Blackfriar: It’s a question of who can put the best spin on a tale...

The high point was oil data company Getech, which announced an 80 per cent leap in annual pre-tax profits on Tuesday, sending its shares up 13 per cent.

Share in the Leeds-based group, which maps out areas around the world where oil may be found, have doubled in value since the start of the year

Getech is not only benefiting from historically high oil prices, it is also seeing strong demand for its proprietary technology.

It’s a complete turnaround from four years ago when the Leeds University spin-out, which helps oil giants Shell, BP and Exxon Mobil to decide where to sink new wells, was loss-making.

The group had a very tough recession when customers slashed budgets and deferred spending on studies, but now it’s on a roll.

However, it is a very different story at another Leeds University spin-out, skin research company Evocutis, which warned this week that if it can’t form trading relationships with other companies it may go bust. The Wetherby-based company has been in talks with firms in the US and Europe about its strategic options since the end of last year.

On Monday, the group said the outcome of its discussions remain uncertain and should none of them reach a successful conclusion, and in the absence of new finance, the directors will need to consider the financial viability of the company.

It finished with the ominous conclusion that it may have to look at the possible distribution of any residual value to shareholders, sending its shares plummeting by 30 per cent.

Evocutis has created a patented human skin equivalent called LabSkin, which emulates living skin tissue in research and product testing.

But the group has failed to make money from LabSkin and announced losses of £480,000 for the six months to January 31, up from losses of £370,000 the previous year.

Its goal was for global health and pharmaceutical companies to use LabSkin as a predictive model for the behaviour of cosmetic products on human skin, but unlike Getech it has failed to sign up the big boys.

Analyst Eric Burns at WH Ireland says that while universities spin out interesting innovative technologies all the time, the difference between the winners and the losers, from an investment perspective, is their ability to commercialise, ie, sell, it. He points to Getech and another Leeds University spin-out Tracsis, a niche transport technology business, as the two “outstanding” university spin-outs.

“Both Getech and Tracsis are superb at selling their technologies,” says Burns.

So how do investors spot a good investment from a bad ? On paper Evocutis looked like a sound investment.

Burns has an interesting take on this.

“Whilst a fair share of techies and academics are to be expected on the board and in senior positions, investors should look for strong leadership at the helm who will constantly question the return on investment.

“The academics may believe they have the world’s best product but the litmus test is who will buy it and has the company got the right people to sell it?”

Successful university spin-outs need hard-nosed business people to run them and operate them on a commercial rather than an academic basis.

For many academics the idea of hard selling conjures up a rather uncouth pastime.

Some have the tendency to believe that their technology is innovative enough that it stands on its own and will somehow win attention from the market. It won’t.

Andy Duley, director of commercialisation at the University of Leeds, says: “Underpinning all research is a commitment to working with partners across a range of sectors and industries.

“This helps to identify the shape and direction of research, and to ensure it has direct economic benefit.”

Sir Andrew Witty, chief executive of GlaxoSmithKline, is calling for a new era of collaboration between academia and business to help Britain keep up in the global economy.

Sir Andrew believes that the UK has a wealth of ideas, technology and human energy, but is losing out to foreign rivals who are better at exploiting research.

The point is that once a business is commercialised it needs someone at the helm who knows how to sell the products.