NLS has asked industry organizations in all the Nordic countries about the situation and the impact of the COVID-19 pandemic.
The COVID-19 pandemic has turned societies in the Nordic region, as well as in the rest of the world, upside down. Countries have temporarily shut their borders, entered lockdowns, imposed limited gatherings, and healthcare systems have been brought to their knees. The world is facing a severe human health, as well as an economic, crisis, and all industries, including life sciences, have been and will be affected.
Small and vulnerable companies
Helena Strigård, Director General of SwedenBIO, the national non-profit association for the life science industry in Sweden, agrees that the situation is severe for the life science industry. ”Clinical trials have halted or been delayed, stocks are going down, and a lot of companies could risk bankruptcy,” she says.
The Swedish government has so far presented several crisis relief packages to protect businesses and jobs. It has for example, as of March 27th, presented a capital contribution to Almi Företagspartner in order to increase their lendings to small and mid-sized companies and they have also increased the lending limit for the public Swedish Export Credit Corporation (SEK).
“The government’s efforts are in part missing the target for this industry,” said Strigård in March. “Only two percent of all financing activities in this industry in 2007-2018 were bank loans, and a big part of the staff are consultants. Swedish life science companies need public ownership, which in turn can work as a magnet to attract private capital.”
The life science industries in the other four Nordic countries are affected in a similar way to Sweden, and so far their governments’ efforts and crisis relief packages are both similar in some aspects but also differ somewhat from each other. They are also still updated.
“Many companies in this sector are small and vulnerable. Some report that investments deals are on hold, and they are hoping that the government will provide some special support.”
”In Iceland, everyone is focused on keeping their people safe in order to secure production in Iceland,” said Erna Björnsdóttir, Manager at Invest in Iceland in March. “Many companies in this sector are small and vulnerable. Some report that investments deals are on hold, and they are hoping that the government will provide some special support.”
For example, as of end of March it was announced that ISK 400 million will be allocated to the Technology Development Fund in Iceland.
The Finnish government has also proposed measures to secure jobs, people’s incomes and facilitate companies’ financial situations.
”We have quite many measures that the government is doing for the companies at the moment, especially for the small and midsize companies. For example Business Finland has new financing instruments,” says Carmela Kantor Aaltonen, CEO of Finnish Bioindustries. The publicly owned Finnvera’s warranty assurance has been increased from 2 to 10 billion EUR, Kanto Aaltonen adds. ”But the problem is cash money, which is low. Companies have difficulties to pay rents, salaries etc.”
An interest in normalization of the situation
The Finance Ministry of Denmark has also provided measures and revealed that they are prepared to reach out to assist small and medium-sized companies, as well as entrepreneurs.
”The conduct of clinical trials is affected for example, either halting initiation of new studies and/or halting recruitment to studies,” said Per Spindler, Director of BioPeople, the Danish life science cluster, in March. ”The load on the capacity of hospitals and priorities due to coronavirus diseased patients are the main reason. In addition, many private and public labs operate at reduced pace.”
There are financial investments from government, the Innovation Foundation, Novo Nordisk Foundation and others, to support coronavirus related research and development, says Spindler. ”EU institutions such as the Innovative Medicines Initiative (IMI) are also increasing investments and calling for partnerships related to coronavirus. In my opinion, this is very appropriate in view of the pandemic crisis.”
”The situation for Danish biotech and life science companies relates not only to normalization in Denmark or the Nordic countries, but it relates also to countries abroad in terms of supply chains, partnerships, markets, hospital capacity, etc.”
Life science companies have an interest in normalization of the situation, both research-wise and investment-wise after the pandemic crisis has eased. ”The situation for Danish biotech and life science companies relates not only to normalization in Denmark or the Nordic countries, but it relates also to countries abroad in terms of supply chains, partnerships, markets, hospital capacity, etc,” reminds Spindler.
