Escape Velocity: Conventional & Alternative Scale-up & Exit Strategies to Achieve Liquidity Faster | LSI Europe '23

Speakers

Diana Saraceni

Diana Saraceni

Co-Founder & General Partner, Panakes Partners
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Alexander Schmitz

Alexander Schmitz

Partner, Endeavour Vision
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Clara Campas

Clara Campas

Managing Partner, Asabys Partners
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Enric Claverol

Enric Claverol

Head of Medical Technologies Programme, European Innovation Council
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In this session, seasoned life science investors explore alternative strategies for navigating market challenges, focusing on exit and scaling approaches.

 

Transcription 

Diana Saraceni  0:05  
Hi, everyone, nice meeting you. I'm going to stay here, right? Yeah. And, and thanks for the panelists too, for for being here and sharing your thoughts with us. Just as a quick introduction to the panel here, in front of you, there are investors and people expose everyday to innovation. And you can count among us, I think over 5060, probably 70 years of venture capital investment experience and an exposure to over 100 company probably more altogether. So a hell of a lot of experience and lots of round going through a lot of rounds of financing, as well as exit. And thank you to LSI and the organization for inviting us on that topic, which in a timeframe like this one couldn't be more challenging than discussing exits. And alternative exit especially, I mean, trying to solve the big question we have today in the industry, which is how we go over a time where liquid liquidity is certainly scars and exit opportunities aren't many. So we're gonna start with a quick round of introduction. I'm gonna start from the bottom there, Enric, if you want to just one minute about yourself and about EIC that will be great,

Enric Claverol  1:22  
unrecoverable I'm responsible for the medical technologists portfolio the ESC as you might know, the ACS, the new vehicle, a relatively new vehicle created by the European Commission's it's fully public. It was set up in 2021. And the goal is to support startups across multiple areas, not just med tech med tech is about 30% of our portfolio. It's a relatively large vehicle, we invest 1.1 billion a year, not of course, exits is will be critical for us. Our focus is now moving from the operational aspect of running all the evaluation of opportunities to finding paths for exit. So it's a very important subject for us. Thank

Diana Saraceni  2:02  
you, Enric. Clara,

Clara Campas  2:04  
so Clara compass, co founder and managing partner at a service. We are a venture capital firm here in Barcelona and now fundraising and launching already investing from our second fund. We invest across the board in health innovation, so from biotech biopharma to med tech and digital. So happy to be here. Thank you. Liana.

Alexander Schmitz  2:23  
Thank you for Alex, Alex Schmitz and a partner at Endeavor vision. We're a transatlantic healthcare investor focused primarily on medical device and digital health companies. We have about a billion dollars under management, currently investing out of VMG to expect to be investing out of EMG. Three shortly. And we're focused mostly on growth stage companies. So generally post approval early commercialization up to large scale, pre IPO growth equity rounds.

Diana Saraceni  2:55  
Okay, thank you, Alex, and about myself, our co founder panel, I guess, we Tanaka's. We invest out of two funds. The second one recently raised 180 million. We invest on stage, primarily across Europe, and primarily in medical device, but also in biotech, digital health and diagnostic. So thank you guys for being here. Exciting. Till yesterday, probably we had a little bit of a different view. What are we going to talk about? If the IPO market is completely closed? We haven't heard any medtech early stage companies going public for a long time. m&a is closed, is it closed? Alex completely? Or maybe something you want to talk to talk about a big announcement yesterday? Yeah. So,

Alexander Schmitz  3:39  
you know, obviously, many of you may have seen yesterday's announcement that Boston Scientific has entered into a definitive agreement to acquire one of our portfolio companies, really even med systems for 850 million upfront with some significant commercial revenue base milestones for the next three years. So we're obviously very excited for the company, the team, for the investors and for Boston Scientific, which we think is going to do an amazing job helping to bring this important therapy to the many millions of patients that suffer from fatigue or genic, lower back pain for the broader med tech ecosystem. It's obviously great to see significant m&a activity we have seen even though I know and we'll talk more about it. It's been a challenging period, certainly from from an IPO perspective where we've had you know, essentially a two year drought following a wave of IPOs in 2021 m&a volume, both in terms of dollars and deals has actually been slightly ahead of 2022. Although down significantly from previous years. The the encouraging news, I guess, is that that of the top nine large cap med tech companies, they have about $117 billion of firepower available for m&a transactions based on their current balance sheet, and leverage ratios and Though there's ample capability to engage in m&a, and we'll talk I think a little bit more about what what they may be looking for and, and how those of you that are investing in or running device startups can best position yourselves to attract some of those dollars, but the m&a money's there and, and the the strategics are looking to deploy it. And I think it's our challenge to create opportunities that are enticing and attractive to get them to do that.

