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Swedish life sciences: Options to finance operations broadening

Financing

A survey among SwedenBIO’s members shows that the growing Swedish life science sector has during the last ten years extended its possibilities to finance its operations.

The results, published today in a report entitled Bridging the Gap, also show that the industry enjoyed a record level of refunding activities in 2018, securing new share capital of SEK 6,9bn in a broad range of life science companies.

Key information about strengths and weaknesses of the Swedish capital market

The report, authored by Sten Westerberg at Westerberg Kommunikation, was initiated and financed by the regional investment promotion agencies Invest in Skåne, Business Region Göteborg and Invest Stockholm in collaboration with SwedenBIO, the Swedish life science industry organization.

“We initiated this study to gain detailed knowledge about the financing history of a limited set of Swedish life science companies. Complemented with recent quantitative data from the strong Swedish stock market, this report gives us key information about strengths and weaknesses of the Swedish capital market, further guiding us in our daily work improving the conditions and chance for continued success for the Swedish life science industry,” states the authors in the report.

Less reliant on one single category of investors

A total of 46 companies responded to the survey, representing 361 financing events. And based on the outcome of this survey, it was concluded that the number of means to fund operations in the life science sector has increased during the period 2007-18.

The most common source of funding, made up of private equity investors, decreased its share of total financing activities during the course of the period, while all along continuing being the most common type of funding. Both public stock markets, and soft financing, continuously gained shares during the study period.

The most important contribution to the decrease in significance for private equity was an increased number of Initial Public Offerings with subsequent new issue of shares. Another important factor behind the decrease in private equity was an increase for soft financing sources, both public like Vinnova and Almi, and European programs, like Horizon 2020. Together, these two categories represented 23 percent of all financing activities during 2018.

“In a sector with substantial capital requirements it is reassuring to see companies becoming less reliant on one single category of investors,” states the authors.

A record level of refunding activities

They also conclude that the three main public stock markets – Nasdaq Stockholm, First North and Spotlight – enjoyed a record level of refunding activities in 2018 (although the number of listings on these markets decreased), securing new share capital of SEK 6,9bn in a broad range of life science companies. Initial public offerings in 2018 amounted to SEK 2,0bn in 2018, bringing last year’s total investments in the public segment of this sector to SEK 8,9bn.

Data from the survey also demonstrated that the element of foreign investors was low during this period, but there was an increase during 2018.

This report, authored by Sten Westerberg at Westerberg Kommunikation, was initiated and financed by the regional investment promotion agencies Business Region Göteborg, Invest in Skåne and Invest Stockholm in collaboration with SwedenBIO. Key data was financially supported by Industrifonden.

Download the report here: https://swedenbio.se/om-life-science/rapporter/


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