How to invest in Scotland’s life sciences sector

30,000 people are employed in Life Sciences. Picture: TSPL
30,000 people are employed in Life Sciences. Picture: TSPL
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Scotland’s burgeoning life sciences sector is attracting more and more inward investment, as Scottish Government figures show that more than 37,000 people are employed in the industry, establishing the country as one of the largest clusters in Europe.

Whether investing alone or as part of a consortium or ‘Angel’ syndicate, there are countless opportunities to get involved in this burgeoning industry.

The Scotsman has been working with Innovation Funding Consultants Leyton to bring you information on this growing sector.

We spoke to several industry experts to try and get a feel for how, and most importantly why, investing in life sciences is both popular and foresighted.

Firstly, we discussed with Steve Ewing of Informatics Ventures how he has seen the growth in life sciences affect the partnership he makes between investors and early stage companies, particularly in their Engage Invest Expliot programme.

He told the Scotsman: “Informatics Ventures started to include life science companies in the Engage Invest Exploit (EIE) investor readiness programme in 2013 and since then we have worked directly with upwards of 50 or so drawn from all over Scotland.

EIE is our flagship investor readiness programme which connects the most exciting and innovative young tech companies with technology investors from all over the world and prepares them for the process of securing investment.

“This sector is a key constituency for us and for EIE 2018 we will focus specifically on life science companies in the Digital Health and Medtech space.

“In the period since Informatics Ventures’ EIE was established in 2008, we have worked hard to maximise the number of applications from the life science sector and we have seen growth in that time and expect to continue to see significant growth not least because data science and technology will play an increasingly greater role in medicine and well-being.”

From the investor side, we talked to David Ovens, the COO of Archangel Investors, Scotland’s leading angel investor group.

David said: “Our members have been investing successfully in the Scottish Life Sciences and Healthcare sector for over quarter of a century.

“Optos was the very first investment which Archangels made in 1992 and since then, over 5 million people have benefitted from their retinal scanning technology, which has saved people’s sight and, in many cases, their lives.”

On how investors are reacting to the growth of life sciences, David added: “We see a large number of high quality investment opportunities in the life sciences sector each year.

“Our members, as individual investors, are at liberty to invest in any, all or none of these opportunities and they can also invest in our portfolio of more mature investments in the sector as follow-on investment opportunities emerge.

“This is one of the big advantages of becoming a member of an organised angel syndicate such as Archangels.”

On some of the challenges facing a life sciences start up, James McIlroy, CEO of EnteroBiotix, one of Scotland’s most highly rated biotech start-ups, told us: “Access to multiple rounds capital will often be a considerable challenge for a Life Sciences start-up, given its need to develop and translate R&D.

“Finding investors who understand and are willing to back these types of companies and their founders is also critical.

“It can be quite a challenge to do this if the businesses has limited data and traction within a given marketplace. But persistence is key and making use of networks and contacts can help this area.”

Georgina Keys, an R&D Technical consultant at Leyton, who has carried out life sciences work for clients, mainly in the agricultural sector, touted Scotland’s strong position in the field as being beneficial for companies and investors.

She said: “Leyton has seen a large increase in the number of agricultural clients claiming Research and Development Tax Credits.

“Due to tumultuous times in the agricultural climate, fluctuations in food prices, climate change and off the back of Brexit, companies in Scotland are seeking to secure funding and tax incentives in order to ensure adequate monetary investment into their research and development projects.”