Diana Saraceni  5:26  
Well, fantastic. Can you elaborate just a bit on the stage of the company was then because that's probably great input for for the audience here. Yeah,

Alexander Schmitz  5:34  
happy to and maybe just step back. I mean, generally, when you look at med tech m&a Over the last four or five years, and I'd probably say, you know, even longer than that, but the data that that I've seen recently, from from Guggenheim went back to 2019. There's sort of two types of m&a transactions, there's pre approval, those tend to be data driven, they tend to cluster in cardiology, electrophysiology, Structural Heart data driven specialties, where a positive readout on a pivotal study in the US can be a catalyst for m&a. That's probably about 10 15% of m&a, the vast majority of medtech m&a occurs at the commercial stage, at or above 10 million in in revenue. And so I think, when you're looking at m&a opportunities, and how to drive toward them, you need a clear commercial strategy to get to some level of scaled revenue, where you've, you've demonstrated that you've got a product that has market fit a commercial model that is working in that in the hands of a larger acquirer, or could be something that can scale up, I think, in the current, you know, high interest rate environment, the pressure on strategics visa vie, you know, earnings per share and cost of capital, probably raises the bar. And so you should be thinking about ways to get to not just the minimum, which is probably 10 million. But beyond that to 20 30 million in the case of relieving the company was on a pretty nice trajectory from sort of low single digit million doubling more or less every year. And this year, it's expecting to finish north of 70 off of a $38 million number last year, with, you know, Boston publicly guiding toward 50% growth next year, which would obviously take them up into the kind of 120 100 $30 million range. So I think there is definitely a premium for scaled assets that can plug into the commercial infrastructure and actually move the needle at the at the group level, or, you know, at the other end of the spectrum, strategic assets that fill an important hole in the portfolio of large franchises like up structural heart, etc. Right,

Diana Saraceni  7:50  
thanks for sharing. And I mean, we should really celebrate the the exit, because I mean, that's probably it demonstrates the sector is still alive. And I mean, the there's a lot of interest, even though in this timeframe, we don't see a lot of those transaction. But great, let's hope it

Alexander Schmitz  8:13  
there's more than a few you know, saris and the neurovascular space earlier this year and pilot in the urology space that reflects acquired for 600 plus 50. In commercial earnouts. I mean, those are substantial transaction. So there's, there's reason for hope and optimism, although they you know, there's a high bar, I think in terms of scaling the business and having something that can be plugged into an existing, you know, Salesforce,

Diana Saraceni  8:42  
right. Thank you so much. And then when you think of alternatives, I mean, we probably all of us have in mind that there could be this industry could somehow somehow consolidate, it's probably a nice way of producing larger player and making them more attractive even for buyer or eventually for the IPO. When it's going to come back at some point the reopen the IPO window. Do you guys see I mean, Rick, you have exposure to many, many companies through the various it's an it's a certain number we heard and these see a lot of how do you see a lot of that is happening, a lot of company talking to organize consolidation or investors that are behind the scenes doing. The

