#BIOSPAIN2023Interview | "In Spain, there is a misconception that public and private funding should be separate"

Over the past few years, we have witnessed a gradual transformation of the healthcare and biotechnology sectors. A journey that has accelerated with the healthcare crisis caused by COVID-19 and has resulted in a strong convergence between these areas and the business sector. 

The picture we see shows a series of pressing needs, such as making healthcare systems more sustainable and increasing efficiency in the discovery and development of new drugs, in a constantly changing context thanks to the potential of biotechnology. 

In this regard, the need for consulting companies in R&D&I and technology transfer in the field of biomedicine becomes the backbone when it comes to assisting in the creation and support of start-ups/spin-offs. A challenge that GENESIS Biomed, a consulting firm in the biomedical sector specialized in providing consulting services to new companies, spin-offs, entrepreneurs, and research centers, knows well and is a Silver Sponsor of BIOSPAIN 2023. We spoke with Natalia de la Figuera and Josep Lluís Falcó to learn about their experience in this field and delve into some of the trends that are central to the BIOSPAIN 2023 program. 

AseBio. Innovation and biotechnology form a strong combination that has shown great potential and transformative capacity in recent years. What is the current landscape of the biotechnology sector in Spain? 

Natalia de la Figuera and Josep Lluís Falcó. Spain is well-positioned in R&D&I in the biotechnology field. This is reflected in the significant number of publications in prestigious high-impact journals, ranking ninth globally. There is also a high interest among young people in studying disciplines related to this field, as demonstrated by the high entrance requirements for related disciplines. Therefore, there is a talent pool in this country, which is a good start. Referring to biotechnology in the healthcare sector, we also have hospitals that are pioneers in research, boosted by the fact that Spain is the third country in the world in terms of conducting clinical trials. 

If we give innovation originating from this talent both public and private tools to transfer it to our country's productive fabric, and facilitate the arrival of solutions through biotechnology to health, food, and environmental issues that affect humanity, we will also create a knowledge-based economy that will lead to an increase in GDP, job creation, and more.

One proof that we are on the right track is that, according to AseBio's report, in 2021, the number of companies in the sector increased by 11.5%. But being on the right track does not exempt us from continuing to work to strengthen the sector.

AseBio. One of your main functions is to assist new businesses, spin-offs, entrepreneurs, and research centers. How do you carry out this work?

Natalia de la Figuera and Josep Lluís Falcó. The main thing is to establish a relationship of trust with entrepreneurs. To advise them properly, we need to know the project well, its strengths, and weaknesses. Having been in their shoes before, as researchers and entrepreneurs, helps us empathize with them. With all the experience accumulated over the years, and by becoming de facto members of the entrepreneurial team, we help them establish business strategies that increase the likelihood of success in bringing their solution to market.

AseBio. GENESIS Biomed focuses on very early-stage projects in the field of biomedicine to achieve the necessary value of its research and subsequently attract the first round of investment from corporate funds or venture capital. From your experience, what is the current scenario in our country regarding entrepreneurship in the biomedicine sector?

Natalia de la Figuera and Josep Lluís Falcó. Generally, many innovation projects originate from public research. Public funding allows these projects to start maturing through grants. But there comes a point when this public funding, which is generally scarce by definition, becomes totally insufficient to continue progressing. That's when private capital needs to be introduced, but to make it feasible, the project must become a company. Usually, at this stage, the project is not mature enough for Venture Capital to find it attractive. This is where Business Angels, Family Offices, crowdfunding, or early-stage investment vehicles, like the ones managed by GENESIS Biomed, such as GENESIS Tech Transfer Boost, step in to fill that gap.

From GENESIS Biomed, we contribute to finding this financing, whether in the early stage or in subsequent investment rounds. In Spain, there are private non-banking financing options, as we mentioned, although fewer than in other countries, and they are also more focused on sectors outside of healthcare. It's necessary to convey that biotechnology is an interesting sector for investment.

Moreover, in Spain, there is a misconception that public and private funding should be separate. We have always said that public-private collaboration is essential to promote entrepreneurship. Teamwork, including both public and private administration, is what will lead to the successful completion of our projects. Public administration enables investments in research that will later lead to innovation. Without this seed sown through universities, research centers, hospitals, etc., there would be no plant later on. But it is also necessary to be aware that public administration does not have infinite resources, and this is where private collaboration comes in, which also has a more pragmatic view of the economic and business world.

Sometimes people in the public sector believe that it is not fair for research from universities or public centers to go to companies, but I don't think they realize that this is precisely what allows solutions to reach the market and not just remain in a publication. We all benefit from the knowledge economy because it creates wealth and jobs in the private sector, increasing GDP and also benefiting the public sector through taxes. In the end, it's a two-way street.

AseBio. How do you achieve the maximum value in R&D&I projects?

Natalia de la Figuera and Josep Lluís Falcó. In a way, the value of an R&D&I project depends on its maturity level. The degree of maturity is related to a higher probability of success and a reduction in risk. Therefore, a project will have more value the more mature, less risky, and more likely to succeed it is.

Although, logically, there is also an economic component that will depend on the sales forecast that the arrival of that product on the market will bring. That's why it's necessary to create a business plan to evaluate all these components in the project and understand its current situation and the areas where we can intervene to increase its value, which will always be intangible until it reaches the market.

AseBio. You also invest in early-stage projects with the mission of adding value to them and achieving significant milestones that bring innovation closer to the market and establish exit scenarios that allow for an attractive return on investment. How do you work towards this goal? 

Natalia de la Figuera and Josep Lluís Falcó. GENESIS Biomed has managed two investment vehicles: GENESIS Ventures, established in 2017 with a total of €2.5 million, and currently GENESIS Tech Transfer Boost, established in 2022 with a committed capital of €1 million over the next 4 years. Vehicles like these, as we have already mentioned, bridge the gap between public funding and Venture Capital. This stage of funding for new companies, spin-offs, and startups was underrepresented until now, and GENESIS Biomed identified this as a necessity.

The way of working in these investment vehicles, as in any private funding system, involves conducting an analysis of the project, where a large number of aspects are studied, such as market analysis, competition study, proof of concept, intellectual property, regulatory roadmap, team, business plan, or financial plan. Based on this study, you assess the project's viability, risk, and identify whether the investment you will make can contribute to advancing the project in certain aspects that increase the likelihood of success and allow you to achieve a return on investment in the future.

AseBio. What does GENESIS Biomed expect from BIOSPAIN 2023? 

Natalia de la Figuera and Josep Lluís Falcó. We expect something very simple: to continue collaborating so that our biotech ecosystem continues to grow and mature. Communication among the different stakeholders in the biotechnology sector is essential for its growth. Creating synergies among all the stakeholders involved, including investors, spin-offs, startups, consultants, etc., in addition to promoting collaboration, allows us to identify needs and act as a voice to propose ideas. Creating a sense of belonging to a leading sector that is already one of the engines of growth will contribute to its positive perception from the social and productive fabric, leading to policies that further boost the sector.