Talking Point: Investing in our health
Life Science companies in pharmaceuticals and biotechnology have traditionally enjoyed high levels of investment due to the potentially large return from a blockbuster drug or diagnostic. Medical technology companies, on the other hand, have struggled to attract venture capital investment mostly because of the confusion around device classification and routes to market.
But the tables are turning for medical technologies as clinical trials become riskier and diagnostics take longer and longer to get to market.
If we are to maximise the potential of medical technology investment, the first challenge is education: we need to get private investors better informed about the investment opportunities within medical technology companies.
We need to help them understand that unlike pharmaceuticals and biotechnology, the investment will be necessary at different stages in the product lifecycle, the timescales for return on investment are considerably shorter, and the levels of investment required are smaller.
But the returns can be significant. These nimble companies are collaborating to bring innovations to market and streamlining their sales processes to cope with the changing procurement landscape. And they are making healthcare better for all of us.
The second challenge is to make these investment opportunities easily accessible to the right types of investors. A solution would be to join up all the potential medical technology investment opportunities as they emerge, in a unified UK ‘pipeline of deals’.
These deals could then be accessed by a nationally-coordinated network of private financers which would give the necessary information to the right investor for the right deal, regardless of geography. This potential approach would also give the ‘pipeline of deals’ the critical mass required to attract private investment into the UK from European and global investment networks.
The UK also needs to concentrate on building better relationships between start-ups, SMEs and larger companies. Investing in open innovation is becoming increasingly important to large global companies, and their relationship with our creative start-ups and SMEs can be mutually-profitable as it provides the large company with cost-effective access to potential next generation technologies to exploit in the global market.
The UK has a strong reputation for generating intellectual property, especially in the field of medical technologies; we must work to create a positive investment environment to commercialise these new technologies for the benefit of the companies, the UK economy and ultimately the betterment of healthcare.
Tony Davis is chief executive officer of Medilink WM