Enric Claverol  9:32  
ACA is a very special vehicle in many, many ways. First, the size is crazy. Sometimes it's difficult to manage, and do things if we go in really early stage, which doesn't help in seeing the path to exit sometimes. But we do realize that it really really important to see that path. First we have problems sometimes we are locked up with this CO investment situation because we come in we commit six, 7 million and then the companies can not find co investors and partners we because there is no liquidity in the market. And we perceive as a major issue. So we try to come in, we want to create this cascading effect this domino effect. And we don't see it because there's no liquidity, so nobody wants to join us. So so we try to see paths to go to visualize the exit, and we're trying to think the legislator is close to us. We were not really legislating ourselves, but we are close. So we're trying to be creative about this. And some ideas that I'm happy to share and see see what you think about this. So for example, the new crowdfunding legal framework, for example, allows for a secondary market in in crowdfunding. So it's amazing when you look at markets like NFT, or crypto, for example, there was so much liquidity and the asset itself was not really that solid. And still, we see our companies or lots of scientists coming in through our pipeline, really building step wise value into their companies, there is no liquidity count, this isn't fair. And there's something crazy about the market. So one of the things we tried to do is be creative Come on, if we are adding value to those companies, they are adding value, and we don't we read them, we have to find ways to create liquidity, and maybe a secondary market early on could help. So this is one of the things I wanted to throw into the discussion. Would this make sense to create a secondary market before an IPO or an m&a is possible? It's just one of the thoughts are many thoughts, running our heads? Is one idea?

Diana Saraceni  11:27  
Well, I invite any interest interested investors to talk to Eric. And Clara, I think we should really leverage your experiences on the biotech side, which could be inspirational for med tech and the sector because I mean, it's in biotech, there are a number of m&a opportunities that come much earlier than a metric and how does this is this applicable to metric or to some segment, if at all? I mean, or what kind of alternatives are there for to raise money that in biotech that could find a spot in med tech as well, I

Clara Campas  12:07  
think that in biotech, you sometimes have in mind the what we call the risk of, of refinancing. I mean, you have that in mind all the time. I think in med tech, it's obvious, right? So I think in med tech, going back to the two scenarios Alexander was making so you can sell the company or exit before getting into market or after. But I think that you always need to have in mind in medtech, that you might need to go to the market, to go through all the regulatory process to build somehow your commercial strategy, not your commercial team needed. But you need to know how to reach the different markets in a good way. It's not just that I have regulatory approval. Now this I'm here waiting for someone to jump in, which has been a little bit the trend for, for some strategies. So I think that always even from the very beginning, you need to have this in mind from the manufacturing perspective, from the commercial perspective, from every perspective and from the from the funding and financial perspective. I think that's very different from what we see in biotech, particularly at this stage. Sometimes when you invest in biotech, I don't know at the very end of phase two or starting phase three, you might face that risk is something you you might consider on the table, but I think that formatic is a must you need to be ready to face those steps on your own and and it will have to do also with the secondary I mean, probably not the secondary as as Enric was referring to but one of the on top of IPO, m&a or consolidation with probably we will touch base a question mark is whether the private equity will at certain point jump in, in in companies as mature as the one and Xander were referring to with consolidated revenues growing revenues as an alternative perhaps to the IPO, right partial or, or complete? Secondary or sales to private equity, which are more and more ready to understand the business I believe unless generalistic in the way so perhaps that's something we can look to explore.

Diana Saraceni  14:17  
Yeah, I mean, crossover funds, for example, which are exist a lot and are very active in biotech. I haven't seen almost absolutely active being active in med tech. Why not? It should it should be a similar should be similar. No.

Alexander Schmitz  14:32  
But I think that goes back to the sort of dearth of IPOs in the last couple of years and 2020 21 period, there was a lot more activity from crossovers into later stage med tech deals that we're anticipating going public. You know, the cohort of med tech companies that went public in 2021 has not performed well. Partly because of the just the overall market environment and rising interest rates that put pressure on the stock prices, partly because some of them didn't perform well in their in their early period as public companies. But I think that's put pressure on the crossovers. But we've, we've continued to see activity. I mean ally Bridge, which is late growth, crossover funds, you know, invested in, in relieving earlier this year. Because we were expecting to build the company out and potentially take it public. Next year, when the proverbial window reopened, obviously, things took a different path. But there's there's activity, but I think less than what you typically see on the biotech side, although I think that goes hand in hand with the relatively lower volume of med tech IPOs versus biotech IPOs. Because ultimately, the crossover funds are playing that arbitrage into the the IPO. Whereas the vast majority of med tech companies if they exit exit via trade sale.

