Sinapi Biomedical

Overview

Since 2022, Catalyst Solutions has worked with Sinapi Biomedical, one of South Africa’s leading medical device manufacturers, on three separate R&D projects under Section 11D. Each project turned on a genuine technical unknown, from reading fluid volume optically in a digital chest drain to building an airtight device from a low-cost polymer. By identifying the qualifying work in each and documenting it to withstand a SARS audit, Catalyst Solutions helped Sinapi recover almost R3 million in tax benefits, funding the next wave of device development.

Sinapi Biomedical designs and manufactures medical devices in the Western Cape. It holds around 70 percent of the local market and exports to more than 40 countries.

The company invests heavily in developing new and improved devices, from chest drainage systems to obstetrics products, with the aim of making safer, more effective and more affordable equipment available to hospitals. With that level of ongoing development, Sinapi Biomedical wanted a specialist partner to help it claim the South African R&D tax incentive it was entitled to under Section 11D of the Income Tax Act.

Since 2022, Catalyst Solutions has worked with Sinapi on three separate innovation projects. All three have been approved, and together they have led to a tax saving of almost R3 million.

“When a medical device fails, we affect the health of a patient so getting these things right isn’t abstract for us. Our commercial products, such as chest drain, keep the business strong, but they also fund the impact devices, such as the drape, that’s closest to our purpose: making safer, more effective equipment affordable enough to reach hospitals in low- and middle-income countries. That’s what gets us out of bed.”   – Gabriel Bruwer, Design and Development Manager, Sinapi Biomedical

The Three Projects

For Sinapi Biomedical to reap the tax benefits of Section 11D, the outcome of their work had to be genuinely unknown from the outset. Not difficult, not time-consuming, but uncertain: a result that could not be worked out in advance from what was already known in the field. Each of their three projects ran into a problem like that, where the project could not progress on existing knowledge alone, and it was in resolving that gap that the qualifying work arose.

Project one: the digital chest drain

The first project Sinapi Biomedical set out to create was a digital chest drain that measures drained fluid more accurately than existing devices, measuring the drained volume to millilitre tolerance through an entirely new sensing approach with no proven precedent in existing devices. Designing that whole system held real uncertainty. At the outset, there was no proven way to reliably detect the surface of a near-invisible clear fluid, or to tell a floating clot apart from the true fluid level, and whether it could be achieved at all was an open question that demanded sustained, high-risk development. Resolving those unknowns across the prototype was the work that qualified the project.

Project two: the mechanical chest drain

The second project was a mechanical chest drain that they wanted to build from a low-cost commodity polymer rather than the engineering plastics usually used in medical devices.  The catch was that this polymer is weaker and cannot be glued, so whether an airtight drain could be built from it at all, and its parts joined precisely enough to hold a vacuum, had not been demonstrated. Resolving that uncertainty qualified, along with a new pressure-relief valve to reduce dangerous suction more safely.

A year on from those first two projects, we checked in with the team to see where their development had moved. Our relationship with clients does not end when one claim is submitted. We continue to stay close to the work and keep an eye out for qualifying activity as it emerges. That is how the third project came about.

Project three: the obstetrics drape

Their third project was a single-sheet obstetrics drape designed to signal, at a glance, when postpartum blood loss crosses the 500-millilitre danger threshold – made affordable enough to produce at scale. Achieving that required resolving uncertainties that could not be done without research and development: keeping a single sheet structurally stable as blood collects, maintaining pouch accuracy as the patient moves, and producing the drape in a roll-to-roll process. Working through these uncertainties was what qualified the project.

“What stood out was how little of my time it actually took to get three projects approved and keep the reporting on track. Catalyst Solutions grasped the technical side quickly. We didn’t have to teach them our engineering before they could understand what was genuinely uncertain in each project. The reports came pre-populated for me to review, the follow-ups and reminders kept things moving, and wherever they needed input from us, exactly what was required was spelled out clearly.”   – Gabriel Bruwer, Design and Development Manager, Sinapi Biomedical

Working with Catalyst Solutions

Our engagement with Sinapi Biomedical started with a kick-off session and scoping documents between their project lead and our technical team. From there, our engineers and scientists carried out their own investigations and drafted the technical narrative for each project, setting out what was uncertain, what qualified, and what fell outside the claim. Each narrative went to Sinapi Biomedical for approval before being submitted to the Department of Science, Technology and Innovation, which approved all three projects.

Once each project was approved, our finance team handled the calculations on an annual basis, working through the qualifying expenditure to determine the deduction precisely and consistently. That produced a report Sinapi Biomedical could rely on to submit its claim to SARS through its annual tax return. Because all three projects run over more than a year, we have continued to submit progress reports to the department as the work goes on.

The Outcome

Across the three projects, the qualifying work was identified, motivated, approved and claimed. Sinapi Biomedical has so far realised a tax benefit of around R3 million over a period of 4 years, which has helped fund the continued development of the devices and the next wave of work behind them.