Dr. Angelika Vlachou, investment manager of bmp Ventures about the success factors of innovative life science companies.
Health, life expectancy, and quality of life: the life sciences industry, encompassing the fields of pharmaceuticals, biotechnology, and biomedical engineering, is capable of influencing our lives in a variety of positive ways. Companies operating in the health sector make substantial contributions to the advancement of healthcare, prosperity, and economic power worldwide. The markets are formidable, the capital needs are high, and the development risks are not to be underestimated. But for investors, success offers some seriously attractive returns! We’re often asked why we choose not to invest in certain projects pitched to us that show great market potential. Generally speaking, just because an idea is innovative and addresses an international growth market with high customer value does not necessarily mean it’s going to be successful.
So what are the success factors for a business idea to work? We see the following as fundamental to success:
- Valid data sets and a proof of concept to advocate for the implementation of the plan and win over industry experts are essential.
- Solid patents to safeguard intellectual property rights, including existing third party freedom-to-operate rights with regard to development, manufacturing, and market rollout. - A solid investment case including realistic risk analysis, a good exploitation/marketing strategy, and backup scenarios.
- A diversified founding and management team with above-average professional qualifications and international experience (in the industry) including a measurable track record. All companies need personalities with strong leadership skills, vision, charisma, and the ability to get things done who are capable of communicating their vision in such a way that clients, business partners, and employees believe in it.
- A broad network of experts from the pharmaceutical, biotechnology, and biomedical engineering industries, including a regulatory environment and the direct involvement of key opinion leaders who are convinced of the project and directly engaged in development, enabling and easing access to the market.
These factors play a substantial role in winning over well-known venture capital investors and convincing them to finance the project. After all, the availability of sufficient financial resources is far from the least important factor contributing to success.