Diana Saraceni  15:56  
Okay, well, let's pick up another one. Another topic that there were a couple of companies just recently in the last two months going public through this pack model. And they were both in med tech and namely sinewave and Alerion. into their revenues in the revenue stage. And raising it's a nice way of raise money and go public the same time with a with a transaction. Do you like Do you feel that you can either model Oh,

Enric Claverol  16:31  
yeah, the THC, we have a very conventional, we just starting. And this sounds a bit far fetched for us in our approach. So we tried to get the companies to generate revenue as soon as possible get the CE marking as soon as possible is not easy within the era now and build a solid, credible business. Maybe this Pac Man is a bit for us. It's a bit too far.

Diana Saraceni  16:54  
But Enric, if a company, I mean, in the future IPO window allowing would come to you and say we're matching DSC money with the IPO? Is that feasible? Or with

Enric Claverol  17:06  
an IPO? Yeah, we will be the first time that happens. But

Diana Saraceni  17:10  
yeah, okay, just speculating, sorry. But going back to the stack, did you consider any of that Alex for leaving our other company's material.

Alexander Schmitz  17:18  
So we, I mean, we walked this back phenomenon closely both as a way to potentially fundraise for a portfolio companies and at one point in time as a potential vehicle to raise money to invest out of, you know, as a sponsor, when Spax were sort of on the rise and Spax, as a vehicle have been around for decades, they just they kind of had a resurgence in the last, you know, cycle. But my personal view, is that there's a limited number of circumstances where, you know, public offering vs back makes, makes a lot of sense versus a traditional way IPO. One scenario where it could make sense as if you've got two private companies that you think could merge, and then you do, SPAC can be a way to arbitrate the valuation disconnect, because getting a bunch of VCs together to decide on the relative values of two of their portfolio companies is an impossible task, because everybody thinks they've got the prettiest baby. But, you know, if you've got a neutral third party that's providing the capital that can set a valuation, we didn't see that in the last cycle. But that's a an application for us back I think, you know, for the most part, a lot of companies that went public via spec did so because they weren't, they concluded that a traditional way IPO wouldn't work. I think some of them, people got excited by the sponsor, promote, and the economics there, which if you pulled it off successfully, could be pretty attractive for the sponsor. I think that's pretty much pulled back. And certainly in our portfolio, we're not really considering SPAC as a, as a as a path to a public offering. Our view is if you're gonna go public, you to really exit and monetize your investment as a as a venture sponsor, you have to attract high quality institutional long only funds that are going to be shareholders in the public company, and create liquidity and trading volume to allow you to sell down your position. If you don't have that. And your public, then your public but you're stuck. And, you know, some companies that went out in 2021 that has traded down 7080 90% Or more off of their IPO price or are sort of in the doldrums they they're public, but they don't have an institutional shareholder base that creates liquidity. And so investors are stuck. And I think for us, you know, the goal of an IPO is to raise enough capital to accelerate growth and also to provide liquidity for the private venture investors that got the company to that stage and Spax don't seem to me it'd be the best way to do that. But every company is different. And I'm sure there will be successful examples of, of people going out via spec IPO.

Diana Saraceni  20:07  
Planner, any different opinion on that? No, I

Clara Campas  20:09  
do. And and I fully agree, I think that on one side is good to see that the sparks are finally happening up to the end to let's say, not not only raising but also executing the mandate. I do agree, it's a nice way to, to, to help or to bake lies that consolidation we were speaking about, and to make more robust companies to then be able to face the public market and under way of moving forward. And if they are professionalized enough, I think that will be a good thing. So everything that creates optionality is good. But of course, when making a decision, or when a company needs to make a decision on whether this is a solution for them or not, you need to consider the the impact on the value it might have compared to the time you gain in going public. So I think it's about the momentum of case by case. Thank

Diana Saraceni  21:05  
you, there's just

Enric Claverol  21:06  
something as pack. So I don't think the EAC will ever be close to you to the idea of spec. But building credibility is something that really worries us. And maybe the mechanism has been a bit too aggressive in a way so but if it works, but it has to be something that builds credibility for us because the SEC just nailed but if you're not close to spec at all,

