Passion Investing - 27.08.2019

Sustainable Healthcare: A new Investment Theme

Improved returns by investing only in companies that deliver scientific innovation and at the same time directly address the spiraling costs of healthcare.


The Viopas Partners team discusses their investment approach that will push healthcare companies to make cost-saving a central strategic priority in order to ensure sustained profitability. How do they plan to do it? By only investing in pharma and biotech companies that deliver both scientific breakthroughs AND sustainable savings to healthcare systems.

Investing in pharma/biotech which contain spiraling healthcare costs is paying off
It’s no secret that payers are pushing back hard on the prices pharmaceutical companies charge for new therapies. That is having an effect not only on companies’ bottom lines and reputations, but also on patient access.


Now, investors are starting to take notice – and some are applying a new approach to how and where they invest. Viopas Partners, a Swiss asset manager, is at the vanguard of what it believes will be a healthcare investment trend: incentivizing pharma to contain spiraling healthcare costs with a fresh investment approach.

“Innovation at all costs won’t work anymore”
Over the past decade the three principals in the company have, from different vantage points, observed important shifts in the healthcare environment as drug budgets have become tighter and the costs of medicines have skyrocketed.

“In the past innovation trumped everything, and with this innovation came at ever higher prices. Innovation at all costs won’t work anymore,” says Michael Schröter, Founding Partner at asset manager Viopas Partners.

“We don’t believe companies will survive if they continue to operate the way they are operating right now. Access restrictions will result in both top- and bottom-line hits and ultimately investors will suffer” he said.

Saving healthcare system’s money will have a key competitive edge
There have been several high-profile examples recently of major drug companies that have had to make drastic cuts to the prices of novel therapies in the U.S. and Europe for important indications — and others that have failed to secure coverage in important European countries. Pricing pressures have also weighed on the first-quarter results of some of the major players.

“We believe that companies will run into difficulties if they don’t get the price equation right from the start. Those companies that develop medicines with a superior clinical profile as well as the ability to save healthcare system’s money will have a key competitive edge,” Schröter, who has held executive roles at Roche and Eli Lilly, added.

Improving outcomes to patients, while not adding to costs
Viopas Partners, which was founded in October 2018, is seeking to invest in biotech, pharma, medtech and eHealth companies that deliver products that improve outcomes to patients, while not adding to or even lowering costs to the system.

“This could mean that patients spend less time in the hospital and are faster back to normal health,” co-founder Nathalie Flury, who has an 18 year-track record as an equity fund manager, said.

Investing with impact
The Viopas Partners team has no doubt that the trend of mounting pressures on healthcare systems is here to stay as populations age, science advances at a blistering pace, and patients take a more hands-on approach to their own care pathways.

At the 2019 SG Cowen Annual Healthcare Conference in Boston, analysts and investors discussed the need for a different investment approach that focuses on healthcare system sustainability.

“Healthcare costs are one of the most pressing issues we are all facing, but this is not something that is included in the traditional environmental, social and governance criteria that have so far guided sustainable investments. Investing in companies that are taking determined steps to address healthcare costs in a sustainable way is a great way to realize a true socio-economic impact,” Flury said.

Viopas has launched its first certificate through GENTWO’s issuance setup
Viopas Partners, anticipates the innovative companies it is backing will outperform markets as they address this overarching macro trend, Flury added. A growing number of investors and companies seem to be ready for the Viopas approach: “Responses we have received have typically gone from ‘this is very interesting’ to ‘this is the right thing to do’ to ‘how can I participate and invest?’, Schröter said.

Viopas Partners, which launched its first certificate through GENTWO’s issuance setup in April 2019, is the first asset manager that enables investors to put their money in healthcare companies that are directly addressing the spiraling costs of healthcare. The Actively Managed Certificate that Viopas has launched is investing in a basket of listed biotech, diagnostic, medtech and eHealth firms, that develop and deliver value-based treatments that offer improved outcomes.

Viopas – a real expert when it comes to sustainable Pharma and Biotech investments
“Coming from the industry, I saw first-hand the need patients have for new drugs – as well as the challenges for payers. Viopas is the first asset manager to work with investors to address these challenges. We have a good team with the right skillsets, and we can move rapidly,” Schröter said.

If Viopas Partners is right with its new investment approach and others follow suit, this, rather than noisy public debate and political posturing, could provide companies with the incentive they need to put sustainable access strategies front and center of their business models — right from the start, while rewarding investors with sustainable profitability.



The team behind Viopas Partners
Michael Schröter: Over the last 20 years, Michael has held several executive positions within the R&D and commercial organisations at Roche and Eli Lilly. He also co-founded a biotech company. In his last role at Roche, Michael was responsible for establishing sustainable innovative pricing models with national payers in over 20 major markets.

Nathalie Flury: Nathalie has an 18-year track record as an equity manager. She invested a combined $ 5 billion in listed and private equities for several European-based mutual biotech and healthcare funds. She managed biotech and life sciences funds for Clariden Bank (Credit Suisse), Global Asset Management and Pictet Asset Management. She also provided start-up and growth capital to more than 10 private companies by investing in ventures such as Biomarin Pharmaceuticals and several Swiss private companies.

Simon Nebel: Simon has worked for four Private Equity vehicles in healthcare and renewable energy over the past 20 years as Managing Partner at Aravis, with a total of more than 250 million Swiss francs under management.



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