Montserrat Vendrell, partner in the Alta Life Sciences investment fund, explains how investors are experiencing the Covid-19 pandemic and highlights one of the few positives that may come out of this crisis: new opportunities in the healthcare sector.
Montserrat Vendrell is one of the most well-known voices in the BioRegion of Catalonia, where she has worked in many different capacities. She has a PhD in Biology and, after doing research at the Molecular Biology Institute of Barcelona, she worked at the Roche Institute of Molecular Biology in New Jersey, headed up the Barcelona Science Park and was CEO of Biocat for 8 years. She led the Barcelona Institute of Science and Technology (BIST) before becoming a partner in the Alta Life Sciences investment fund. In a virtual interview with Biocat, Montserrat Vendrell explained how investors are experiencing the Covid-19 pandemic and highlights one of the few positives that may come out of this crisis: new opportunities in the healthcare sector.
We haven’t had to change any of our investment plans. Right now, we’re very focused on closing the operations we already had underway, both with companies we’ve invested in previously and some new ones. For now, the problems are more due to logistics (getting signatures notarized, for example) than because investment has been curbed due to the pandemic. We have noticed a certain slowing of dealflow in the past two or three months because a lot of our networking is done in person at fairs and congresses. But we’re still working and don’t see any impact on investors joining projects: in some operations we’ve even had to turn away potential investors.
Our main advice for companies is to close the biggest rounds possible, instead of doing several small ones in a row. This way, they’ll be more liquid and can better face the operational delays that will come.
We’ve found stock market investors that, individually, are looking for healthcare funds to invest in because it is a sector with longer cycles and right now is a safer investment than the stock market. Investments always move to cover unmet needs, and Covid-19 is opening a lot of doors for business and investment opportunities in this sector. Start-ups will also get involved, both in research and in digital health, because there are several start-ups that won’t be able to continue and will have to reinvent themselves by pivoting to Covid-19.
Our day-to-day activity hasn’t been affected by the lockdown: we can do everything we used to without going into the office. Most of what we do is calls and meetings, which can be done from home. Obviously, we’ve had to cancel trips and will have to see how the congresses reinvent themselves: BIO-Europe Spring 2020 was already held online and the BIO Convention will be, too. This leads you to believe that, when you go to these fairs, you end up doing partnering that could also be done online using any videoconferencing platform. I think this will give rise to a period with a lot less traveling.
Many venture capital funds (ourselves included) don’t prioritize investment in diagnostic companies because the risk/reward ratio is less attractive than therapeutic companies. Right now, though, diagnostic research makes much more sense, especially in infectious diseases. We’re suffering now because areas like this, where there was less market interest, haven’t been a priority in recent years. An infectious healthcare crisis like this one with Covid-19 will come back periodically every 10-15-20 years (because this is what has happened throughout history) and that should make us take note and learn that we can’t stop investing in infectious diseases. We hope Covid-19 puts this priority shift on the table.
With the recession that is coming, it has to be very clear that research and healthcare can’t be cut. In terms of investment, support instruments need to be developed to allow companies to weather situations like this and keep working.