Nordic Life Science asked Claus Andersson, General Manager at Sunstone Life Science Venture, what Nordic venture capitalists are looking for today within life sciences and what current opportunities and challenges Nordic life science companies facing when it comes to raising capital.
Copenhagen-based Sunstone Life Science Venture is an independent European venture capital investment firm. Claus Andersson and his colleagues typically make investments in companies raising Series A or B rounds, but in some cases earlier. To date, Sunstone has invested in more than 45 life science companies, and several successful IPOs and large M&A transactions have been completed. More often than not they co-invest with other funds and institutional investors. Portfolio companies include Alligator Bioscience, Ascelia Pharma, Forendo Pharma, Galecto, and Zealand Pharma.
What kind of companies are you and your colleagues focusing your investments on, and at what stages?
“Sunstone invests in novel pharmacological therapies. We no longer invest in medtech and digital projects. We prefer novel molecular entities with a well understood mechanism-of-action that relates to the underlying pathology of the disease. We can invest in all stages, from seeding to Phase II stage, but we prefer some animal data.”
What are some of your basic criteria for investing capital in a company? What factors do you consider especially important?
“Financial planning must be robust and fund until infliction points. Deal and financing needs must also be attractive enough to build a full syndicate from the beginning. Finally, IP and if applicable sublicensee fee structures are especially critical.”
“Another mistake is not having invested in the competitive situation.”
Could you give an example of a common mistake among startups?
“Under-financing. Insufficiently discriminated clinical offering compared to existing therapies and not enough focus on CMC/manufacturing issues are also common. Another mistake is not having invested in the competitive situation.”
Could you mention a current strength or trend among Nordic life science companies?
“They are typically oriented towards building global companies and typically the scientific excellence is at a very high level. In life sciences there are many strong profiles available for start-ups.”
What effects has the COVID-19 pandemic had on your activities and abilities to invest in Nordic life science companies?
“We have not had any direct challenges apart from slight delays in the clinical trials, and the impractical situation as regards meeting face-to-face – investing in companies where we have not met the team face-to-face. Many companies have also initiated COVID-19 projects, which does not make commercial sense for many of them.”
“Be open to replacing founders with experienced professionals – if these are not already in place.”
What advice do you have for small and mid-sized life science companies looking to raise capital?
“Be bold and clear about the CLINICAL ambitions and where you will improve patient lives. Be open to replacing founders with experienced professionals – if these are not already in place.”
Photo of Claus Andersson: Thomas Rønn