Innovation Report

 
report

Meet the BaseLaunch Startups

11.03.2018

Six of the BaseLaunch startups recently started Phase II. They received either grants up to 250,000 Swiss francs or gained free of charge access to BaseLaunch laboratory and office space at the Switzerland Innovation Park Basel Area. Hear what the startups, the BaseLaunch team and selection committee members experienced in the first year. Find out more about what makes BaseLaunch unique.

The BaseLaunch accelerator is now open for applications for the second cycle. Entrepreneurs with a healthcare based project or a game-changing innovation in diagnostics, medtech or related field at the pre-seed or seed funding stage are invited to submit their applications to the program.

Following the application deadline on 14 May, promising projects will be admitted to the accelerator program for a period of 15 months. In phase I, the startups will benefit from the support of industry experts, office- and laboratory space free of charge and access to healthcare partners. After three months, they will be invited to present their idea to the selection committee. They will determine which promising startups will proceed to Phase II that runs for one year.

BaseLaunch is backed by five industry leaders — Johnson & Johnson Innovation, Novartis Venture Fund, Pfizer, Roche and Roivant Sciences. Other public and private partners such as KPMG and Vossius & Partner also support the initiative.

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“Basel is well positioned”

09.02.2017

‘Uberfication’ will change marketing and sales in the pharmaceutical sector, says Patrik Frei. This is already seen at healthcare companies, where digitalisation is making inroads. Business angels and family offices are paying an increasingly larger role in awarding venture capital, according to the CEO of Venture Valuation. Venture capitalists are coming aboard only later.

What does Venture Valuation do?

Patrik Frei: We conduct independent assessments of companies in the life sciences sector. Our clients are looking either for capital or investments. We then try to determine a fair value and indicate a range. The price is then, of course, a matter of negotiation.

How do you rate Johnson & Johnson’s acquisition of Actelion – well negotiated or a fair value?

Actelion was already a success story before hand, one of the few biotech companies to have organised its own sale. The commercial part will now be split off while the research and innovation will remain in Switzerland. Generally speaking, this is a highly successful exit and sends an important signal to Basel as a centre of life sciences – irrespective of the fact that additional capital is again flowing into the industry.  

Is it possible to observe a consolidation process, one that could also have undesired effects?

No. While there is a concentration of large pharmaceutical companies at the top, this also creates opportunities for new companies. Start-ups have the advantage that they are faster and more agile. Some of them are acquiring others and becoming medium-sized companies. An example of this is Shire. Others are being acquired by the bigger companies, which in turn feeds new capital into the sector. I think that this innovation ecosystem is fundamentally healthy.

The US seem to profit more than Europe or Switzerland. Is there far more venture capital there?

There is four times as much venture capital in the US than in Europe, it’s true. But the number of companies is similar. In Europe, smaller amounts are usually invested and start-ups have to survive more financing rounds, while in the US extremely high amounts are committed in one go. Incidentally, investors in Asia are far more cautious than in Europe. It should also be noted that the investor landscape is changing in Europe. There are less and less traditional venture capitalists, while corporate venture funds, family offices and business angels are gaining in importance. These are often people who have made their own wealth in the sector. But this doesn’t mean that it has become easier for companies looking for capital; private investors are not only more cautious than venture capitalists, they also tend not to operate openly.

In addition, many institutional Europe investors prefer to give their money to large American venture capitalists, which are more visible and have been more successful in the past. Overall it can be seen that venture capitalists are coming on board later, creating a gap in expansion financing, especially in Europe. 

You had the opportunity to moderate an event in January about the future of the pharmaceutical industry at the JPMorgan Healthcare Conference. What came out of it?

One of the main themes was the ‘uberfication’ of the healthcare sector. Today, marketing and sales are firmly in the hands of the big pharmaceutical companies, but this could be challenged in the future by IT companies. We still don’t know how this will look like exactly, but it’s clear that new distribution channels will become possible through digitalisation.

But regulations could also slow this down.

Patients are increasingly informing themselves over the internet, and there are more and more digital diagnostic tools. Over a longer period of time, there could be some development there. But there’s no doubt that this also certainly depends on regulations.

How important is the choice of location for life sciences companies today?