Diana Saraceni  21:26  
okay, well, then let's take it I mean, we are in a difficult time for exit. So company can scale up in use this time to scale up and become more mature and potentially prepared for an exit later on assuming that the best way and the best recommendation for the time being, they have to raise capital to do that. And the panel, the title of the panel is also about alternative way to scale up. Assuming that a given that then the number of investment has the investment space, pace has slowed down as well. There are less number of deals, there may be bigger in size in in medtech, in particular, but less less of them. And there's some players that who that completely disappeared like we that we had in the past some Chinese investor med tech companies or funds, investing in equity and taking position on joint ventures eventually that are not really active anymore, at least for the equity part. And they're the strategics there's a number of them that are slowing down the pace as well into investing. In early stage companies are going towards more mature company taking care of more into and taking care more of profitability of the company of their own companies, rather than making new investment in new technology, some of them. So what's the recommendation, alternative way of scaling up when usual players are sort of withdrawing a bit from the market, what's the recommend one additional

Enric Claverol  23:09  
thought maybe a bit unusual again. So when we talk to try to create paths for our companies, we talk to whoever next to NASDAQ Nordic, and for Sweden, for example, is really, really interesting how the government has created this. Some years ago, this investment accounts where they have these particular tax break, makes everything very easy for the retail investors to come into this type of companies. So I think that's another possibility to create new ideas because the ASC we're thinking about new ways of doing things, maybe at the European level, we can create some kind of mechanism that facilitates for retail investors to go into these companies really early on. And then of course, the IPO path should be open, but then they should be which we should facilitate from the legal end. And the tax framework that retail investors can go and I think any of these we can create, to generate more movement early on, because we do see a lot this situation with our companies are really early stage. Some of them are not even first inhuman yet. And we see even a strategic say, look, it's too early. We have a long list of companies at that early stage to find ways to help them.

Alexander Schmitz  24:23  
Okay, with that said, I mean, there many strategic, you know, investors represented here at LSI from both the formal venture arms or from the business units or corporate development units, and I mean, I think they remain very active investing in in early stage companies. They don't always disclose that they're investing. So sometimes I think you get the impression that they're sitting on the sidelines, but I think that you know, the strategics have remained active and if anything, you know, they've filled Part of the gap at least is created by an absence of traditional venture funding going into early and mid stage companies that I was talking with somebody earlier who raised the seed round from from two unnamed strategic investors. And, you know, I think, but I think they're, you know, back to the sort of bifurcation between early data driven exits and later commercial driven exits, you're, you're, you're unlikely to attract strategic investment at the sort of seed or a stage, if you're in a category that that isn't likely to drive in, you know, a data driven exit. So there is a little bit of a, a bifurcation. And if you're in that sort of second category, which is probably 80% of med tech, you know, my advice would be, and I've seen this more, it's evolved over the last couple of years, but working backwards from the end state, okay, if I need to have a certain level of revenue to get acquired, what do I need in order to get there? And so yeah, you need a product and you need, presumably clinical data, you need a regulatory clearance, but you need, I think, a path to the US and a clear strategy around getting reimbursement, coding coverage and payment and starting there sometimes and then working backwards from what are you going to need to do over the lifetime of the company to get to the point where you've got those sort of the famous three pillars of reimbursement, without which you're probably not going to get to 50 million in revenue and drive an outsize exit, right. So you want to be thinking about that early on embedding health economic outcome data into your pivotal study, where possible, not always possible, working with FDA and CMS on sort of dual track valuations, to try to accelerate the time between regulatory approval clearance authorization, whatever your pathway is, and, you know, coverage from CMS and coverage from commercial payers that, that that's really important. I mean, one of our other portfolio companies in the women's health space is only expecting their category one code to kick in January of next year, but they've already lined up 270 million covered lives in the US. And I think 19 of the top 20 commercial payers, because they had such strong health economic data that even without a category one code, insurance companies were lining up to pay for the procedure, we hope that category one will sort of unlock that. But if you, if you get to the end of it, and you got category one, but you don't have good, you know, he or he can data, you're still going to have a struggle with the payers. And that's going to be the rate limiter on how fast you can scale revenue, and therefore, how quickly you get acquired. So I think, in the past, we used to think about these things in serial. And unfortunately, now you I think you have to do them at least partially in parallel, so that you can press the time and therefore the cash, you need to get to scaled revenue that's going to drive an exit

Enric Claverol  28:09  
with a paradox that we have this market of 400 million population. And most of our companies come to us saying, no, no, I want to go to the US first. Because that gives credibility to my exit is amazing. We have to change that we have a huge market. Okay, it's fraction. It's, it's a puzzle, but we need to solve this with where we support these companies with public money since taxpayers money, and they want to go to the US to go into their exit,

