Adam Marťák, founder and CEO of ambiom—a life science advisory firm in Bratislava—shares insights into Eastern Europe's biotech scene. He discusses the challenges startups face, from navigating complex regulations to securing funding. Marťák explains different biotech valuation methods, emphasizing that early-stage companies offer greater upside potential for investors. The conversation also explores how pipeline composition affects success rates and touches on the increasing influence of AI in drug discovery, transforming the investment landscape.
The biotech landscape in Eastern Europe shows significant disparities, with Slovakia lagging behind countries like Estonia and Lithuania in developing infrastructure and supporting sectors.
Early-stage biotech valuations heavily rely on pipeline potential and investor preferences, highlighting the critical role of effective R&D funding and market access planning for startups.
Deep dives
The Foundation and Growth of Ambiom
Ambiom was founded by Adam Martak after he returned to Slovakia to help shape drug reimbursement policies. Initially created to allow him to consult on projects while serving as a state employee, the company has evolved into a consulting firm focusing on business development, market access, and technology transfer within the life sciences sector. It operates primarily in Slovakia but has noticed regional differences in the client base, with clients mainly from Western Europe. Despite having some clients from Eastern Europe, the majority of their business has come from various EU countries.
Regional Disparities in Eastern European Biotech
The biotech landscape varies significantly across Eastern Europe, with Slovakia lagging behind neighboring countries like Estonia and Lithuania. Lithuania is investing heavily in a new biotech city infrastructure, while Estonia has made notable advancements in digital health. These disparities highlight the importance of foundational research and existing strengths within a country, which can drive the growth of the biotech industry. The podcast emphasizes that for a successful biotech scene, it's crucial for a country to build on its existing strengths and sectors, such as Austria's notable emergence in oncology and immunology due to its strong research background.
The Importance of Start-Up Support
Biotech startups typically require a significant amount of upfront investment, primarily for R&D expenses, which sets them apart from other industries. Many early-stage biotech companies often lack support in crucial areas such as market access planning and regulatory guidance, leading to common pitfalls. As such, consulting services for these startups can include account management, product strategy navigation, and technology transfer support from university settings. Addressing these needs can significantly enhance their chances of securing funding and navigating the complex landscape of biotech.
Valuation Methods and Investment Trends
Valuations for early-stage biotech companies are typically based on pipeline potential because of the inherent risks involved in drug development. Methods such as discounted cash flow (DCF) and risk-adjusted net present value (RNPV) are used to assess a project's viability, with late-stage valuations focusing more on projected cash flows. Additionally, investment trends showcase a preference for areas like oncology and rare diseases due to their favorable reimbursement environments. Despite an improved overall funding climate, particularly compared to the past, there are concerns about a tightening investment landscape following the peak of funding activity observed in 2021.
ambiom is a life science commercial-advisory business development company based in the Slovakian capital of Bratislava.
The company helps its corporate clients with their product strategy, in- and out-licensing efforts, including asset valuation (NPV, rNPV), M&A scouting, complex due diligence and dealmaking.
ambiom also provides input on regulatory matters, support in pricing and reimbursement decisions and communication with decision-making authorities. The company guides products from the beginning - the basic science - all the way to commercialization or spin-offs.
Our guest on the podcast this week is the founder and CEO of ambiom, Adam Marťák. We discuss the biotech scene in eastern Europe, the company, and look at some of the challenges facing biotech companies as they navigate the financial pathway alongside drug discovery, regulations, and commercialization.
00:45-02:33: About ambiom 02:33-03:11: ambiom clients 03:11-04:21: Biotech in eastern Europe 04:21-11:35: Focusing on a niche 11:35-13:13: What do startups need? 13:13-15:19: How do you help startups? 15:19-16:52: Tech transfer 16:52-18:35: Early-stage and late-stage biotech valuations 18:35-21:48: Different valuation methods 21:48-22:53: Why do early-stage biotech valuations offer higher upside potential for investors? 22:53-23:42: How do you measure the value of pipeline potential? 23:42-24:35: Does a bigger pipeline guarantee more success? 24:35-27:08: Can companies look more attractive to investors? 27:08-28:41: Does pipeline speed affect investment? 28:41-30:27: Which valuation method is better for biotech companies? 30:27-31:46: Are some areas of biotech better for valuations? 31:46-33:18: What affects valuation? 33:18-35:13: The difference between financing of expensive and cheaper drugs 35:13-36:57 : Is funding more difficult now, and is it changing?