We also discussed this in San Francisco. The trend is towards multiple sites - a presence in the US, development in China or even now in India, headquarters in Switzerland. Smaller biotech companies are also addressing such issues.

Where does Switzerland stand?

Switzerland and Basel are very well positioned. With the two large pharmaceutical companies, the location has widespread visibility. Many people in the sector are familiar with Basel and Switzerland from their own experience and invariably have very positive memories. But the fact is that you cannot simply rely on the past. You also have to actively shape your future.  

And what will this entail?

The keyword is digitalisation and personalised medicine or precision medicine. The trend is that markets will ultimately split off and become smaller. So you will need more products. This is also the reason for consolidation.

Will costs go up when markets become smaller through personalisation?

On the one hand, costs for medicines are rising. On the other hand, fewer medicines have to be tested until something works if they are personalised and actually work. This reduces costs. The likelihood of success of clinical trials also increases when resources are more strongly oriented towards specific groups. We can hope that costs will even fall thanks to personalisation.

Does digitalisation also open up the field for newcomers, particularly from the IT sector?

Definitely. We are noticing this trend very strongly and are increasingly conducting assessments of health tech companies. Health tech is interesting for investors because products are brought faster onto the market and the investments are smaller. This is a challenge for pharmaceutical companies since such health tech companies will be used as the first digital sales channels.

Are we prepared for this in Switzerland?

Switzerland has strong IT companies and even stronger pharmaceutical companies. The potential exists. But you have to better connect both sides, whether in research through an appropriate institution, through events or even a new association. But I am very confident that we will set the right course here.


Biography

Patrik Frei founded Venture Valuation in 1999. The Zurich-based company specialises in conducting independent assessments of start-up companies. Patrik Frei studied business administration at the University of St.Gallen and graduated from the Federal Institute of Technology in Lausanne.

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«We benefit from many years of research in Basel»

08.07.2015

While Switzerland is innovation world champion in many rankings, promising innovations in the field of medical technology often lack the funding needed in Switzerland to get them to the market. The start-up investor MedTech Innovation Partners AG (MTIP) closes this gap.

CEO Christoph Kausch explains in the i-net interview what MTIP does differently from other investors and outlines the start-up projects that are especially interesting for his company.

MedTech Innovation Partners has recently established its presence in the market. How did this come about and why did you not take this step earlier?
Christoph Kausch*: About two-and-a-half years ago, the idea was conceived of bringing the work and research of Prof. Hans-Florian Zeilhofer together in a business model under the MTIP brand. This means that MTIP benefits from many years of research in Basel. Since then, the organization has developed and the concept refined. In short, we are strongly rooted in Basel thanks to our history and promote innovation here. Our work can help to prevent start-ups taking their good ideas abroad because they are unable to find the necessary funding and resources here.

And who are the people behind MTIP?
Apart from me, the core team includes Professor Zeilhofer, Head of the High-Tech Research Centre at the University Hospital Basel, who has been engaged in the field of medical technology throughout his career, and also the entrepreneur and investor Dr. Felix Grisard, who has been investing in medical technology for more than ten years. We have a strong team of board members and an equally top-class advisory board. Our skills range from medical technology and research expertise, through investor and entrepreneurial know-how to knowledge of how to manage innovation projects.

The MTIP board of directors is made up of highly renowned individuals. How were you able you motivate these people?
Until now there has not been a business concept anywhere in Switzerland with such strong links to research institutions. We are closing this gap in the market in order to promote innovations in Switzerland. The opportunity to play a part in this is very attractive.

MTIP promises to put the emphasis on sustainable development. What do you plan to differently from other funds?
Our integrated business model takes the long-term view; we are not in it to make a fast buck. We also make a contribution to society by reinforcing the power of innovation strength in Basel. What no other venture capital fund in this area possesses is our unique Swiss network and our excellent access to research institutions. At international level we are developing an “innovation ring”. For example, when we carry out a clinical trial for a start-up, we can do this much faster but to the same quality standard in collaboration with top-flight international partners. This shortens the time to market enormously.

