A peak into Investinor’s health investment approach
Investing in Tomorrow, Today
“We are building the businesses of tomorrow.”
Health is an important investment vertical for Investinor – we are investing broadly into health and have a portfolio of 20 companies dispersed between biotech, medtech, and digital health. There are several reasons for investing in health and two strong arguments from our perspective are;
We believe the risk-reward is attractive
The industry brings a diversification effect to our portfolio
Rewards of successful health investments
In our health portfolio allocation, we optimize for diversification between both sectors and development phases to spread risk and facilitate rotation of our investments.
The rewards of a successful health investment can be great. An example is Calliditas, a biotech company we exited in late 2020 with almost 5x return on investment. However, the risks are also substantial, with only roughly 12% of drugs going into clinical trials ever reaching the market.
The risk and reward for the various sub-sectors within health are varying. From a simplified perspective you could say that you typically find the greatest technology risk within biotech, then medtech, and lowest in digital health. The development cost, time to market, and potential reward are also typically in the same order.
What are we looking for when investing?
Health is a complex area where great domain expertise is needed to understand the technology, at least in biotech. Even though we have built extensive experience within the health sector since we started investing in health in 2011, we still utilize industrial advisors and specialized co-investors knowledge at specific considerations and verifications on new and existing investment cases.
Due to timely and capital-intensive development, we look for strong investment consortiums that have a long investment horizon and the possibility to do follow-on investments.
At Investinor our investment approach is opportunistic, with certain preferences. We look for companies aligned with global mega-trends such as; a growing elderly population, lifestyle and chronic diseases, mental health, and women’s health to mention a few. Our preference is to uncover investment opportunities at the stage when they have developed a clear value proposition, have secured the first proof of concept and have a clear plan for upcoming milestones. It is also important for our potential investments to have strong international IPR, and those with multi-product platform potential is a plus. Furthermore, we prioritize companies with a leading position within our prioritized segments.
What are the current trends?
Our prioritized segments are areas within existing global megatrends where Norway holds a strong position internationally. Some of the segments where we believe this advantage exists are; oncology, rare diseases, ultrasound, diagnostics, cardiology, telehealthcare, and health analytics. However, although we are excited by the promising future of health, we are always opportunistic and eager to capitalize on great investment opportunities, so keep our mind and eyes open to other segments as well.
Read our article on health investments for more info (in Norwegian)
Contribution by
Ann-Tove Kongsnes, Investinor
