The fact that many life science companies in the development phase are having difficulty raising capital has hardly gone unnoticed. Investors have instead chosen to place their capital in safer sectors. It is difficult to say with certainty when the recovery in the capital raising market has begun, but there are encouraging indications.
Want to treat the aging and painful back
The latest company to give cause for hope is the unlisted medical technology company InossiaThe company focuses on the treatment of osteoporotic spinal fractures and degenerated discs. With the patented product Inossia Cement Softener The intention is to soften today's bone cement and thereby offer improved treatment for these two diseases.
In the first indication, the goal is to mimic the body's normal bone tissue and reduce the high rate of new fracture recurrence after treatment, which is due to today's hard bone cements. For those - often older - patients with degenerated discs, the company hopes to offer a completely new treatment in the form of a minimally invasive procedure and thus increase the number who can undergo treatment. Currently, standard treatment means that only 1 percent of those affected can receive surgery.
Inossia is running a large randomized controlled clinical trial where the company's emollients are being evaluated in osteoporotic spinal fractures at nine hospitals in Spain, Canada, Germany and Poland.
Good capital contributions this year
However, conducting clinical studies is costly. In tough competition, the company received EUR 7,3 million in funding earlier this year from European Innovation Council (IEC) Accelerator Program.
The financing from EIC consists of a grant of EUR 2,3 million and EUR 5 million as a contribution to the company's equity, the latter of which is made through a new issue of shares at a time chosen by the company. This contribution is a seal of quality for the company and has had a positive impact in several ways. Among other things, according to the company itself, it has justified a valuation increase of SEK 20 million, together with the cash contribution.
In addition, the financing was based on a recently completed investment round, which due to the attention was oversubscribed by approximately SEK 0,5 million and represents a capital injection of a total of SEK 10,5 million. The majority of the current shareholders chose to participate in the new issue, but also a number of new investors such as ScaleUp Life Science Invest, Svanberg & Co. and the entrepreneur working in health tech Maria Rankka. In one statement Inossia writes that the company's value now exceeds SEK 100 million.
Whether Inossia's success is one of the initial signs of recovery remains to be seen – but it is clear that the future for this company has brightened.