Treagus upbeat on BTC Health’s diagnosis of success

BTC Health forecasts double-digit revenue growth after adding 75 new products and another 151 customers last year.

BTC Health executive chair Richard Treagus.

Serial life sciences entrepreneur Richard Treagus is betting that inspiration from his surgeon grandfather, his decades of experience in the sector and a near 20-year-old vehicle set up by the government to spur investment in emerging companies will be a recipe for success at his current venture, BTC Health.

Dr Treagus, the former executive chairman of Neuren Pharmaceuticals and former managing director of Acrux, says the company is nearing break even after a bruising period during the pandemic and the loss of a key supply contract out of the US last year.

But after a “hard reset”, BTC Health is now forecasting double-digit revenue growth this financial year, with 75 new products brought on to its books last year and another 151 customers, bringing that number to 517.

BTC Health is one of the few remaining companies that has ­access to tax breaks under the Pooled Development Fund program, which was grandfathered in 2006.

Companies that use the structure only pay a 15 per cent tax rate on the income and equity investment gains in investee companies.

BTC Health has set itself up as the owner of three entities: BTC Specialty Health, focused on post-operative pain and neuro-spinal; BTC Cardio, focused on cardiothoracic and critical care; and BTC Pharma, focused on specialised therapeutics.

The business model is to consult with physicians in the Australian and New Zealand markets, and then bring in medical devices that were previously not available, as a supplier.

Given that the devices already have regulatory approval in jurisdictions such as the US, from the Food and Drug Administration, or CE mark certification, the approvals process is streamlined and the company benefits from reduced regulatory risk.

And given BTC Health does not develop its own products, the company does not have the research and development costs that often make life sciences investment such a risky proposition.

Dr Treagus says that, having operated under the Pooled Development Fund structure at Acrux, he set out to find one of the remaining vehicles a few years ago, eventually turning up BTC Capital in Perth. He convinced its owners to let him invest for a 20 per cent stake, renamed it BTC Health and moved it to Melbourne, “with the vision of supplying innovative medical products into hospitals’’.

“I was aware that there were many exciting technologies in Europe, Israel, the United States that, for one reason or another, haven’t found their way to Australia and New Zealand,’’ Dr Treagus said.

“As a medical doctor, I can identify these and see the gaps. So my idea was to bring those technologies to Australian patients and consumers using BTC Health as the ASX-listed company.’’

The company in 2019 set up a deal to import pain infusion pumps, but was soon hit by the pandemic, and in early 2023 the company’s supplier decided to stop supplying the pumps outside the US.

“So for us, 2023 was somewhat of a hard reset, and that forced us to look at the hospital landscape very carefully and identify new gaps and new opportunities,’’ Dr Treagus said. “We’ve had an exciting 12 months … I brought on a new group of South African strategic investors in September of last year, which I was very excited about. They had tremendous experience and networks around the globe, and they were interested in investing and supporting the vision which I had set.

“So with that renewed investor base we set about bringing in a whole lot of new products.’’

In the past year BTC Health has signed up eight new distributor agreements with companies from Greece, Italy, Germany and the US, and diversified its product range.

Dr Treagus said BTC Health identified a gap in the market, usually dominated by multinationals, and last December signed an exclusive distribution deal with an Italian company for its ECMO (extra-corporeal membrane oxygenation) devices.

BTC Health is valued at just $21m – after a near-doubling in its share price over the past month – but Dr Treagus, who holds just under 10 per cent of the company, said he believed it has good potential, with no need to raise cash at the moment, and the ability to fund growth internally for now.

Originally published as Treagus upbeat on BTC Health’s diagnosis of success