Opinion: Where do all the cool Swedish life science companies go?

| Av Magnus Björsne and Jamie Smith | Tipsa redaktionen

It’s puzzling why Swedish life science companies hardly get a mention alongside Spotify, Skype, Klarna, King, iZettle, and other cool, innovative and successful ‘startups’ founded in Sweden.

With a strong academic base and world-leading infrastructure, Sweden is widely—and justifiably—recognized as one of the world’s foremost nations when it comes to life science research.

Yet, being good at research isn’t enough to ensure success in the globally-competitive life science industry. Countries like Denmark, the Netherlands, the USA and Israel, who pride themselves on developing commercial capabilities, attracting global private capital and fostering an entrepreneurial business climate, are perceived to be growing their life science industries faster.

Turning science into a therapy that satisfies an unmet medical need is a complex task. Turning that therapy into a business success takes that complexity to a completely different level.

At the AstraZeneca Exchange event in Gothenburg, we turned to senior life science leaders to learn the biggest challenge small and medium sized enterprises face when it comes to accelerating growth in the life science industry. Their answer, besides raising capital, was aligning scientific and commercial strategies.

By getting an early and firm grip on commercial forecasts and the intricacies of market volumes, market shares, brand differentiation, reimbursement and other external influencing factors, entrepreneurs can increase their chances of developing the full commercial value of their innovations and make value-based investment decisions sooner.

Novel approaches to strengthen business acumen and commercialization could include:

  • Commercially established companies/entrepreneurs further embracing the sharing economy to find ways to make infrastructure, insights and experience available to others;

  • Ensuring that academia are incentivised to prolong the nurturing of innovations in an academic setting;

  • Investors helping life science startups to focus on long-term value creation rather than on short-term exit strategies.

In their 2017 global outlook report, Deloitte encourage life science stakeholders to pay close attention to connecting with customers & consumers. They see this as a key trend that can positively or negatively influence growth plans.

This aligns with more feedback from the AstraZeneca Exchange participants who prioritised helping growth companies connect with customers, suppliers and other actors in the life science ecosystem as a key factor to promote entrepreneurialism in the life science industry (see figure 5).

Increasingly engaged and empowered health care consumers are demanding services and solutions that are digitally-enabled and customer-centered. We can all contribute to facilitating interactions across life science value chains, between large and small companies, and with patients across new channels.

At AstraZeneca, we are experimenting with the BioVentureHub which, besides enabling small and medium-sized life science companies to tap into the scientific and commercial expertise of big pharma, is also stimulating a ‘4D life science reality’ where Drug, Device, Diagnostic and Digital health companies are co-locating, connecting and collaborating to address customer and patient needs in new ways.

Progressing a promising drug or medical device through the ‘Valley of Death’—out of the labs and through initial and costly clinical trials—often requires high levels of funding. In Scandinavia, the availability of venture capital is low compared to many other countries (see figure 7) and is commonly deployed later in the life science development lifecycle.

This represents a delicate challenge emphasised by the senior life science leaders at the AstraZeneca Exchange event who identified the Valley of Death as the priority area for improved governmental funding (see figure 6).

The recent announcement by Samvest AB, the Swedish government’s newly formed venture capital investment company, of an SEK 160 million investment in a specialized life science fund is an important step in the right direction.

Besides more money, we also need to ramp up our project assessment and commercial forecasting capabilities to ensure money is being used efficiently and effectively. It is really difficult to determine at an early stage which projects have the potential to grow beyond the Valley of Death.

As an industry, we need to dare to share. Finding more open and systematic ways to exchange learnings from our successes and failures will go a long way to help us assess and validate which innovations have the best chance of progressing further along the path to commercial success. This knowledge and expertise can also be harnessed to add value to promising early-stage, bigger bet projects.

The results from the Astrazeneca Exchange survey are an indication of the growing need and willingness within the Swedish life science industry to embrace more business-focused, entrepreneurial and value creation-based commercial perspectives.

Against the backdrop of an increasingly aging population, spiralling healthcare costs and game-changing digital technologies, we find ourselves with a truly unique and exciting opportunity to drive the transformation of global life science business models.

The challenge for us as a life science community is twofold:

  • We need to develop strategies and implement plans that enable life science entrepreneurs to become exposed to more business acumen, more entrepreneurial experience and more focus on value creation.

  • We need to enable the Swedish health care system to act as early adopters and partners in developing new health care value propositions.

An even more competitive Swedish life science industry developed through stronger, cross-segment collaborations and more selective public financing, backed up by sharpened entrepreneurial skills and commercial capabilities, will attract more capital and more competence.

Having developed their business skills, company founders will be much better equipped to know how to manage this capital, and how to control the growth of their company for longer.

Before long, successful entrepreneurial life science companies will emerge as role models, similarly to Spotify, Skype, Klarna, King, iZettle in other industries, to inspire other life science entrepreneurs. And so the virtuous circle goes on...

By: Magnus Björsne, ceo, and Jamie Smith, communications, Niklas Magnell, AstraZeneca BioVentureHub.

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