Challenges of access to capital markets in the Life Sciences sector

Javier Hernani, executive director of BME, pointed out that the fixed income markets have been pioneers in providing financing to the sector through green, social and sustainable bonds, especially by public issuers (government and regional governments). ‘However, only 16 companies in the sector are listed on the stock exchange, a figure that can clearly be improved,’ she said. Monserrat Martínez Parera, vice-president of the CNMV, also stressed the importance for the sector of being able to finance itself in the markets, especially in equities, and highlighted the latest measures announced to facilitate the registration of prospectuses, ‘an initiative on which we are working intensively together with BME’.
Juan Cruz, Secretary of State for Science, Innovation and Universities, also took part in the event, stressing that the sector is probably one of the most demanding in terms of financing to face the race for patents and research, ‘in which we all have so much at stake’.

Opportunities and strengths of the sector in Spain
According to Rocío Arroyo (ASEBIO), Fina Lladós (Farmaindustria) and Jordi Xiol (Ysios Capital), the development of a drug may require investments of between 1,000 and 2,000 million euros and an average time to market of 10 to 12 years. While Spain has talent and scientific capacity, the availability of capital is limited, especially compared to the United States and European hubs such as London or Frankfurt.
Critical issues:
- Taxation in Spain is a brake on investment. Sweden is mentioned as an example of a favourable tax model.
- Spanish culture prioritises savings over investment, resulting in a capital flow that often favours foreign companies.
- The implementation of the 32 measures recommended by the OECD could be key to improving access to capital.
Strategies for a more efficient capital market
During the second roundtable, in which two companies from the sector, Atrys and Orizon, participated, some very interesting ideas were also identified. Santiago de Torres (Atrys Health) and Carlos Buesa (CEO of Oryzon) discussed strategic solutions to strengthen the relationship between the Life Sciences sector and investors:
- Bringing the stock market closer to younger audiences: BME's image needs to be rejuvenated to attract a young audience and domestic investors.
- Facilitating access to the markets: from reducing costs and requirements to reducing the number of investors
- Harmonise with other international models to improve flexibility, speed in capital increases.

They also identified some proposals, including facilitating mechanisms such as the availability of ‘in the shelf’ shares to speed up operations, reducing excessive procedures that hinder investment or increase costs, and training managers to improve the narrative and relations with international investors, especially American investors.

Conclusion: a sector in transformation
The closing ceremony was attended by Carlos Cuerpo, Minister of Economy, Trade and Enterprise, and Cristina Garmendia, founding partner of SILO and President of COTEC, who concluded that Spanish biotech companies have two clear options for growth: to be acquired by large pharmaceutical companies or to access the capital market.