speaker-0: My name is Jennifer Smith Parker, Director of Insights at Biospace, and you're listening to Nature. In this episode, you'll hear from Hannah Franklin, Associate at BioAvents Capital, and Pablo Gabriel Cirrona Lopez, Director of Life Science Investment at Gaia Capital Elisc. We explore the rise of Southern Europe's biotech ecosystem, from Portugal's push to translate strong science into startups, to Spain's capital and talent, and what it will take for the region to compete on a global stage. Pablo, thank you so much for joining this episode of Denatured, where we're gonna be talking about the Iberian Peninsula and the investment there, as well as tying that into the broader European landscape as part of this series. If you can please introduce yourselves, that would be great. Hannah why don't we start with you?

speaker-1: Hi Jennifer, it's great to see you again and thank you for having me. My name's Hannah Franklin. I'm a British neuroscientist by training and an associate at BioVance Capital. Biovance is Portugal's only dedicated biotech BC fund, founded in 2024, and the founding team has raised over 60 million euros to invest in early stage innovative and disease modifying therapeutics at the preclinical stage. across all disease areas and modalities.

speaker-0: Perfect. Pablo, go ahead, we'll go to you.

speaker-2: Yeah, thank you for the invitation, Jennifer. ⁓ pleasure to be here. I'm ⁓ also a scientist by training and ⁓ I've been ⁓ at ⁓ Criteria Bioventure for the last eight years already, first as a principal and a year later I was appointed director of ⁓ responsible for for the investments in life science space. ⁓ Criteria Bio Venture is the ⁓ specialized ⁓ venture capital firm within the Criteria Kaisha Holding, which is the in you know, the company that managed the wealth of Kaisha Foundation. which is the one of the largest ⁓ foundations worldwide.

speaker-0: Brilliant. Well, that's a fantastic introduction. So let's go ahead and kick this off. So, Hannah, we know that as you said, BioVance is the only dedicated biotech VC in Portugal and and the focus is on Portugal and Southern Europe. So I'm curious, is that do you see Portuguese companies as needing to plug into northern European syndicates to survive, or is Southern Europe beginning to build enough critical mass to finance its early pipeline?

speaker-1: I think it's a really important question. I I think to be honest, both are true ⁓ and not necessarily mutually exclusive. I think the tide is turning. Life sciences ⁓ startups in Portugal have more than doubled ⁓ in the last six years and specialist funds like Biovance exist when they didn't before. But obviously biotech is collaborative by nature and we can't think of ourselves in a vacuum. I think the real question isn't necessarily whether we need international co investors. I think we definitely do. ⁓ especially you know for larger Series A rounds and beyond. And that's fine. I think that's how all ecosystems mature. But I think that the real question is is whether companies in southern Southern Europe are being pushed north out of necessity, or whether they're able to pull international capital south on their own terms. And Bibance's role really is to be that that local conviction layer to to enable the latter. You know, we're scientists first before we are investors, and we run deep scientific diligence. We've got long-standing relationships with universities, locally, institutes, founders, advisors, CROs, the list goes on. And then through the relationships that we're building with international investors, we can then give them the confidence to follow. ⁓ I think our portfolio is is really good proof. You know, Monday bio, who are developing cancer immunotherapies out of BioCant Park here in Portugal. We led their Series A and co-invested with Orby Med, you know, one of the largest biotech VCs in the world with, I think, over 17 billion dollars ⁓ under management, as well as with Tory Pines. And that's international capital coming to Portugal. Another example with LIGO Bio, ⁓ they're based in the Netherlands. This is our second portfolio company, but they've established a Portuguese subsidiary and they're hiring local talent here. So the relationship does flow both ways. And honestly, as a British neuroscientist who now works at a Portuguese biotech VC, I'm also living proof that that that the pull is real.

speaker-0: That's such an interesting point as you're saying, kind of tying it to the broader European landscape. And and that seems to be a common theme throughout this series as well. When it comes to Barcelona, we know that's a strong starting point in the region. But how also does that connection with Barcelona how is it connects with the rest of Europe when it comes to life science investment and the broader ecosystem?