Diana Saraceni  28:37  
reinforcement and all of that, and especially with the new MDR, I mean, that major impact, and that's where the

Alexander Schmitz  28:45  
disconnect for me is, on the one hand, you've got the commission, saying we want to invest Yes, a lot of money in fostering innovation and creating an ecosystem. And on the other hand, you have different parts of the European government saying we want to make it much harder to bring it. Absolutely. And then you've got the national level reimbursement. And it's been a it's been a challenge. I think MDR is, as you point out, has made it before

Diana Saraceni  29:09  
before before the new MDR it was more balanced and were companies that us for marketing reasons. And so now

Enric Claverol  29:25  
this is really interesting with the legislator originally had a very good idea. We want to make medical devices regulation safer, because of the breast implant issues. And it's totally clear, and then it's propagated down to the execution body, and it's becomes confusing to legal. And how do we solve that? We're working on it. We're not there yet. I certainly try but I haven't managed so.

Clara Campas  29:48  
It was a strange I mean, before in the ER you were speaking with European companies saying well, we will go to Europe first because we are here we understand, but our huge market is in the US Why don't you start with that? I mean, globally, at least now. Now, now we change. So it's like we went the other way around. And I fully agree with Alexandra. I think that consolidation is something should be happening also at different levels. No, not.

Enric Claverol  30:13  
I wish it was in my hand. Yeah, I think we were discussing Western companies who used to is pre commercial procurement. So this is funny, and maybe some of these companies here. So we have public hospitals, using taxpayers money to choose technology, and they go everywhere, but in our own portfolio of all these things we need to solve this problem.

Alexander Schmitz  30:35  
Maybe on a positive note, though, I mean, a decade ago, it was the exact opposite. And there was a concerted effort between the government, FDA, CMS Congress, and the med tech industry. And I met Josh Mac our who gave the keynote talk last night or fireside chat, you know, authored or co authored a paper about the need to make the us more competitive. And that led to over time a series of changes that have made the us more competitive. And then at the same time MDR came out and swung the pendulum the other way. But But I think it's it's possible, it's more, it's more complicated, because there's, it's just a more complex system. And there's a lot more stakeholders, but I do think it's important that as a, as an industry, as a community, we continue to press on that because up to your point, I mean, the innovation is here, the capital is here, the end user patient market is here, European physicians are, in many ways, much more open to innovation and adopting new therapies. I mean, if you look at interventional cardiology, where I started med tech, the there was like a seven, eight year lag maybe longer between the adoption of trends, radial. So through the wrist, PCI access, which has a much lower complication and infection rate than transfemoral. And that was because they were like, this is better, let's let's do it. But yet the regulatory framework is, is a real obstacle. And I think we got to sort of figure out how we can improve that. But we need to push all of us.

Diana Saraceni  32:13  
So just to maybe close on a note about traditional VC, I mean, that's what has to sort of support companies scale up and eventually keep prolonging the holding time waiting for the exit. how active you are you guys, and what do you like to see in this time in this context, whatever, whatever your preference may be Clara? You mean? You mean in terms of in terms of what do you like to invest in, given the current given the current situation

Clara Campas  32:50  
when and I'm just speaking, generally, not only med tech, I think that when when we started in summer 2018. So five years ago, we started as, as a fund trying to invest across the board, really across the board, not saying we do med tech and do just one company. So really doing med tech and really doing health tech in general plus biotech biopharma. Our hypothesis then was that the market will consolidate substantially. And thanks, God, it has happened really, right. So we do see not only pharma companies acquiring or being interested in digital, but we also see a lot of med tech, which is not hardware only, which has lots of data. So this convergence, but even drug discovery is is being involved now with a huge amount of computational data. So having a team that is able to understand this complexity, or not only the team because we don't know about everything, as none of us do, but but just trying to make sure that we understand and we are able to, to make to take advantage of all those consolidated convergence of the market and these industry, put us in a very nice position and created a lot of synergies regarding Tallinn, regarding how we just become I mean, try to advise our companies on the regulatory path, for example, coming from the biotech understanding what I mean, when you come from pharma, you know, all these new regulations say okay, of course, that we have to do, right, so. So even in the digital field, which was not as typical to see these regulations some some years ago. So I think that we like to see companies that are not only in one or the other science needs to make sense. It needs to be disruptive enough to make sense economically, when the products reach the market. I think that having the product in the market in mind is a must. And we like investing in companies that really are able to play a little bit with all these technologies and understanding them. I think that we do see a nice a nice fit with us in those ones.

