Why invest in Norway?

Norway

Jan 2

Illustration Oslo Science City, Cover Images / Zuma Press

Investing in Norwegian healthcare is investing in the future.

Norway sits comfortably in 6th place out of the wealthiest countries globally and is on par with the United States of America, according to OECDs latest data. Norway and the rest of the Scandinavian region represents a stable political environment where, regardless of what party is in charge, all share common goals of educating the citizens, promoting key industries, and investing in the future. Norway ranks within the top ten countries in the world in terms of ease of doing business and has fluctuated between a 6th and a 9th place since 2010, making Norway an interesting country for both national as well as foreign investors.

What is lacking?

Norway is dealing with a funding gap issue, due to the relatively low number of professional angel, seed and VC investors, combined with a structural reluctance from family offices, pension funds and incumbent corporates alike to contribute risk capital. According to Forbes, Norway lacks a specialized approach to venture investing and only has a limited number of investors offering a value-added model with a global outlook.

A unique opportunity

However, this is rapidly changing for the better which presents a unique opportunity for investors to get involved in a potential rapid growth scenario. There is no doubt that the wealth and highly skilled workforce is available. The more skilled and senior the employee is, the better Norwegian talent compares on a global pay scale (read relatively low salaries in general). With a growing interest from private investors and the government (through Innovation Norway and others), the window to get a head start in the Norwegian startup investing scene is closing and investors should act sooner than later to take advantage.

A continued increase in IPO numbers

If we turn our attention to the IPO space however, Norwegian companies have been on an IPO frenzy in the past two years (2020-2021). According to Pitchbook the IPOs in 2020 reached a record high of 41, worth a phenomenal $2.07 billion, only to be outdone by 2021 with a staggering 45 deal count and $3.39 billion raised. Prior to 2020, the annual IPO numbers were hovering at around ten annually, so this is clearly a major step up.

The impressive IPO numbers compare well against Norway’s neighboring countries, being significantly better than Denmark (16 and 20 IPOs in 2020 and 2021) and on par with Sweden, at least in 2020 (41 and 81 IPOs in 2020 and 2021).

Some examples of successful Norwegian Life Science IPOs from 2020 and 2021 include: NyKode (Former Vaccibody) (VACC), Lytix Biopharma (LYTIX), Exact Therapeutics (EXTX), Aker BioMarine Antarctic (AKBM) and CSAM Health (CSAM).

It is promising to see that level of exits from IPOs alone, and if we add M&A to the equation the numbers look even better. This heightened investment activity should give both national and foreign investors confidence in the Norwegian market for startups and growth companies alike.

Publicly funded high quality healthcare

Looking at the healthcare system, Norway has successfully implemented a universal access model where the government manages healthcare budgets and acts as a single payer. This in turn creates trust from citizens and patients to participate in clinical trials as well as sharing of personal healthcare data. This is a valuable asset for companies in the region and is something that increases Norway’s uniqueness in a global setting.

The whole Norwegian population of close to five million people benefits from publicly funded high quality healthcare. There are few obstacles to accessing medical information from various health registries for research purposes, and Norwegians exhibit a high level of trust and confidence in data management of research institutions and companies. This ensures a vast, but safe, data platform for medical enterprises for the foreseeable future. Moreover, the Norwegian health authorities have made extensive investment in large population-based surveys, creating an outstanding resource of medical samples and lifestyle data. All this valuable information is crucial to stimulate innovation, validation and speed to market for emerging health focused companies.

Norway – A healthcare pioneer

Norway is especially known for groundbreaking research within the oncology field, and the clinical trial unit at the Radium hospital and Haukeland University Hospital have extensive experience with conducting advanced clinical trials. Norway is also home to an experienced network specializing in pediatric clinical trials. Research at the Radium Hospital alone has led to the establishment of approximately 40 SMEs in recent years. The integration of explorative, clinical, and commercial research forms the core of Oslo Cancer Cluster, a Norwegian Centre of Expertise.

Norway’s status as a healthcare pioneer with a prosperous future is validated by the presence of the global life science elite. Investors include names such as Merck (MSD) and Merck KGaA, Pfizer, Roche, Novartis, Sanofi Genzyme, Amgen, AbbVie, J&J (Janssen), Takeda, Bristol Myers Squibb, GSK, Astellas, Daiichi-Sankyo, Bayer, GE Healthcare and ThermoFisher. The list is growing and with the rise of entrepreneurial activity across the region, particularly across the medical and technologies sectors, the future of health investing in Norway looks bright.