speaker-2: Well I think you know we we have been ⁓ operating in in the ecosystem for long enough now to to become ⁓ you know ⁓ you know another player in Europe. So there's a lot of ⁓ you know interconnections ⁓ through through the years in multiple companies. So fortunately for the last fifteen years, companies that have been ⁓ initiated here in Spain have received significant ⁓ finding international VCs, both corporates and traditional VCs. And also, I mean this ⁓ allows us to hold not only criteria by venture but also other local investors to to play a role in in Europe but also in US. ⁓ of course I mean Europe is our ⁓ main focus but ⁓ I believe that I would say that Barcelona or Catalunya in general ⁓ is seen as another hub in Europe and there is we don't see much difference.

speaker-0: Makes sense. I I'm curious too, I'll swinging back to you, Hannah, when when it comes to Portugal. ⁓ and especially I think coming after BioEurope, which is obviously a giant coup ⁓ for for Portugal. So we I've heard many times that Portugal has long had a strong science, but lots of the infrastructure needed to translate that science into biotech companies. So where do you see the biggest bottlenecks today in moving from academic output to investable ventures? And actually, Pablo, that question may be relevant for you too about any bottlenecks moving from academic to investable ventures.

speaker-1: Yeah, I think you're absolutely right. ⁓ the first thing I really want to reiterate is that the bottleneck has never been scientific quality, right? Like we have proof of that. Ricardo Biavance's founder and managing partner previously identified promising science at Nova Medical School here in Lisbon while at our predecessor fund. And that later became Cell MABS, which was then later acquired by BioNTech for potentially one billion dollars. And that was the largest deal ever in Portugal. And in fact, ⁓ the largest exit across all sectors in in Europe in Q124. A principal, you know, in a similar way invested in science from the Institute of Molecular Medicine in Lisbon, whilst at Portugal Ventures. And that later became LIMFAT, which was acquired by Gamma Delta Therapeutics and later by Takeda. And these are these aren't flutes, you know, they're examples of what happens when someone with the right scientific lens and the right relationships. is actually looking, you know, in the right place. The science was there, it just needed to be found. So to to go back to your ⁓ your point about the bottlenecks, I I think there's a few ⁓ that we're actively trying to to address and support. Obviously we can't do it alone. I think firstly know how, you know, we're still building the playbook ⁓ for spinning out companies and there is limited track record to follow. I think you secondly smart capital and international relationships. Portuguese institutes haven't really been on the radar of investors who can validate the science, provide guidance and support, help build strong teams with track records, open doors to global networks, co invest with strategic partners. So that's precisely the gap that my colleagues built Biovance to fill. ⁓ another point, another potential bottleneck is is the commercial maturity of the tech transfer offices at universities. I think this is definitely improving. ⁓ but but there's still there's still work to do there. And I think fourth and and what's an important one to mention is is the density of the ecosystem. You know, I've seen this first hand. I I grew up in London and worked in London for a what for a long time. Cities like London, Boston, Switzerland, ⁓ you know, and Switzerland, they often run on these sort of serendipitous interactions, right? Chance conversation with a conference or a networking drink, where you, I don't know, meet a potential co-founder or lead investor. That sort of informal connective tissue is really, really valuable and it's something that Portugal is is still building. And I just want to mention one final and critical ⁓ gap that I think doesn't get quite enough attention is the space between academic grants and that first institutional check. I think it's important to mention Portugal benefits from from really good public funding through instruments like PRR and the EU Horizon programs. Projects have really strong access to non-diluted funding, but there is still a gap before that sort of pre 1 million euro pounds ticket, that window, where great science and teams are still sort of stalling. We often talk about the gap at the sort of later stage in the large amounts, but this gap is really important. So we we really do need to see more incubators and accelerators that can help bridge that gap and provide not just the capital, but the training and support. to turn really good academic research into, you know, independent investable biotech companies. Yeah.

speaker-0: love your perspective too. I I think Sheena has mentioned a lot of really great points in the sense of some of the potential bottlenecks.