Diana Saraceni  34:54  
Thank you. And Enric, I mean, yours is much more of an institutional role, but Maybe you can tell us what the EIC is, in general more interested in definitely filling a gap that there is of into early stage companies equity and by through equity and grants, but any sub sector in particular, or any technology in particular, so

Enric Claverol  35:15  
we have like two different strategies. One is the open calls for those, you can zoom in any topic and these pretty open. And then we do have some areas that we identify as with, you know, highest potential. And these are challenges that we launch from time to time. And one of those areas is cell reprogramming and tissue engineering. We've been looking at this for quite a long time, we think there is an opportunity there. Maybe the The timeframe is well suited for us because we can, we might wait a bit more, it will take longer to get those hybrid medtech biotech tissue engineering into the market. But we're looking into that a lot. Some of the things that are closer to traditional metric, I saw this acquisition, Bigfoot, I think this past few days as a very interesting approach I've seen before but you have these add ons to maybe legacy systems and you turn them into so telehealth telehealth compatible, and sees a very smart approach is economically viable is shorter term. So we're looking at this to sort of timeframes a long timeframe where cell programming tissue engineering, grafting whole organs is one thing we're looking at at funding. But also the shorter term this, for example, add ons to legacy devices to turn them into sort of more modern digital based things.

Diana Saraceni  36:32  
Thank you. And, Alex, are you more into still traditional methods? Are you opening up to data? And also Yeah,

Alexander Schmitz  36:40  
we I mean, we've we've evolved, our strategy is some of these new technologies have emerged. And we remain focused on growth stage investing, that that's consistent, but we've explicitly added digital health to our fund mandate, we've hired Senior Investment director out on the West Coast, who is focused exclusively on digital health in the US, I work with him and the rest of the team here in Europe on sort of transAtlantic and European digital health opportunities. So I'd say our current portfolio and our deployment strategy, going forward is roughly a third, traditional med tech, a third digital health as a baseline. And then the balance will be just the best deals that we find a person is opportunistic, so it could end up being 7030, medtech, digital health, it probably won't skew the other way. But I mean, I think med tech will remain roughly half the portfolio over time, just given the tremendous opportunity in med tech.

Diana Saraceni  37:43  
And when it's digital, it's pure digital, or it's a combination when they're both.

Alexander Schmitz  37:47  
I mean, we've done pure digital kind of software selling into insurance companies and small businesses in the US for managing insurance benefits. So really a software as a service, kind of almost a business optimization play so really far away from interventional cardiology products. And then we've looked at, you know, what I would consider more our sweet spot of kind of tech enabled medical device advanced imaging, connected devices for monitoring or managing chronic diseases. And then sort of image guided therapy, whether it's standalone or sort of integrated into the therapy, as you know, is the case with something like Sonata where you've got a traditional RF ablation catheter, but it's it's merged with the ultrasound guidance system in a in an imaging console to help guide the therapy, you know, during the procedure. So it covers the full range, but we think digital is real and it's very much part of our

Diana Saraceni  38:45  
situation for the pure digital is similar into IPO IPO of your why is our

Alexander Schmitz  38:52  
No, I think to Clara's point, I think for pure digital I think there's there's a lot more opportunity to exit to private equity because those are businesses that have much lower capital needs and can generate nice high margin recurring revenue and cash flow and I think private equity buyers you know, they want cash flow that's what they buy. That's what they pay for. And they don't have a commercial infrastructure that like the strategic does that they can drop it into and and then leverage so it I think we we expect to see more private equity exits for the pure digital than for traditional med tech.

Diana Saraceni  39:30  
Okay, well, I'm thankful done. Can I close it here and thank you so much for coming here and sharing your thoughts. Thanks. Thank you for attending. Thank you.

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