A sector in good shape despite the Covid-19 pandemic

ITEMAS last webinar showed the optimism of healthcare investors

ITEMAS last webinar on Investment in Covid-19 times (“Impact of Covid-19 in private and corporative investment) reflected the investors optimism regarding future investments in the healthcare sector despite the economical crisis caused by the Covid-19 pandemic. Speakers included Clara Campàs, Managing Partner and Co-founder at ASABYS Partners; Lluís Pareras, Founding partner at Invivo Capital; Ion Arocena, General Manager at ASEBIO (Spanish Biotech Companies Association) and Josep Lluís Falcó, CEO and Co-founder at GENESIS Biomed and investment vehicle GENESIS Ventures.

The session was presented by Ester García from Instituto de Investigación Sanitaria Aragón (IISA) and moderated by Diego Velasco, Innovation Manager at Instituto Ramón y Cajal de Investigación Sanitaria (IRYCIS).

One of the main conclusions was that unlike the rest of the economy, the life sciences sector in Spain has not been as badly hit by the crisis caused by Covid-19. Most innovation projects are going ahead and a great number of investment rounds are being closed. In fact, 2020 might set a new record high in the number of investments, as pointed by the speakers. “There are 700 million euros available for investments in healthcare” said Clara Campàs, who said that Spanish startups “have also the capacity to attract international investment”. According to Ion Arocena, “Covid-19 has revealed to investors the potential of the healthcare sector”. Lluís Pareras explained that “our sector is not affected by the external ups and down of the economy, what is important is the quality of the innovation projects”. The fact that life sciences funds completed their fundraising during the period 2018-2019, just before the coronavirus crisis, “guarantees that there will be investments in healthcare”, said Josep Lluís Falcó.

Clinical trials suffered with the pandemic

The most important impact of Covid-19 in healthcare innovation was the interruption of clinical trials during the most critical stage of the crisis. ASEBIO is working on an study to analyse the impact of the pandemic in the biotech sector and the preliminary results show that it has been quite mild. “If the sector had not been so mature the consequences would have been worse” said Arocena, who highlighted positive changes prompted by the crisis: “regulatory agencies have shown flexibility and allowed the use of telemedicine and patient monitorisation”. This enforced break has given companies time to focus on their business plan, planning their fundraising strategy and all other back-office tasks” pointed Falcó. Pareras criticised that some companies have diverted their initial focus with the goal to apply to Covid-19 funding calls and he advised entrepreneurs to “keep the the focus and avoid changing the scope of their innovation”. According to Campàs, the fact that biotech sector has been “historically under-funded” is the reason why companies are applying to these calls despite their innovation is hardly applicable to the Covid-19 crisis.

A good time to start a company

Despite the difficult moment, investors agreed that it is now a good time to start a company as there is a growing interest from private funds and new innovation funding calls from public entities. “Investors have realised that the biotech and healthcare sector is essential for a welfare society. This year there will be a new record high of investments”, said Pareras. Falcó explained that GENESIS Biomed has been active creating new companies: “In the last months we have founded two companies and we will create four new ones until the end of the year”. The consultancy firm is assisting Madrid’s Regional Health Department in the creation of four spinoffs from hospitals in the capital city. The region is seeing a new wave of entrepreneurship with a great number of new research projects turning into new companies.

The speakers highlighted that most investment funds are based in Catalonia but that are not geographically biased when investing in start-ups, what counts is the quality of the innovation. However, as pointed by Clara Campàs, “it is important to make sure that the new company is  legally constituted in a city able to attract international talent and investors”. Ion Arocena pointed that Catalonia “is a role model as it has been working for many years to stimulate research and innovation, promoting the public-private collaboration”.

He also highlighted the “important driving force” that is ITEMAS to promote innovation in the Spanish biotech sector. The platform has a fundamental role supporting innovation in healthcare institutions across Spain and promoting entrepreneurship. Promoted by Instituto de Salud Carlos III, it has 184 members including healthcare centres, private companies and public organisations. Their main goal is to promote R&D projects that improve healthcare and benefit society.

GENESIS Biomed thanks ITEMAS the opportunity to sponsor the webinars series on Investment in Covid-19 times, which have been a participation success with over 500 professionals connected to the four webinars celebrated in June and July.

The documents related to the webinars have been published in ITEMAS website.

You can read the recap of the webinars and see the visual thinking illustrations of artist Fernando Viejo-Fluiters in GENESIS Biomed website:

ITEMAS is in favour of the creation of a fund or investment instrument for early stage projects
How to raise private funding: evaluation of an innovation project
A solid science and the right patent: keys to raise private funding