Lack of capital is adversely affecting the vitality of existing Danish biotech companies and making it hard to start up new companies. But Søren K. Carlsen, chairman of the Danish Association of Biotechnology Industries and MD of Novo A/S, the majority stakeholder of healthcare company Novo Nordisk and bioinnovations company Novozymes, is voicing cautious optimism since Novo A/S is planning to put more money into the market. The news is reported by Erhvervsbladet [the Business Paper].
Novo A/S invests up to DKK 500m (USD 93m) in venture and seed capital in biotech companies each year, making it a leading player in the industry worldwide. This year however, the holding company has allocated a further DKK 1bn (USD 190m) for investment in biotech companies that have already launched a drug on the market and have started to generate earnings.
"In Denmark we now have what is perhaps the world's strongest fund that is dedicated to biotech companies," says Carlsen.
Novo will initially invest its DKK 1bn growth equity in Scandinavia and Europe, with the US possibly following at a later stage, while the DKK 500m venture capital will be invested in Europe and the US.
Ulf Johansson, chairman of the board of Novo A/S recently explained the investment strategy: "Unlike private equity we do not exploit loan finance, but only invest our own cash resources, and the purpose is to exploit the current situation, which will probably exist in the years to come, where the valuation of listed life science and biotech companies is relatively low."