3 questions to smart minds
Photo: Marco Janezic

Financing of German biotechs

For this 3 questions to Marco Janezic

Eter­ny­gen Ltd.
Photo: Marco Janezic
18. Janu­ary 2017

The German biotech indus­try plans to hire more staff and invest in 2017. The finan­cing situa­tion has also stabi­li­zed at a high level. This is shown by the results of a joint survey by BIO Deutsch­land and |tran­skript.
Two-thirds of the compa­nies surveyed assess the current busi­ness situa­tion as good, and 54% also expect a further impro­ve­ment in 2017. Accor­ding to the report, invest­ments in German biotech compa­nies in 2016 were again at a high level of 505 million euros, even though there was a decline of 8% compared to the record year 2015 (550 million euros). 

For this 3 ques­ti­ons to CEO of Eter­ny­gen GmbH in Berlin

1. They just closed a remar­kable 8 million Euro Series A finan­cing for Eter­ny­gen. What exactly does Eter­ny­gen do?

Eter­ny­gen GmbH is a company foun­ded in 2012 to deve­lop compounds to combat meta­bo­lic dise­a­ses such as diabe­tes, obesity, non-alco­ho­lic fatty liver, etc. The novel approach is to modu­late the INDY gene expres­sed in the liver. The novel approach is the modu­la­tion of the INDY gene expres­sed in the liver which comes from longe­vity rese­arch. (INDY = I am Not Dead Yet). In fact, modu­la­tion of the gene in animal models also has strong posi­tive effects on the longe­vity of diffe­rent species.

2. What diffi­cul­ties does a biotech company like Eter­ny­gen face in Germany when it comes to fundraising?

German VC inves­tors have almost comple­tely with­drawn from early-stage finan­cing of drug deve­lo­p­ment projects and typi­cally only enter shortly before the clini­cal phases. Foreign (mainly Anglo-Saxon) early-stage inves­tors, on the other hand, invest in early stages but really only in their home markets. To break out of this dilemma, we had to forge a consor­tium of our exis­ting inves­tors, a German rese­arch company (Evotec AG) and a US/UK VC. Evotec AG is one of the world’s leading publicly traded drug disco­very compa­nies and has provi­ded deve­lo­p­ment services to Eter­ny­gen as a prefer­red part­ner in the early stages of deve­lo­p­ment. The fact that Evotec has now also joined Eter­ny­gen as an inves­tor and that the exis­ting inves­tors have reinves­ted was ulti­m­ately such a strong signal that we were also able to attract Epidarex Capi­tal from the UK as a lead investor.

3. How come more foreign inves­tors were inte­res­ted and inves­ted in Eter­ny­gen than German investors?

The willing­ness of foreign inves­tors to bear early deve­lo­p­ment risks in drug deve­lo­p­ment is more prono­un­ced in the UK and the USA. There are seve­ral reasons for this: on the one hand, inves­tors from these regi­ons see them­sel­ves more as co-entre­pre­neurs who very actively support the company with advice, support and networks, thus mini­mi­zing their own risk. On the other hand, the fund volu­mes are usually some­what larger, so that they could also finance early deve­lo­p­ment projects into the clini­cal phases from their own funds.

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