Social causes, especially those related to the well-being of the little ones, often attract the solidarity of those who try to contribute their bit, commonly in the form of a donation. But it is difficult to see them as an object of investment. And altruism figures are not enough. “The private sector moves five times more money than the public sector or philanthropy. And the foundations have very limited monetary capacity,” he says. Marc RamisPhD in Molecular Biology from the University of Oxford, with business studies at Harvard.
Pediatrics needs a boost and there is a market large enough to give it through private investment. Among other reasons, because most of the drugs in circulation are developed for adults and then adapted for children. “It is seen very clearly in the case of aspirin. It is designed for adults, but it is broken in half to supply it to children,” he argues. Ramis.
There is a lot of pediatric innovation generated in children’s hospitals that could fill this gap and that “is ready to move patients, but investment is lacking in the initial steps,” continues the doctor. To give it an outlet, pediatrics is increasingly focusing on impact investing. It is one that seeks, while obtaining profitability, to cause a positive social effect. And through it, Montana, an investment fund led by the Ship2B Foundation, through the hand of Dr. Ramis and with the collaboration of the Catalan hospital Sant Joan de Déu.
Montana intends to attract 30 million euros to invest in between 16 and 18 child health start-ups, at a European level, in a period of five years that will begin on January 1, 2024. The best ones will be chosen in the development of solutions specially designed to improve children’s health at all stages: from gestation to ages between 16 and 18 years.
Social impact and profitability
The fund has been crowned the first European with these characteristics and is already approved by the National Securities Market Commission (CNMV). If everything goes according to plan, they will make a first capital closing at the end of the year, in order to start investing as soon as 2024. And next year they will close it definitively, once the monetary objective has been reached.
Its managers make an effort to make it clear that the fund “guarantees a social impact, but also a return for its investors, like any other”. However, they recognize that, by their nature, monetize “is not your priority”. On this aspect they do not reveal the figures yet, for confidentiality reasons. Nor the identity of the investors, although they affirm that they will basically be European and international public institutions, large foundations and individuals who allocate part of their assets to social causes.
Innovations that do not arrive
Precisely due to lack of financing, there are certain pediatric solutions that cannot be transferred to the market. Start-ups cannot find enough capital to launch medicines and devices specially designed for children’s health.
In figures, only 24% of the medicines approved by the Food and Drug Administration (FDA) of the US Government have a pediatric indication, according to Arnau Valls, coordinator of the Innovation Department of the Sant Joan de Déu Hospital in Barcelona.
In the case of rare diseases, the vast majority of which begin to manifest in children, 50% of the drugs that are prescribed are not validated or have a specific indication for children. And in neonates, this figure rises to 90%.
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Montana will focus on developing projects in oncology, rare and genetic diseases, and mental illness. All of them originated from European hospitals, mainly from Barcelona. “We are especially interested in the development of new medicines to treat childhood cancer”, he specifies Ramis. But they also focus on monitoring and improving the quality of life of patients affected by mental health diseases.
“Impact investment is the fit that pediatrics needs in the market,” justifies the specialist. The funds have already invested in pediatric companies before, but one specialized in this science had never been heard of before. AND its birth opens the door to more investments of this type in the future. Or so, at least, those responsible expect it.