Financing of German biotechs

Eter­ny­gen GmbH is a company foun­ded in 2012 to deve­lop compounds to combat meta­bo­lic dise­a­ses such as diabe­tes, obesity, non-alco­ho­lic fatty liver, etc. The novel approach is to modu­late the INDY gene expres­sed in the liver. The novel approach is the modu­la­tion of the INDY gene expres­sed in the liver which comes from longe­vity rese­arch. (INDY = I am Not Dead Yet). In fact, modu­la­tion of the gene in animal models also has strong posi­tive effects on the longe­vity of diffe­rent species.

German VC inves­tors have almost comple­tely with­drawn from early-stage finan­cing of drug deve­lo­p­ment projects and typi­cally only enter shortly before the clini­cal phases. Foreign (mainly Anglo-Saxon) early-stage inves­tors, on the other hand, invest in early stages but really only in their home markets. To break out of this dilemma, we had to forge a consor­tium of our exis­ting inves­tors, a German rese­arch company (Evotec AG) and a US/UK VC. Evotec AG is one of the world’s leading publicly traded drug disco­very compa­nies and has provi­ded deve­lo­p­ment services to Eter­ny­gen as a prefer­red part­ner in the early stages of deve­lo­p­ment. The fact that Evotec has now also joined Eter­ny­gen as an inves­tor and that the exis­ting inves­tors have reinves­ted was ulti­m­ately such a strong signal that we were also able to attract Epidarex Capi­tal from the UK as a lead investor.

The willing­ness of foreign inves­tors to bear early deve­lo­p­ment risks in drug deve­lo­p­ment is more prono­un­ced in the UK and the USA. There are seve­ral reasons for this: on the one hand, inves­tors from these regi­ons see them­sel­ves more as co-entre­pre­neurs who very actively support the company with advice, support and networks, thus mini­mi­zing their own risk. On the other hand, the fund volu­mes are usually some­what larger, so that they could also finance early deve­lo­p­ment projects into the clini­cal phases from their own funds.