Marketplaces and analysts unite behind industry standard

Sweden is unique in the world in the importance of the stock exchange as a source of funding for life science companies. The number of IPOs in this area is in line with the rest of Europe as a whole. SwedenBIO wants to secure a long-term supply of venture capital by promoting high-quality information in connection with the distribution of ownership. Together with the marketplaces Nasdaq and Spotlight, SwedenBIO sets an industry standard for how this should be done.

The past year has been exceptional in many ways and the financial market has also been affected. A frenetic activity of IPOs and new issues has taken place in parallel with the world’s focus on life science companies. As the willingness to invest in the industry increases, SwedenBIO wants to take responsibility for facilitating the valuation of the companies based on relevant information.

As a result, the industry organization has revised the guidelines previously developed by its members on what information a life science company should be able to provide in connection with listing, new issues and capital raising in a broader sense. Now, the definition of these guidelines is being tightened as an industry standard in cooperation with the capital market players in Sweden and developed to include the technical readiness level. This responds to the increasing need to place life science companies along the development chain.

The guidelines are not binding, but will increasingly become standard practice in the assessment of companies by financial analysts and marketplaces. For Nasdaq and Spotlight, which have been active in the development now and in the past, this is in line with the needs they see.

– Using this model as set out in the industry standard will also make it easier for the companies to attract capital. We use it in our assessment and encourage advisors to ask for it more,” says Spotlight CEO Peter Gönczi, echoed by Nasdaq’s European listing manager Adam Kostyál.

– The challenge for this industry is to translate what you are doing to the common man, but if you can do that, you can come back to the market again and again,” Adam Kostyál points out.

The business and finance working group behind the industry standard brings together capital market heavyweights as well as representatives of life science companies themselves. According to Christina Herder, COO of Medivir and chair of the group, it is equally important for companies to follow for purely commercial reasons.

– There are no shortcuts to a long-term sustainable funding strategy. The information that our industry standard states that companies should be able to provide is basic information that companies need to be aware of at an early stage for their own benefit. This is to ensure a successful long-term development journey. This will lead to a more informed and stable flow of funding, says Christina Herder.

The industry standard is intended to help companies maintain control over their reputation. Values based on wrong expectations can lead to serious setbacks later on. Transparency pays off in the long run. At the same time, not all life science companies are created equal.

– An industry standard provides comparability between companies up to a certain limit. There may be information that cannot be disclosed in all cases after all. Then it is no more difficult than explaining why it is not possible. “Comply or explain”, says Christina Herder.

PDF: Industry standard for raising capital in life sciences

Video interviews:

BioStock interviews Göran Conradson, CEO of Ziccum, on industry recommendations from SwedenBIO regarding market information.

SwedenBIO interviews Adam Kostyál and Peter Gönczi on the importance of marketplaces for life science.

For more information contact Helena Strigård CEO SwedenBIO at helena.strigard@swedenbio.se or +46 (0) 73 640 28 05.

About SwedenBIO

The industry organization SwedenBIO works for a competitive life science sector in Sweden. We do this by creating effective interfaces between the different actors in the sector, by building knowledge and by giving the industry a strong voice in public debate.

Our nearly 300 member companies have a total of 20,000 employees and operate in the fields of drug development, biotechnology, medical devices and diagnostics or are experts in business development, financing, intellectual property and law, among others.