#BIOSPAIN2023Interview | "In Spain, there are still few researchers who venture to turn their project into a company with the ability to develop a product and bring it to the market"

We spoke with Raúl Martín-Ruiz, partner at Ysios Capital, Gold Sponsor of BIOSPAIN 2023, about how to transform scientific knowledge into a successful company and the major challenges that entrepreneurs have to face.

Raul Martin-Ruiz_Ysios

Science and innovation undoubtedly stand as two main drivers of social well-being and economic development. In recent years, and especially during the pandemic caused by Covid-19, biotechnology has escalated to become a deep tech that is significantly transforming the world around us through multiple technologies.

The picture we observe reveals a clear need for political leadership through regulations and measures to support science and innovation. This effort's mission is to provide our country with an R&D system in line with its economic potential, allowing us to face the social and generational challenges that loom on the horizon.

In this sense, innovation and entrepreneurship are two concepts that go hand in hand and often face significant obstacles, especially when it comes to transforming scientific knowledge into a successful company. This is a challenge well understood by Ysios Capital Partners, a specialized investment management company in life sciences that develops disruptive therapeutic products, and a Golden Sponsor of BIOSPAIN 2023. Raúl Martín-Ruiz, partner at Ysios Capital Partners, explains how their work creates value by assisting entrepreneurs and business leaders in tackling the challenge of turning scientific knowledge into a successful company.

AseBio. Ysios Capital's mission is to promote innovative and transformative science. In this regard, what picture do we currently observe of science in Spain?

Raúl Martín-Ruiz. Since our inception in 2008 as specialized life sciences investors, we have witnessed exponential growth in the biotechnology sector in Spain. We can confidently say that it now possesses all the necessary ingredients to become an economic engine for the country.

However, despite the quality of our science, there are still few researchers in Spain who venture to turn their projects into companies with the capacity to develop a product and bring it to the market. Until very recently, there were no success stories in the sector, meaning those cases where a company was created, properly funded, and either acquired or went public to finalize its developments. Success stories like Sanifit, STAT Dx, and Tigenix, three of the first Spanish companies that have gone through all these stages (in the case of Cellerix and STAT Dx, even reaching the market), have undoubtedly inspired other entrepreneurs in the sector, and we trust they will inspire many more.

Having said that, it is still challenging to find funding for the early stages of development when sufficient data have not yet been generated to attract specialized venture capital investors. At this point, the presence of public funds that understand the characteristics of these companies, from the idea to the end of the value chain, is essential.

As investors, our commitment is to continue fostering the growth of the sector and contribute to its consolidation as a driving force for the country's future economy. In this sense, it is important to continue supporting international projection and provide Spanish biotechnology with the tools and resources to develop its potential.

AseBio. You invest globally in biotech companies with a focus on innovative therapeutic drugs. What are the criteria of your investment strategy?

Raúl Martín-Ruiz. That's right, Ysios' goal is to invest in companies that are developing innovative therapeutic products aimed at addressing unmet medical needs.

The typical lifespan of our funds is 10 years. Usually, the first 5 years are dedicated to making new investments, and the following 5 years are focused on divestments. It is crucial to choose projects whose development timelines align with the fund's timeframes.

After conducting a thorough analysis of each company, we, along with the management team, define their capital needs based on development timelines, value inflection points, and exit opportunities. Our role is to provide not only capital but also our team, contacts, and know-how to maximize the probability of success and divestment for these companies.

Apart from this comprehensive analysis, there are various key elements to consider when evaluating an investment: the scientific basis, the data obtained to date, the therapeutic modality, the genuine need in the targeted diseases, the competition (both existing and in development) in those diseases, intellectual property, the team, and the interest of major pharmaceutical companies in taking over our stake to complete product development and market launch.

Our challenge is to transform capital into medical advancements with a positive impact on society.

AseBio. From your experience, what are the key factors in transforming scientific knowledge into a successful company?

Raúl Martín-Ruiz. The reality is that there is no one-size-fits-all recipe, but there are various key elements to consider when evaluating an investment to identify opportunities that could turn into successful cases:

  • Good science
  • Strong team
  • Strategic vision
  • Adaptability and flexibility
  • Adequate financing
  • Market and industry knowledge

Not necessarily all of these points have to be fully covered from the beginning, but it is essential that the team recognizes their importance and is willing to work alongside investors and experts to address them.

We must bear in mind that the biotech sector carries very high risk. We are talking about scientific, technological, biological, clinical, regulatory, and commercial risks. The key lies in identifying these risks during the evaluation process, working to mitigate them, and making timely decisions. In-depth knowledge of the sector is crucial to managing these risks, and that is where specialized investors can make the most significant contributions.

Ysios brings experience, expertise, market insight, and the necessary contacts to transform scientific knowledge into a successful company on a global level with a positive impact on society.

AseBio. What does Ysios Capital expect from BIOSPAIN 2023?

Raúl Martín-Ruiz. BIOSPAIN is a leading event that has played a fundamental role in the growth and development of the sector. We have participated in every edition since 2008, have been repeat sponsors since 2014, and have clearly witnessed its evolution.

The biotech sector requires significant collaboration among all stakeholders, from investors who often invest in syndicates to companies that sometimes have co-development programs with larger enterprises. BIOSPAIN has always been crucial in bringing together different market players and showcasing the Spanish biotech sector internationally.

In this edition of BIOSPAIN, we look forward to learning about the progress of companies we have been following for a long time and discovering new projects with the potential to become major success stories in the sector, as mentioned earlier.

BIOSPAIN has also become an excellent international showcase for Spanish biotechnology. To date, Ysios has co-invested with more than a hundred international investors, and 24 of them have already co-invested with us in Spain, bringing in four times the capital we contributed from Ysios. We hope to meet with them to explore new co-investments and connect with others who have expressed interest in Spanish companies.