The industry is also engaged in the supply chains for hospital equipment and protective utilities for coronavirus patients and health care workers, adds Spindler. Other industry sectors are re-orchestrating manufacturing processes, e.g. for the production of anti-infective agents.
The uncertainty is the major challenge
The Norwegian government has also introduced several important economic measures to fund COVID-19 clinical studies in Norway and to help the business sector through this challenging period.
Ketil Widerberg, General Manager at Oslo Cancer Cluster (OCC) states, ”In the short term, this funding is important to keep momentum going for our start-up companies in the cancer research field. In the longer term, current initiatives around clinical trials and health data for COVID-19 can be important building blocks to develop a sustainable health industry in the Nordics. Public and private collaboration is now more important than ever.”
For example, together with Abelia and other Norwegian health clusters Oslo Cancer Cluster (OCC) has proposed to the Minister of Health and Care Services and the Minister of Trade, Industry and Fisheries the assembly of an advisory council consisting of representatives from the Norwegian health clusters, in close collaboration with the governmental funding bodies.
“At the Oslo Cancer Cluster Incubator we are thinking of new ways to utilize the shared spaces. As we enter the era of social distancing, it is increasingly important that the laboratory can offer enough equipment to the researchers and that we have the infrastructure in place to create digital meeting places.”
A big challenge for many of OCC’s biotech companies is to secure the next capital round from investors. ”Many companies, who are dependent on their next fundraising round, are now experiencing great uncertainty about the future. We are in a continual dialogue with the government’s funding bodies to see how government can help. The uncertainty is the major challenge,” Widerberg says.
“At the Oslo Cancer Cluster Incubator we are thinking of new ways to utilize the shared spaces. As we enter the era of social distancing, it is increasingly important that the laboratory can offer enough equipment to the researchers and that we have the infrastructure in place to create digital meeting places,” adds Bjørn Klem, General Manager, Oslo Cancer Cluster Incubator.
Hope at the end of the tunnel
The Nordic life science industries face severe challenges due to the ongoing financial crisis, but we still need to remember that nothing has actually changed in the project portfolios as such, Helena Strigård adds. ”These are promising, viable companies in what is an industry for the future. With the right measures at the right time, we will turn this into a strengthened industry instead.”
“With the right measures at the right time, we will turn this into a strengthened industry instead.”
In a statement to her members Strigård also writes that now is the time to collaborate and listen to each other; authorities, academia, healthcare and industry. Joint strengths and collaborations with and within the life science industry will help societies fight the pandemic. She also emphasizes that we need measures to safeguard the role of life science companies in societal preparedness and also, our strength in pharmaceutical production, which is critical in a pandemic.
Erna Björnsdóttir agrees that it is essential that the life science industry is safeguarded.
”My colleague attended a webinar about the effect of COVID-19 on foreign direct investment (FDI) around the world. The prediction was that life and health science would be the first sectors to recover after the crisis and thus it is very important to provide the necessary support to keep these running,” she says.
”Overall, companies that can help increase the capacity of hospitals and labs with corona-related equipment and labs are being explored for opportunities in Denmark. The government is also exploring opportunities with the labs of e.g. Novo Nordisk and University of Copenhagen to increase the capacity of testing etc. In my opinion, this is all great news, and feeds well into solutions that address the challenges that change rapidly in the growth of the pandemic,” says Per Spindler.
“Since the novel coronavirus came to Norway, we have seen a willingness to test widely, to gather health data and to understand the virus. The infrastructure, which has now been set up to assemble and analyze data, can also be used for future research in cancer.”
Every Nordic country has great examples of public and private initiatives, collaborations and funding opportunities for research related to the new coronavirus.
“Since the novel coronavirus came to Norway, we have seen a willingness to test widely, to gather health data and to understand the virus. The infrastructure, which has now been set up to assemble and analyze data, can also be used for future research in cancer. We are further motivated by the fact that more people are acknowledging the importance of understanding diseases and our immune system in order to develop new treatments,” says Ketil Widerberg.