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German VC investors have almost completely withdrawn from early-stage financing of drug development projects and typically only enter shortly before the clinical phases.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.