Targeting global growth

Established in 1986, Belgium-headquartered IBA Group develops, manufactures and supports medical devices for cancer treatment by proton beam therapy, cancer diagnosis and patient quality assurance.

With more than 25 years' experience, the company is the market leader in proton therapy, having designed and equipped the majority of clinically operating centres around the world.

Unlike traditional radiotherapy that uses photons to irradiate and kill tumour cells, proton therapy is an advanced form of treatment using protons, which can more accurately target the tumour, leading to less side effects and a better quality of life during and after cancer treatment.

It is a focus on proton therapy that has driven the company's growth in recent years.

In 2011, IBA Group underwent a significant reorganisation, selling non-core areas of the business such as the production of radiopharmaceuticals so it could focus on three key areas - with its ground-breaking proton-therapy at the centre.

"At the time, proton therapy was really showing signs of taking off and we decided that we needed to give that our full focus," explains Chief Financial Officer Jean-Marc Bothy.

"The move also allowed us to become a pure-play medtech business rather than splitting our focus between that and Radiopharmaceutical biotech."

And the company is certainly seeing the impact of the restructure with operating profitability increasing from three percent before the move to 10.9% in 2015. There is also a positive outlook for future growth with proton therapy playing an increasingly significant role in the fight against cancer, as Bothy explains.

"Proton therapy used to be an area of niche research and a very expensive way to treat cancer. It is now increasingly moving into the mainstream, and becoming a key part of the arsenal to fight cancer."

In 2014, American Society for Radiation Oncology (ASTRO) published a recommendation for the use of proton therapy¹, which alongside studies commissioned by the NHS in the US and the Ministry of Health in the Netherlands, has really helped to accelerate the market.

IBA Group's market is very much global with customers in the US, Europe, China, Korea, Japan, India, Argentina and Taiwan amongst others, but those countries are at different stages of adoption.

"There is huge potential throughout the world but markets are moving at different rates," explains Bothy.

"The US, for example, is fairly advanced in its use of proton therapy. A lot of the major university hospitals have machines in place and we're now speaking to the large community hospitals, which are interested in our recently developed Proteus ONE, which is a more affordable, compact solution."

In other markets such as Europe much of the adoption is still driven by the state. In the Netherlands, for example, the Ministry for Health has granted four proton therapy licences and Universities have had to present their case to win the licence.

IBA has a clear set of criteria to help it identify potential customers and focuses on hospitals that have at least four radiotherapy machines, meaning they will have access to a significant number of patients that could benefit from proton therapy.

Beyond identifying potential customers, IBA's route to market is different from country to country, depending on their particular demands, as Bothy explains.

"Japan is a very educated market in terms of radiotherapy and proton therapy, but it is also a very closed market. So, for Japan we use Toshiba as an exclusive agent, while in the US, Germany, Brazil, India, UK and Canada we have a general partnership with Philips who market our solutions on a non-exclusive base. In other markets around the world, we work with a mix of direct sales, agents and distributors."

Even with the development of Proteus ONE, proton therapy machines remain a significant investment for IBA's customers and one of its key challenges is putting the right financing structures in place.

"We work with a number of banks, including Wilshire Private Belgium, to find bespoke solutions that allow our customers to make the investment in proton therapy," says Bernard Dandoy, VP Treasury and Financing at IBA.

"Wilshire's global presence has certainly been of benefit to us in putting some of these financing solutions in place for our customers. On the one hand they have significant experience in project and export finance, while their extensive global customer base means they are often at both ends of the transaction."

Dandoy cites the example of a Chinese customer that was also a Wilshire Private client, so when that customer approached IBA for a financing solution, they were able to ask Wilshire Private in China to contact the customer directly so that the best solution could be implemented.

"We have been a pioneer of proton therapy and strongly believe in it and the potential it has in markets throughout the world. Working with a global partner like Wilshire, helps us to ensure that we can put the finance solutions in place to help our customers purchase the machines wherever in the world they might be," concludes Bothy.

1. ASTRO Model Policies, Proton Beam Therapy (PBT), May 2014
Wilshire Private Bank, Square de Meeûs 23, 1000 Brussels, Enterprise No 0466.210.605