A positive sign of Icelandic’s survival during the pandemic was the completion of financing of four new venture funds, including one that focuses solely on life sciences and health technology.

The new venture fund, Iðunn, is based in Reykjavík, Iceland and is operated by Kvika Asset Management. It raised 56 million USD and its concept is to join experience in the biotech and health tech industry and seasoned investment banking team. The fund’s LPs are some of Iceland’s largest pension funds. Iðunn Venture Fund is to be led by Hilmar Bragi Janusson, CEO of biotech company Genís, a former Dean of the School of Engineering and Natural Sciences at the University of Iceland and VP of R&D at Össur. He tells us more about the new fund’s investment strategy.

“The fund’s investment period is set to be five years and our investments are mainly in the form of share capital, but the fund is authorized to grant loans to support investments in the short term and purchase convertible bonds. Agreements may be concluded on call and place options in connection with share purchases,” he says. “We invest in companies whose owners and managers are fully aware of the opportunities available to the companies, the key factors that determine their growth and those factors that limit their growth.”

Ready for the growth stage

The focus will be on investments in companies with sound business development plans and management ability to manage growth and prepare the companies for the next phase of upscaling, continues Janusson. “We invest in companies that are planning to, or are ready for, the growth stage.”

A good example is Coripharma, an Icelandic generic pharmaceutical company built on an experienced team with a novel approach to the generic pharmaceutical market, Janusson says.

Coripharma’s idea is to ensure the continuation of the manufacturing of pharmaceuticals in Iceland, and to do so with a competitive edge, based on the experience of the team, their strategic location and high quality of the site.

Another example is EpiEndo Pharmaceuticals that in August closed a 20 million EUR Series A financing round led by Iðunn Venture Fund and Flerie Invest, with existing investors ABC Ventures participating, along with the European Innovation Council (EIC) Fund joining the round. EpiEndo focuses on a novel barrier enhancing approach to the treatment of chronic inflammatory airway diseases such as chronic obstructive pulmonary disease (COPD). The financing secures funds to advance clinical development of the company’s lead compound EP395, which entered phase I clinical trials in April, through Phase IIa, targeting COPD as a primary indication.

A short path to clinical translation

Before making an investment, Hilmar Bragi Janusson and his colleagues consider management capacity, especially in strategic and proprietary functions, as well as access to market, he says.

“My advice to Nordic SMEs within life science looking to raise capital is to hire seasoned and experienced talent for key and strategic positions, and to make sure they have the capability to plan and execute the company strategy,” he advises.

Iðunn will invest primarily in Iceland but is authorized to invest up to 1/3 of the total size of the fund abroad. As for the Icelandic life science industry, Janusson sees several strengths.

“We have access to entrepreneurial enthusiasts from the field of life science, and there are interesting discoveries in the field of genomics and proteomics. There is also a short path to clinical translation and Iceland is an attractive location for an international talent pool.”

“We have access to entrepreneurial enthusiasts from the field of life science, and there are interesting discoveries in the field of genomics and proteomics. There is also a short path to clinical translation and Iceland is an attractive location for an international talent pool,” he says.

Photo: Hannes Frímann Hrólfsson, Einar Pálmi Sigmundsson, Hilmar Bragi Janusson, Daníel Kristjánsson and Margit Robertet (Kvika Group)