The health industry is like the cook school: Always process the commodities properly
News | 06.10.17IT, data protection and data security
The Lifandis story
Lifandis AS (former Hunt Biosciences) managed Norway's most valuable biobank and its data; the so-called HUNT collection. HUNT is one of the most comprehensive health investigations of its kind and is internationally acknowledged. Expectations were high. Lifandis should place Norway on the map with regard to international biotechnology and pharmaceutical industry.
However, Lifandis never became viable, and after nine years, several private placements and the loss of tens of millions kroner in share capital, one resolved to liquidate the company. What went wrong?
Willingness to invest
Hadean Ventures is a venture fund based in Oslo investing in health and biotechnology companies in Norway and the Nordic countries. The team has its background from Inventages, one of the world's leading venture funds within health technology.
Argentum and others have already invested 150 million kroner in the fund, and the intention is that the final size of the fund shall be 900 million Norwegian kroner.
Norway has undoubtedly excellent research environments within life sciences. Examples are Oslo Cancer Cluster, Oslo Science Park with the Aleap incubator and Norway Health Tech and the research environments at NTNU in Trondheim, and Sintef. Hadean Ventures has faith in these and other environments in Norway and that in the future they will foster companies that will be of interest to the fund. The test nevertheless consists in whether the environments are successful in commercializing their research, and the commodities require proper processing all the way.
A regulatory minefield
Norwegian health industry must navigate in a regulatory rather complex landscape. Actors not acquainted with the Norwegian health and data protection legislation might be surprised at how demanding it will be to gain an overview of the rules, and all the inspection authorities involved in the interpretation and enforcement of the rules. Moreover, Norwegian hospitals with a data protection representative traditionally interpret the rules very strictly, which has caused – and causes – frustration in the research environments.
In Norway, we have traditionally operated with strict divisions between different undertakings and skepticism against making health information available to actors outside of the health service, and delivery to research is no exception in this respect. However, the rules have softened up in recent years, e.g. by adopting new health register legislation in 2014. However there is still a strict practice regarding exploitation of health information for research purposes.
Proper processing of the commodities
A successful commercialization strategy for the exploitation of biobanks and health registers assumes thorough knowledge of the governing rules. If this is not in place, it is easy to misstep in the development phase, and significant costs may accrue in connection with changing the service or the product in order to comply with the legislation.
Optimal exploitation of resources require compliance with the rules, but also avoidance of choosing a commercially less profitable solution after advice from the data protection representative, inspectorates or other instances that often tend to too conservative interpretation of the rules.
Market credibility must be an objective. The trend is that it is not sufficient to comply with laws and regulations; you must also be able to show that you do so. Serious customers and investors will always require documentation, and so it is important that you can demonstrate that products and services meet the legislative requirements.
Back to Lifandis
Perhaps the Norwegian research environment can learn from the Lifandis story. Where did they go wrong? Did the rules block the way for an optimal exploitation, or was it the lack of ability to market the product and attract investors? The authors of this article do not necessarily have all the answers, but note that qualifications and experience concerning the commercialization phase is decisive for succeeding in the international health industry.
This article was first featured in Finansavisen 25 September 2017.