speaker-2: That's fantastic. I mean, she definitely touched lot of ⁓ very relevant points. So ⁓ I mean everything started with good science, ⁓ good scientists, ⁓ good translational research as well. ⁓ I mean ⁓ and and this of course, I mean, from from research to to bring some innovation, I mean takes ⁓ takes a while. ⁓ you know, ⁓ we were lucky enough that ⁓ back in 2000s there was ⁓ very strong support in terms of ⁓ research funding and and translational research included. ⁓ And and that's helps a lot to to to to bring very good high quality scientists ⁓ to the region, right? So and then of course, I mean when you look at for good ⁓ opportunities, you can find it anywhere. In in fact actually one of our first investment was in Sanifit. That was ⁓ a technology ⁓ spin out from ⁓ Balearic Island, so actually in Mallorca. And this is a company that ⁓ after receiving more than a hundred million, I think it was around a hundred forty million ⁓ through different series ⁓ of run. Series D was the last one in which we were the larger investor. We we we we sold this company to buy for a few years ago for over a billion l ⁓ euros, right? So and this is something that sometimes it's difficult to believe that you know you're going to start a company coming from an island in Spain and that ⁓ years later you're going to sell it ⁓ to ⁓ international company, right? But it's all about good quality science and of course it's important the the support from the governments and regional governments that ⁓ that make the effort. ⁓ we're not gonna go that that far on the initial stages ⁓ but of course from the good science ⁓ you know we have already a good instrument first in our case and and I think it's good for for the whole ⁓ Spanish and Portuguese ecosystem. We have the foundation which is supporting significantly research and innovation. through different grants and in you know in particular actually to support entrepreneurship. We have since 10-15 years ago different ⁓ venture capital firms also ⁓ investing in ecosystem. We have ⁓ a strong support from the government ⁓ providing institutional funding ⁓ for tech transfer and early stage investment in particular in Spain. Tech transfer office that ⁓ Hannah mentioned ⁓ this is an important link. ⁓ I don't think we are still there as many other countries. They're not very sophisticated, but it's true that they have improved significantly through the years. So now you can definitely approach ⁓ many of them and ⁓ you you they understand the business and they facilitate right in transfer. There's still some of course ⁓ missing links. ⁓ I don't think ⁓ we have a strong entrepreneurial ecosystem. But this is not because we don't have talented people, it's just because you have to go through the process and this is something that takes ⁓ you know more time than people think. when we think about the US model on on on you know five to s you know yeah five years you know since investment and exit and you have this cycle, I mean this is no longer the case. I mean in many in in in many cases, most of the cases in in our countries, in Spain and Portugal and many other ecosystems, it requires more time. So that means that ⁓ someone which is a first time entrepreneur ⁓ may take ten years to be recycled, let's say in the system in in the ecosystem, right? And therefore we're not there yet, but We will probably in the coming years because we already started ⁓ many years ago. We are starting to see that ⁓ happening, ⁓ but hopefully we'll see more in the coming years.

speaker-1: It's clear that the ecosystem in Spain is is more mature than it is in Portugal. And I think the relationships, you know, biobants are very strong relationships with Spanish VCs. ⁓ and there's a lot that we've learned from from the ecosystem in Spain. I think to go back to the the TTOs and and the university level, ⁓ you know, the commercial maturity. I I was actually pretty amazed. I recently gave a lecture to first year PhD students at the Goldbank and Institute of Molecular Medicine in Lisbon. Before they even stepped foot into the lab and touched the pipette, they have formal lectures on understanding how to commercialise their research as steps to go from their research to establishing a biotech company. And critically, what a lot of scientists don't appreciate is, ⁓ I I I'm not the CEO type of personality, therefore My research can't go anywhere. And I was amazed by you know, obviously that's that's something that that VCs can can support just to help bring in the right people at the right time that have that understanding. We just need the good science. I I was really impressed that universities are from the very beginning of a PhD programme are really educating the scientists on on, you know, what's possible. ⁓ so I think that's a good example of how that that sort of how the ecosystem is maturing really at the sort of at the foundational level.