What does MTIP expect in return from the companies you support?
A trusting collaboration and thus the people involved are very important to us. Intellectual property rights, such as patents or brands, must be clearly regulated before the technology can be developed further. We ourselves are a minority investor and strive for at least a 10 percent stake in a start-up. Our objective is to support the entrepreneur behind the company and to help him avoid the pitfalls that occur during the establishment of a company.

You write on the website that MTIP wants to get involved as early as possible and provide long-term support. For how long do you plan to support start-ups?
It’s somewhat easier here in Switzerland than elsewhere to get seed capital ranging from 100,000 to a million francs for the first round of financing. But what is incredibly difficult is the follow-up funding. This leads to many start-ups having to move away. So we also support the follow-up funding after the seed funding. To facilitate this, we join forces with other investors.

Medical technology is a very broad term. It encompasses everything from gauze bandages through implants and robot-assisted surgery to treatment and nursing. Where does MTIP focus its attention in this enormous range of options?
We have five focus areas: imaging, robotics/navigation, IT/big data management, medtech meets pharma and smart materials. This is where our core competencies lie, but this does not mean that we would exclude other areas. Interdisciplinarity is also very important. A model organization is the High-Tech Research Centre of Professor Zeilhofer, where different disciplines, such as IT, biology, engineering, the humanities, art and medicine, work together on finding the best solution for a medical problem. For it is not possible today to develop anything innovative in isolation.

You have experience yourself as a young entrepreneur. What are the biggest challenges for start-ups and how can MTIP help to overcome them?
In the case of start-ups in medical technology I see two big challenges. First of all, it is important to address the question of certification or regulatory approval early on. Secondly, young entrepreneurs have to take care from the outset that they already define a patent strategy when they are setting up the company. We can offer assistance here with established experts in the field.

MTIP has recently set up home in Allschwil at the Swiss Innovation Park of Northwest Switzerland. Is it your aim to collaborate with the technology and innovation ecosystem and to pool resources?
The whole Department of Biomedical Engineering and the High-Tech Research Centre of the University of Basel have just moved into the temporary premises in Allschwil. To ensure that the collaboration is efficiently organized in a spirit of partnership, we have also moved in there for the time being and are managing innovations and start-ups in this setting. Where we will be based in future has not yet been decided, but we are open to cooperation with the Swiss Innovation Park of Northwest Switzerland.

The search for venture capital in Switzerland is challenging and time-consuming, MTIP promises to make this easier. Are you overrun today by requests for funding?
The number of queries has doubled since we went public. Now we have to evaluate the best projects.

And what does a project have to offer in order to get support from MTIP?
An important point is innovation: we want to know what sets it apart from the state of the art so far. Another important question is whether it is a technology that can be protected by a patent or a trade secret and what market potential the project offers. We place great value in particular on a good management team: if competencies are lacking, we are happy to help in the search for suitable employees. Traditional venture capital companies invest their money and wait for the exit of the company.

Where do you see MTIP in five years?
The aim is to have a presence in Switzerland with a very good portfolio of start-ups. An organization like i-net can play an important role for MTIP and it would be great if the shared network idea could lead to new projects.

Interview: Fabian Käser and Nadine Nikulski, i-net

*Christoph Kausch has a sound knowledge of strategic management and experience in bringing innovations to market. Before founding MTIP, he led the global strategy department of Syngenta for several years. Prior to this, he was Managing Director at Hafiba AG, a boutique investment company, where he is still a member of the board of directors. He started his career at McKinsey & Company where he had specialized in private equity and life sciences.

Christoph Kausch studied mechanical engineering at the TU Munich and at the Massachusetts Institute of Technology Management (MIT) in Boston. He completed his PhD in innovation & technology management at the University of St. Gallen and at Harvard Business School.

About MedTech Innovation Partners AG
MedTech Innovation Partners (MTIP) headquartered in Basel, is an early-stage investor focusing on health technologies. MTIP offers more than traditional venture capital, delivering access to business building expertise, a systematic approach to intellectual property management, recruitment and a unique interdisciplinary culture for the entrepreneurs and start-ups that MTIP works with.
A local network which consists of well-known Swiss universities and research centres specializing in medtech, gives MTIP an early access to research outcomes. Furthermore, an international innovation ring offers scientists and entrepreneurs ideal conditions for bringing innovations to market.
Website of MTIP

 

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