DUBLIN, Ireland - Health care companies in Sweden and Denmark secured investments totaling US$537 million from 1995 to 1997, according to the Danish development agency Copenhagen Capacity.

Biotechnology firms accounted for about 80 percent of this figure, Lars Christiansen, at Copenhagen Capacity, told BioWorld International.

In all, more than 30 biotechnology and medical device companies obtained finance during the two-year period. The bigger deals involved Biora AB, of Malmo, Sweden, Maxim Pharmaceuticals, of San Diego, NeuroSearch A/S, of Glostrup, Denmark, and Swedish company Biacore Holding Ltd. All these companies raised US$35 million or more.

Investment deals involving U.S. companies are becoming an increasingly prominent part of the biotech scene in the region. Acadia Pharmaceuticals Inc. and Structural Bioinformatics Inc., both of San Diego, Phytera Inc., of Worcester, Mass., and Oxigene Inc., of Boston, all have established research subsidiaries in either Denmark or Sweden.

Acadia (formerly known as Receptor Technologies, of Winooski, Vt.) and Structural Bioinformatics both secured finance from Danish investors. Oxigene, which has a base in Lund, is listed on Nasdaq in the U.S. and on the Stockholm Stock Exchange.

Maxim, which is developing therapeutics and vaccines for the prevention and treatment of cancer and infectious diseases, is listed on the American and Stockholm stock exchanges. The company's lead drug, Maxamine, is based on the research of its founding scientists from the University of Goteborg, in Sweden.

NeuroSearch Success Boosts Sector

Several other companies are expected shortly to seek dual listings on either the Copenhagen or Stockholm exchanges along with one of the U.S. exchanges, said Christiansen.

He attributes much of the investor interest in biotechnology to the success on the Copenhagen stock exchange of NeuroSearch, which has raised the profile of the sector among the investment community.

The Danish mutual fund BankInvest established a specialist biotechnology fund earlier this year. (See BioWorld International, Jan. 28, 1998, p. 1.)

Another biotechnology fund is due to get off the ground later in 1998, Christiansen said. And about five biotechnology-related projects are at establishment phase in Denmark, although he could not supply any details.

The bulk of the current investment in the sector is derived from private sources, in the form of private placings and initial public offerings. Government finance amounted to US$69 million between 1995 and 1997.

Denmark's Growth Fund contributed US$44 million, while the Industrial Fund of Sweden contributed US$25 million. The two government funds operate in a broadly similar fashion, Christiansen said, except that the Swedish fund can offer a mixture of debt and equity funding. Its Danish counterpart supports companies by providing low-interest soft loans only.

Although both Denmark and Sweden have a strong research base in the life sciences, the emergence of entrepreneurial talent has been a more recent phenomenon. Christiansen said that experienced management skills are still in short supply and may need to be imported.

Moreover, the Danish tax code has not rewarded entrepreneurial risk-takers, but this situation has started to change, he said. *

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