The healthcare industry has changed dramatically in recent years and the pace of change is set to accelerate, driven by the combined pressures of break-through scientific innovation, the unsustainable economics of existing healthcare systems, and demands from better-informed patients.
The UK has historically punched above its weight when it comes to innovation in the sector, and will continue to have a critical, global impact driven by aggressive private, public and charitable investment into research across the UK’s leading universities, research institutes, and industrial R&D facilities.
Obtaining the right amount of capital, at the right time, from the right sources can be frustratingly difficult and fundraising is not every entrepreneur’s favourite part of the business building process
At BGF, I have the privilege of meeting ambitious companies in the healthcare and life sciences sectors every day; and our team has invested in 23 healthcare businesses since we were set up in 2011 with more than £150m ploughed into the sector.
It is a critical investment opportunity for us and over the past year we have expanded our commitment to the sector.
Dialling up diagnostics
An internal review of the broader life sciences and healthcare sector in 2018 identified the diagnostics segment of the market as a key area of near-term focus for BGF.
And we are seeing significant opportunities linked to earlier and more-accurate identification of issues, the ability to stratify patients to enable more-personalised treatments, and the scope for active monitoring of a growing range of biomarkers.
Diagnostic breakthroughs will enable new therapies and open up new treatment pathways that will have a fundamental impact on the lives of millions of patients around the world.
This focus has led us to invest in five exciting diagnostics-related companies in the past 12 months alone; most recently Cambridge-based PredictImmune, a developer of pioneering prognostic tools.
We love companies with big, hairy, audacious goals, but we really love the companies that have done the hard work to build a playbook for how those goals are going to be achieved
Based on more than 10 years of research by globally-respected academic founders, and being commercialised by a very-experienced executive team, PredictImmune provides a test that helps clinicians and patients to understand the likely course of disease to enable more-customised treatment.
Our analysis of the wider life sciences and healthcare markets indicated a funding gap in the diagnostics segment with significant, active support at early stages from angel investors and established seed stage investors, but with variable levels of support for the companies that are at the point of market entry or at the point of scaling up.
We also see signs of funding gaps in other segments of the market, particularly in MedTech and in what we refer to as ‘pharma enablement’ – the tools, technologies and services that are fundamental to the identification, development, manufacture, and delivery of therapeutics.
Supporting growing healthcare businesses
Securing the right financial support is a major challenge for any business and, even though the amount of capital deployed in support of the life sciences and healthcare opportunities from government, charities and private sources is significant; companies in this sector are not immune to the challenges.
Despite wider political uncertainties, innovation is moving apace, and the UK continues to attract the brightest minds from around the world to work alongside home-grown talent to change the world for the better
Obtaining the right amount of capital, at the right time, from the right sources can be frustratingly difficult and fundraising is not every entrepreneur’s favourite part of the business building process.
Every institution will be different in focus and approach, with some geared up to support early-stage, proof-of-concept work, while others focus on fuelling the expansion of proven propositions.
It is important to understand the current context and focus of the investors you engage with.
At BGF, I’m fortunate to have access to substantial amounts of capital to deploy, and we are keen to make investments – on average we do one deal each week.
Every company I meet is interesting on some level, but like most investors, my mandate and the nature of how our fund operates means I’m only able to really engage with a subset of those.
Beyond the usual tropes about looking for a great team, great technology, big market, and sustainable differentiation; we look for businesses with some degree of validation, a clear vision for how their proposition plays into the market, and an articulation of how the business will scale. <’p>
We love companies with big, hairy, audacious goals, but we really love the companies that have done the hard work to build a playbook for how those goals are going to be achieved.
Obtaining the right amount of capital, at the right time, from the right sources can be frustratingly difficult and fundraising is not every entrepreneur’s favourite part of the business building process
Despite wider political uncertainties, innovation is moving apace, and the UK continues to attract the brightest minds from around the world to work alongside home-grown talent to change the world for the better.
Over the next decade we will see revolutionary, disruptive change in the life sciences and healthcare sector, and we are excited to be a part of it.
