The challenge of the pandemic is by no means over, and I do not wish to reduce the impact that it is still having on people’s lives all over the world. However, I will stick out my chin and say that already now we see that the Nordic Life Science Sector will come out stronger on the other side.
Stronger in the sense of being more capitalized, experienced and well equipped to take on all the other health challenges requiring other attention than before the pandemic hit. In fact, it is already happening. A recent survey by SwedenBIO of companies within drug discovery and development headquartered in Sweden shows that, compared to the situation one year ago, their confidence in projecting future growth has increased; 62% of companies have a more positive view of their projections now compared to before SARS-CoV-2 hit and only 8% report the opposite. Also, 80% report that they will expand by recruiting more staff or consultants in the coming year.
Late spring last year, I was interviewed by a number of financial magazines about the access to funding for the life science sector. The interest in our sector was of course very high, since we are the ones to deliver the solution to this world wide crisis, but also since financial reporters are well aware of the detrimental dependency that life science companies have for capital. Be it angel funding, VC, or stock market, life science companies need money!
There is no REAL obstacle affecting your lane but the mere sense of something major and traumatic going on will make drivers slow down. It is human to pause and ask, “What is happening?”
At the time, it was a fact that the financial situation for our sector had become more restrained, all over the various funding sources. Why? Well for no good reason really. I would like to explain it by the queues on the motorway piling up after an accident in the opposite driving lane. There is no REAL obstacle affecting your lane but the mere sense of something major and traumatic going on will make drivers slow down. It is human to pause and ask, “What is happening?”
Funding bodies are no different. In a rapidly changing scenery, they slowed down for a while, to assess the new situation. This assessment, although quite brief in time, affected our sector. For those life science companies who were just about to start on a venture round, the effect was even detrimental. The uncertainty about the future that we all felt, investors alike, can make even a small hack in your business plan impact on prospects to bring that new drug or treatment to the next clinical phase.
And rightly so. There is no reason why new therapies for cancer, diabetes or Alzheimer’s should not get funded due to COVID-19.”
Only a few months later, in early autumn, the picture we got from member companies as well as funding bodies across the Nordics was that the wind had changed. The obstacle was still there, and in need of attention from our sector, but was no longer affecting the lane of innovations. And rightly so. There is no reason why new therapies for cancer, diabetes or Alzheimer’s should not get funded due to COVID-19.
The stock markets are experiencing an increase in the number of life science-IPOs. We have also seen a number of new financial actors join the scene.”
The financial situation we are now experiencing is one in which life sciences is becoming increasingly attractive for investors. Nordic Life Science Days 2021 is attracting more international investors than ever before. The stock markets are experiencing an increase in the number of life science-IPOs. We have also seen a number of new financial actors join the scene, including Eir Ventures and DNB’s new biotechnology fund. The 400 MSEK that the Swedish government boosted Almi Invest with also helped, as well as more generous rules for institutional capital to co-invest in life sciences.
This is something to rejoice about. At the same time, with wheels spinning fast, we wish to take our responsibility to make sure that investors receive the information they need to make informed decisions. To this end, SwedenBIO, together with the main financial actors in the Swedish life science ecosystem, have developed disclosure recommendations for development stage companies. The idea of these recommendations are to function as an industry standard, encouraging companies to carefully think through their business cases and be transparent about what the investor’s money will be used for. The information requests are at a detailed level and the companies are requested to “comply or explain.”
We are proud to work together to ensure not just a stronger life science sector, but also becoming smarter and more sustainable to ensure long-term growth, ultimately to the benefit of patients in the Nordics and beyond.”
The Nordic life science sector is growing quickly, and it would not be possible without a strong ecosystem surrounding it, financial markets being one key element of this. We are proud to work together to ensure not just a stronger life science sector, but also becoming smarter and more sustainable to ensure long-term growth, ultimately to the benefit of patients in the Nordics and beyond.
Text by Helena Strigård, Director General, SwedenBIO