speaker-2: ⁓ that there are multiple programs, right? So this the European ⁓ at the European levels they're with a lot of of significant funding support to research institute actually to foster innovation and to ⁓ let's say to train ⁓ researchers in socialization activities, in tech transfer and so on. So I think it's people becoming more educated in this in this regard. So that's that's super helpful. It is true that ⁓ there's the the gap still exists, right? So it this is no UK in which you can you know have, you know serial ⁓ serial entrepreneurs, you know, that can approach VCs say, listen, I mean I've seen this opportunity, you know, and they actually ⁓ are very well prepared to and articulate it to to make a you know a good proposal right in which you can definitely invest in. So here still you know you have people that understand more and more what takes to to to develop a company or to to to want to start up a company, but you know, they don't really bring the credentials, right, for you to deploy, you know, several millions. So this is this is still missing. This is about talent as well, right? All the on the sense. So from research, this you need talented researchers, talented physicians, talented entrepreneurs. So sometimes what's missing here is not money, it's really talent. The bottleneck might be like

speaker-0: So why should pan European investors start paying attention to Portugal now?

speaker-1: Yeah, I think ⁓ an important and maybe obvious or not so obvious aspect to mention is cost, right? Lab space here is cheaper, hiring world class local talent who have often gone overseas and got PhDs in at Harvard, the likes like Pablo and some of my colleagues. ⁓ they're somewhat cheaper to hire. And early stage companies are are mak are reaching meaningful milestones on non-dilutive public funding before private checks even come in. So That means lower entry valuations, greater capital efficiency, more runway per euro or pound invested. So for an investor thinking about returns, which we all have to think about, that's that's really significant. I think you know the science justifies the attention independently of the cost advantage. ⁓ we're talking about institutes that have been for a long time publishing in top journals, scientists trained at world-leading institutes. And increasingly are choosing to come back and and build here, like my colleagues. And I think we've between Pub and I we've emphasized the point that the raw material has always been exceptional, right? You know, what's changing is the infrastructure around it. ⁓ and and funds like like ours are part of that infrastructure. I hope we're the first of of many, ⁓ especially in Portugal. You know, the ecosystem's maturing, the signal's getting stronger, and and the opportunity for international investors to come in. alongside local specialists who do our own de risking and relationship building, is real. And and beyond all of that, Portugal's just, you know, a fantastic country. I I chose to move here. The weather, the food, the people, so yeah.

speaker-0: Yeah, I know. always say I'm super jealous of you, Hannah. Or where you were too in Spain as well, Pablo, because I like Barcelona so well. And I think Pablo kind of the last last closing ends ⁓ on you for looking at Spain and then what if you were looking the next like five to ten years? Where do you see the ⁓ investment opportunities? Where do you see Spain growing? Sure, I mean

speaker-2: I mean there's a few things I would like to highlight about here. I mean I we we we have you know we're investor in b different countries and every time you you invest in another country you say well our country's not that bad actually. That's that's a good thing, actually. And I can give you a few examples. Right. I mean in terms of clinical research, I mean Spain is one of the if not the best, one of the best countries ⁓ for clinical research in the world. I mean ⁓ you know this is top notch ⁓ clinical research. ⁓ so the the mechanisms are very simple and if you want to if you invest in a company which you're going into run clinical trials it's facilitates a lot everything. There is ⁓ there is and there will be ⁓ very strong support from investment perspective from the government so there will be ⁓ significant amount of money to deploy in the ecosystem which always ⁓ helps to match ⁓ you know BC funding. From a corporate perspective, someone may expect ⁓ countries in the south of Europe to be kind of complicated. And I have to say that this is not the case. When you really need to draft documents for transactions, that's very simple. So in terms of of of opportunities, I I mean I we don't have to repeat ourselves on the quality of the signs, and there is a strong, very strong VC base in in in Spain, in particular in in Barcelona. So I think it's it's an easy simple, let's say, or easy a place to look for good opportunities where you can easily syndicate and you can have a long term partners, right? ⁓ in the future.

speaker-0: Brilliant. Well, thank you so much, Pablo. And thank you so much, Hannah, for joining us podcast and making me incredible j incredibly jealous of not living there right now, where it's now about twelve degrees and alternately rainy and sunny in London. And very much wishing I was were both of you right now as I'm wearing a giant jumper. But thank you so much for joining this episode on investment in the Iberian Peninsula as well as linking it to the rest of the European ecosystem. If you'd like to listen to more episodes of Denatured, please turn into biospace dot com. Thank you.