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Balancing risk and vision

Tanja Dowe

Tanja Dowe, Head of Debiopharm Innovation Fund, gives us her insights from the hard but exciting work of building a life science business and what it takes to make it in an ever rapidly changing industry.

Tanja Dowe knew early on that she wanted to be a part of transforming innovation into successful businesses. She inherited an enthusiasm for helping patients from her father who was a surgeon and building up successful businesses from her mother who had a background in business administration. During her studies in applied microbiology and biochemistry at the Aalto University in Helsinki (formerly Helsinki University of Technology) she came across Nordic companies that had started from science and grown to be world leaders in enzymes, pharmaceuticals and diagnostics.

“After working in market research in the USA in the end of 90s, seeing the rise of the biotech clusters there and the enthusiasm around entrepreneurism, my direction was clear. I wanted to be a part of building the biotech industry,” says Tanja Dowe.

She started her own company in biotech market research, and through a merger she ended up in strategy and transaction consulting. “For over 15 years I worked with more than 80 companies from all over the world, Europe, US, and Japan, in commercializing innovations in the pharmaceutical and diagnostics fields and in recent years increasingly in digital health, before joining Debiopharm last year.”

And Dowe’s experience has given her a lot of insight into the life science industry, especially within digital health and healthcare solutions. “We are for example facing a big challenge of an aging population and the costs of healthcare. The healthcare sector is digitalizing and we are just in the beginning of it, it is not matured yet.”

She has seen the ups and downs of the industry and the effects of the financial situation in the world. When it comes to funding, she sees a positive trend, it is becoming easier but it is more realistic and has more educated money than it had before.

Precision medicine will change the future

In her new role, as the Head of the Debiopharm Innovation Fund, based in Switzerland, she and her colleagues want to invest in companies that change the way we treat patients and change the way we develop drugs. They aim to bridge the gap to medicine.

“Right now we are especially looking for companies developing solutions for precision medicine, like digital therapeutics, digital markers, clinical decision support systems, patient monitoring tools, smart drug discovery and development tools. These are areas where utilization of big data and artificial intelligence (AI) can create tremendous improvements for patient care,” says Dowe.

Her fund aims to grow up to EUR 150 million the next five years and focus investment on the companies known as smart data companies. “We believe precision medicine will change the future. Smart data companies covering the value chain from big data and AI to actionable outcomes and tools will have a big impact in the future market.”

In the smart data area they invest in companies in pilot or early commercial stages. They typically enter the companies in Series A, according to Dowe. “We are also intrigued in novel business models that the digital tools bring with them. The traditional business models will face great competition from the outcome based cost-efficiency the smart data companies can perform.”

Technically advanced in the Nordics

Tanja Dowe also underlines that these are fields where the Nordic countries stand really strong and are often more technically advanced than their international competitors. The latest investments and a big part of Debiopharm’s smart data dealflow have been Nordic companies.

“They use digital tools on a different scale than anywhere else. The Nordic healthcare sector is also more receptive to new tools and it is easier to test these tools in home markets. It’s a huge advantage,” she says. “However, they need to become more visible internationally. They need to come out to the public arena earlier and discuss the outcome their technologies enable and the benefits to the end-users. They need to increase communication and show themselves to the world.”

Being half Finnish-half Swiss and having worked in both countries she also sees some differences between Swiss and Nordic companies. “Nordic companies are often technically very advanced, but Swiss companies understand the healthcare markets better. Swiss companies have the advantage of a long history of the country in this field and the presence of world class players like Novartis and Roche. There’s a large pool of people in Switzerland who understand the medical and healthcare markets intimately.”

One of Debiopharm’s latest investments is Swiss-Finnish BC Platforms, a genomic and clinical data discovery company. The company, founded in 1997, is providing genomic data management and analysis solutions to address some of the biggest healthcare challenges. Their platform enables flexible data integration, secure analysis and interpretation of molecular and clinical information.

“They started building tools for the human genome project before it became a real commercial market and now, when  industry and healthcare are ready to adapt these tools, they are well placed to address the need with proven product,” says Dowe. “At the moment the company has access to 2 million patients and they plan to have 5 million subjects by 2020.”

“In September they also announced a new business of analyzing multiple dispersed collections of patients’ samples and data. This will greatly improve efficiency for customers like the pharamaceutical industry when looking for samples and data from specific patient profiles,” adds Tanja.

The life of an investor

A common mistake, whether you are a Nordic or a Swiss start- up company, according to Tanja, is something that you in a sense need to make; being too optimistic in sales.

”They are too optimistic about how quickly they will build up their sales and reach breakeven. But it is difficult because they need to be optimistic and have the drive. So you need to balance the enthusiasm about the innovation’s potential with experience in sales and of the market,” she says.

“This is also a challenge with my job,” continues Dowe. “To balance between risk and vision. I have to be visionary and brave but balance it with a risk, which is difficult. It is hard to say “we love your idea but we cannot invest”.” The fun part, she says, is her great colleagues and being part of a dynamic company with quick movers. “I also enjoy meeting start-up companies with new ideas and meeting people who have vision and passion in their lives.”

A day in Tanja’s shoes usually starts with a big cup of coffee “like a proper Nordic person”. She usually screens through new companies in their dealflow together with her team and they discuss which ones have the best fit with Debiopharm’s vision for the future.

“We often have telephone conferences or meetings with the management of companies in our preliminary evaluation or due diligence, in order to understand the technologies, business models and plans better. Part of my work day I dedicate to our portfolio companies, studying strategies or seeking advice with experts – or some days sitting in board meetings. From time to time I spend my day in events and conferences to hear about new technologies and to meet interesting companies that are looking for financing.”


3 * success

In order to value a company’s potential and possibilities to succeed Tanja Dowe especially considers three things:

1.     Management:

“It is the most important thing in a start-up – they can either make the business succeed or not. Good management has enthusiasm and vision, but has also the ability to identify risks, manage them and change direction if needed.”

2.     Technology:

“Strong technology is a basis for further growth and long term business. You have to know how to evaluate technologies and understand what works on the market.”

3.     Execution plan:

“The execution plan bridges the business idea and the reality – what is the expected path to market, can this team really execute this plan, and can we add value as an investor.”

 

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