Financing innovation in health care

Financing innovation in health care

Patrick Van Beneden, Executive VP of Gimv’s Life Sciences division, explains Gimv’s investment strategy and shares his vision on the life sciences sector.

For an investor like Gimv, the core business of medicine is new drugs and devices to treat disease. Diseases like cancer and Alzheimer’s continue to cause untold misery to millions of people around the world. And many existing drugs have side effects. Demand for more effective and safer drugs will stay. Innovation is required to develop those drugs, and innovation is what Gimv finances. We take a closer look at Gimv’s investment strategy and its vision on the life sciences sector with Patrick Van Beneden, Executive VP Life Sciences at Gimv.

How do you see the life sciences sector evolving in the coming years?

Drug development today is more and more a biotech story. The pharmaceutical sector has a number of key challenges, one of which is the ‘patent cliff’. When a patent for a drug lapses then the revenue from that product typically collapses as the market is taken over by generic manufacturers. Patents obviously expire all the time but in 2010 and 2011 we’re seeing a significant bulge in the number of expiring patents. This is at a time when most companies have relatively thin pipelines. The net result is declining revenues. In response, pharmaceutical companies have been reorganizing their businesses and reducing costs. We’re seeing increasing amounts of M&A activity as the sector consolidates. And apparently over 60,000 jobs were lost in the sector in 2009.