Danish life science ambitions
We would like to exploit the Danish life science research potential, we would like to have many viable startups, and we would like to strengthen Denmark's role as a life science export industry.
We have a good starting point in Denmark with high research activity and quality at our universities and hospitals. Furthermore, we have many life science innovation clusters, investment and venture funds which together possess the necessary capacities and competencies to select, test, develop and mature various potential products and solutions based on Danish life science research and innovation. However, this is not a guarantee that all Danish life science inventions, startups, and established companies will have the same and best conditions.
Challenging conditions
Potential life science entrepreneurs often find it daunting to start a business because it requires a lot of dedication, technical support, and financial assistance. Moreover, promising and innovative projects can be unsuitably rejected, overlooked, or bypassed in the existing ecosystem. And even when it succeeds in finding investors for a startup, there is a high risk that the new knowledge, idea, or invention cannot be translated into the product or solution originally intended, leaving the founder, company, and investor in a challenging situation.
According to the OECD, the overall 3-year survival rate for startups in Denmark (across sectors) is around 50%, and those that survive do not necessarily achieve long-term success. The most ideal business model often differs from what was initially assumed, as market conditions and opportunities within the life science sector are both dynamic and complex. The path to success requires the exchange and sharing of knowledge and experiences – especially if synergies are to be created with other similar companies, which can be difficult due to considerations of intellectual property rights and competitive conditions. It is also difficult to make significant changes in direction or strategy, as it requires both stamina, resources, and renewed business planning.
Furthermore, access to capital and financing for the different stages of a company in the form of pre-seed, seed, series A and B funding based on sequential investment rounds is often very time-consuming and associated with great uncertainty and variation in valuations, market conditions, and changes in the composition of investor syndicates. These factors mean that many potential investors either do not want or cannot participate, further limiting the sector’s access to research and development capital.
Three focus points
To address all these challenges so that we can have more life science entrepreneurs and startups, and so that the startups that succeed in scaling up to an established company also have a potential opportunity to stay and create growth in Denmark, the strategies must therefore focus on:
• Breaking down barriers to the emergence of new life science entrepreneurs and startups
• Creating frameworks and structures for coherent and long-term support
• Ensuring the sector’s access to financing for all stages of company development
And just as importantly, it is important to maintain the current Danish Funds model so that innovative research projects at our universities and hospitals can continue to receive support – after all, it is a prerequisite that there is a broad origin of new knowledge, ideas, and inventions if there is to be anything to commercialize.