due to commence in September 2020, at a pre-money valuation of £17.4 million. Investors in this round will be investing at the same share price as other Series B institutional and private investors. 

The additional funding will provide further headroom, and be deployed towards progressing the Company’s related hydrogel products for small joints and cartilage. 

Should clinical trials be successful, the Company plans to launch a larger follow-on funding round in 2021 at conservatively double the current valuation, or potentially up to £100 million, although there are no guarantees.

In our view, this appears a unique although high risk opportunity to invest in a pre-clinical-trial MedTech business at an exciting time. Initial results are expected within six weeks of commencing clinical trials, and if these are successful the business could potentially progress at a fast pace – unusually so for pre-clinical-trial MedTech businesses. That said, if the trials are not successful the value of the Company may drop considerably. Potential investors must form their own opinion.

Predicated on clinical trials being successful, the Company is targeting mid-case returns of 10x and high-case returns of 34x before tax relief in year 5 – not guaranteed. 

Covid-19 impact

Clinical trials have been delayed due to Covid-19 and are now expected to commence in September 2020, but could be delayed further. However, the Company is well capitalised and has undertaken a detailed cost assessment whereby cash burn can be reduced to c.£60k-£70k per month (pre-government support) should the trial be delayed. This would enable the business to withstand up to a further 18-month delay (without further funding) and still ensure it has usable data from the initial trials prior to any further requirement for funding.

Target returns

The global medical device market has seen multiple high-value exits in recent years, including many significant valuations prior to revenue being achieved. 

In 2014 Nevro, a spinal cord stimulation device, completed its IPO valuing its business at $424 million (17.7x revenue). 

In 2015, Smith & Nephew acquired knee prosthetics business Blue Belt Technologies for $275 million (14.5x revenue). Bioactive Bone Substitutes (2018) and Bonetherapeutics (2015) floated valued at €28 million and €105 million respectively, despite being pre-revenue. 

Management believes that valuation metrics for Gelmetix would likely be more dependent on the strength of the data from clinical trials and crucially the proportion of the market that the treatment would be appealing to, rather than traditional revenue / EBITDA multiples.

For mid-case market penetration, and a mid-case return multiple, management believes the business could be valued at £255 million in year five. This assumes a market potential to generate £85 million revenue by capturing 0.5% of the existing addressable market, plus 2% of new patients coming into the market annually. This would correspond to a mid-case return of 10x before tax relief – not guaranteed. 

High-case returns assume capturing 1% of the existing addressable market plus 5% of new patients. This would correspond to potential revenues of £178 million and value the business at £892 million, giving a high case return of 34x before tax relief – not guaranteed.

Exit options

As with all EIS companies, there is the option of a trade sale, a sale to another investor, refinancing or a stock market listing. 

Following a successful clinical trial, management plans to launch a follow-on round at a significantly higher valuation to provide the capital to take the product to market.

If trials are successful, the outright IP purchase of the chronic lower back pain (CLBP) asset could also be highly attractive to a trade buyer.

Exit options and timeframes are not guaranteed. Note: if the Company did achieve an early exit, this could affect EIS tax relief.


CEO Dr Philippe Jenny leads the executive team. Philippe trained as a spine surgeon and has spent the last 30 years developing and commercialising innovative devices to treat spinal and other conditions. He spent 15 years at Sofamor-Stryker Spine as Director, where he grew the spine business from $3 million to $250 million revenue. Philippe then went on to found Spinplant, Centest, Creaspine and 2ACBI, bringing innovative devices to treat spinal conditions to market.

The technical team supporting Philippe is headed up by CMO Professor David Goldsmith, who has extensive experience in conducting clinical trials and is responsible for the global clinical programme.

CFO Jayne Thorpe, CTO Dr Jane Bramhill and Head of Strategy Tristan Courtial make up the remainder of the senior management team.

Board of directors

Management is supported by an experienced board of directors, headed by Chairman Michael Fiore and Vice-Chair Dr Sam Bakri

Michael has 37 years’ experience in the healthcare industry and is a partner at US PE firm Linden LLC. Michael co-founded Vantage Oncology and served as Chair and CEO until the business was sold in 2016 for $525 million. 

Sam is a serial healthcare entrepreneur, co-founding Aida Care (Mayo Clinic backed healthcare equipment provider) and SolasCure (wound care management start-up). Sam has invested over £500k in the business to date.

Gerard De Greer (Senior Advisor of European PE firm IK Capital) and Tony Freemont (co-founder and inventor of the DXM technology) also sit on the board.

Seneca Partners

Seneca is an investment management and corporate advisory business that has deployed over £650 million into UK SMEs since 2010. Its experienced growth capital team has raised and deployed more than £60 million of EIS and VCT growth capital investment funds into 48 SME companies since it undertook its first EIS investment in 2012. Since its initial investment in 2018, Seneca has invested a total of £1.5 million into Gelmetix to date through its EIS Portfolio Service.

Risks – important 

This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.

EIS investments are high risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value. 

Before you invest, please carefully read the Information Memorandum which contains further details on the considerable risks, alongside the Wealth Club Risks and Commitments.  

A key risk is if clinical trials are not successful, investors could suffer a level dilution while the trial is revisited (requiring further funds). In the worst case, if it were concluded that the product design and core IP are not fit for purpose, investors would likely lose the value of their investment. 

Clinical trials could be delayed further. This would impact the financial position of the Company and cause costs to be higher than forecast.

This is a single company pre-revenue EIS offer with no diversification. It involves investing in an early-stage, pre-revenue MedTech business which is by nature high risk and prone to failure. You could lose the amount you invest.

The value of tax benefits depends on circumstances and tax rules can change. 

If the Company were to achieve an early exit, this could affect EIS tax relief.


Investors are investing in the Company directly, so will pay no direct initial or ongoing charges. 

Seneca, which led the Series B round and arranged this private offer, will pay an introducer fee to Wealth Club equal to 4% of capital raised. Wealth Club will have the right to buy shares in the Company via a warrant. There are no other fees paid to Wealth Club.  

Our view

Gelmetix has invested significant time and capital in its patented technology, in preparation for clinical trials. This is an exciting time for the business – initial indications that its product can be used in humans could be received as early as October 2020. This presents an exciting opportunity to co-invest alongside Seneca and experienced biotech investor Jonathan Milner into an IP-rich EIS company that has the potential, if successful, to provide highly attractive returns.

The management and board have significant experience in the sector, commercialising innovative healthcare devices and scaling and exiting leading global healthcare businesses. They have invested significantly, aligning interests with investors.

The progress made to date and the number of experienced sector investors and reputable institutions that have invested in the business is impressive. This highlights the strength of the potential market opportunity and skill of the management team and founders, in our view. Remember, much depends on the outcome of the clinical trials. Experienced investors should form their own view.

Register your interest – no obligation

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – tax-efficient investments. You should base your investment decision on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.

The details

Single company
Healthcare & Technology
Target return
Funds raised / sought
£367,000 sought
Minimum investment
Limited capacity
Last updated: 25 June 2020

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