The healthcare revolution is upon us
Before realism, the Amsterdam Life Sciences Café on 21 November 2019 in Science Park’s Café Polder began with optimism.
The news around healthcare innovations has been all good in the last few months, according to Jeroen Maas from the Amsterdam Economic Board. For example, the European Medicines Agency (EMA) has just officially opened in Amsterdam… Amsterdam universities, the City of Amsterdam, the Amsterdam Economic Board and top sector companies have signed a memorandum of understanding to strengthen cooperation within the life sciences community in the fields of AI and data science… Academic hospital Amsterdam UMC released a remarkable database of intensive care patient data with a billion different data points for researchers and companies to develop AI algorithms to improve – and save – the lives of patients… And a new platform, Smart Health Amsterdam, has been launched as a rallying point for the local life sciences and health community…
In other words, a lot is happening.
Acquisition as innovation killer
All is certainly looking sunny for the Dutch-Belgian company Galapagos. This past summer, the R&D MedTech company announced its partnership with pharma giant Gilead in a research agreement. It will net the company an eye-watering 4.5 billion euros over the next 10 years. And, not only does the company maintain its independence, but it also retains marketing rights for Europe.
“Big Pharma is finally recognising that keeping R&D companies like Galapagos independent, as opposed to buying them up, keeps them innovative,” says the night’s first speaker Paul van der Horst, head of business development at Galapagos. “So, we get to continue to do what we’re good at: research and innovation.”
Many industry insiders believe that this remarkable deal will be a model for the future. And, if proven successful, the deal may also mark the beginning of big gains for the Dutch life sciences ecosystem at large.
This new partnership means Galapagos will be seeking their own new partnerships as they work to double R&D and output over the next five years – and in the process become one of the largest biotechs in Europe.
Van der Horst says his company is currently open to anyone with a bright idea – even if it’s beyond the company’s specialisation in immunology and small molecules. “We’re actually open to risk, unlike Big Pharma. That’s how we got so far. But while the industry is doing remarkably and the money is flowing, the chance at success remains incredibly slim. To bring a new medicine to market takes a lot of time, money and risk.”
Selling your soul?
Serial biotech entrepreneur Henk Viëtor, the owner of DDF Ventures and CEO of DC4U, also stresses the challenges during his presentation ‘’Finding independent funding: selling your soul to the devil?’
“Whether it’s for drugs, diagnostics or medical devices, it will usually cost about two billion euros to bring to market. It takes a lot of time before you start making money. That means you must be continually raising money – and managing expectations.”
Meanwhile, financing remains “hopelessly complex” with equity, subsidies, tax rebates, investments and loans just a few of the options. “But my favourite is partnering.”
He also notes that when developing a drug, each stage comes with a different price tag. And while you may begin with “The Three F’s” (friends, family and fools), by the time a drug comes to market any proceeds will be severely diluted through later investors and shareholders. “So, it’s important to manage expectations. Talk to everyone!”
“And don’t forget there are a lot of bigger fish out there. Don’t get eaten.”
Partnering with equals
Both Viëtor and Van der Horst stress the necessity of creating partnerships. But this process comes with its own set of challenges.
“The vast majority of our partnerships have fallen apart,” says Van der Horst. O“It’s essential that you share a company culture and that you have the same risk appetite and work speed. And for this, you need to really understand your own company culture.”
And, as Viëtor notes, this culture shifts in the years it takes to bring a medicine to market. “First you have the researchers, then the developers, which can be upsetting to the researchers, and later the commericialisers – who then traumatise the developers. Each group comes with their own experience, motivations, timelines and baggage. So, things will change. And this can cause friction. But that’s actually something I love doing: managing these transition points.”
“So, you need to monitor the cultural shifts as you undertake partnerships,” Viëtor adds.
“And don’t forget to sign for diligence!” interjects Van der Horst. “So, you can continue with all the rights and with no-strings-attached, if the partnership does fall apart.”
Risk. You got to love it.
Contribute to the next Life Sciences Café
The Café’s feature presentations and debates. A great opportunity to meet and mingle with colleagues from the life sciences sector and representatives from the broader business community in Amsterdam. If you have any feedback, ideas or extra information that may influence future editions of the Life Sciences Café, please contact Jeroen Maas.
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This contributes to the development of the Amsterdam Metropolitan Area as the European Life Sciences & Health hub