Due to the intricate and time-consuming nature of clinical trials, Luxembourg healthtech players often find themselves struggling to mobilize funding when they most need it. Dr. Guy Fagherazzi, director of the department of precision health at the Luxembourg Institute of Health and Alain Rodermann, co-founder and managing partner at Expon Capital share their insights on how Luxembourg could resolve some of these issues.
Many of the key players in the healthcare sector, including researchers and venture capitalists have pointed out the lack of proper allocation of resources.
Dr. Guy Fagherazzi, director of the department of precision health at the Luxembourg Institute of Health highlights that there is an indispensable role of funding in nurturing the healthtech ecosystem.
“The healthcare system in Luxembourg is overall good, but there is a lack of interconnection between funding, real healthcare, clinical research and innovation,” said Dr. Fagherazzi.
Dr. Guy Fagherazzi, director of the department of precision health at LIH.
With health initiatives like the FEDIL Health Corporations, it becomes apparent that sustained investment is crucial for capacity building, particularly in establishing large coherent studies for data collection and research, fostering innovation, and attracting private sector participation.
The reluctance of venture capitalists to invest locally undermines the growth potential of the ecosystem.“The Digital Tech Fund, led by Expon Capital is one of the only funds focused on Luxembourg, we are missing more funding in Luxembourg,” said Alain Rodermann, managing partner at Expon Capital. This gap must be closed to unlock the full potential of Luxembourg’s healthtech sector.
Mr. Rodermann further accentuates the urgency and importance of addressing funding gaps within Luxembourg’s health tech ecosystem and urges for more collaboration with research institutions.
“There are VCs here, but most of them invest in other countries which doesn’t help the local ecosystem. If you ask the funds that were funded by the Luxembourg Future Fund how much money they invested in Luxembourg, you’ll find out it’s almost zero.”
Alain Rodermann, managing partner at Expon Capital.
Creating a culture of innovation
Fostering entrepreneurship through educational initiatives and support mechanisms is essential for cultivating a culture of innovation and risk-taking.“The entrepreneurs in digital healthtech are not in Luxembourg, one of the missions of the Digital Tech Fund is to attract them,” said Rodermann. By providing aspiring entrepreneurs with the necessary tools, resources, and mentorship, a conducive environment can be created to nurture new ventures and drive economic growth.
Government-led initiatives play a pivotal role in creating an enabling environment by offering tax incentives on stock options, grants, and regulatory support. “We hope that the new government will change the tax scheme on stock options, it is the worst in Europe,” said Rodermann. These measures not only reduce barriers to entry but also provide startups with the stability and resources needed to thrive in competitive markets.
Collaborations on an international scale, such as the Clinnova project, led by (LIH) involving multiple countries in the greater region, exemplify the importance of pooling resources and data to achieve critical mass.
“If we want to reach critical mass, leading us to important developments in medical technology and AI, we need the volume and data across borders, Luxembourg alone will not manage to get there.”
Dr. Guy Fagherazzi, director of the department of precision health at LIH.
While progress is being made, there is a recognized need for cultural shifts within the healthcare system to incentivize clinical research.
A new healthtech fund
Education and awareness are critical for unlocking funding opportunities. “It is very unlikely that a specialized healthtech fund will come into Luxembourg, the Luxembourg Institute of Health is partnering up with a number of countries to solve these issues,” said Rodermann. Many investors are hesitant to invest in complex tech ventures due the lack of a faculty of medicine in Luxembourg, for example.
While Luxembourg boasts a dynamic and robust healthcare ecosystem with high-quality services, there remains a gap in seamlessly connecting clinical practice with research and innovation.
“We are currently facing some challenges, when it comes to developing new technologies and collaborating with startups to develop and validate technologies,” said Dr. Fagherazzi. Dr. Fagherazzi proposes incentivizing more clinical research for clinicians, streamlining ethical procedures, and fostering collaboration across sectors. Systemic funding commitments from the government are essential for sustaining long-term initiatives such as prospective cohort studies.
The healthcare sector in Luxembourg has a shortage of skilled workers, and moreover of attracting and keeping said labour force.
“There must be an existence of programs in the sector to attract and keep skilled labour and the authorities must nourish them with beneficial structural systems.”
Alain Rodermann, managing partner at Expon Capital.
A shift towards programs aimed at nurturing, and educating health tech players is needed to further develop the ecosystem.
A need for data
One of the major hurdles faced is the accessibility to patient data and samples, crucial for the development and validation of digital health technologies. “We are lacking easy access to patient data samples, and this should be more straightforward than what it is right now,” said Dr. Fagherazzi.
Rodermann highlighted the preference of VCs for investments abroad, due to the availability of data, which in turn hampers the growth of the local ecosystem.“Venture capitalists’ stance towards investments in digital healthcare exacerbates the situation,” said Alain Rodermann.
The need for sustained funding and streamlined processes is critical for Luxembourg’s future development.
“If right now there is a healthtech company that wants to validate its innovation, they have to start from scratch, going through a long process that can take years. That is too long for the medical community, patients are in need of a solution to illnesses and diseases today.”
Dr. Guy Fagherazzi, director of the department of precision health at LIH.
Initiatives like the Luxembourg Centre for Translational Research (LCTR) are being pursued by (LIH), aiming to create a centralized hub for conducting clinical trials and validating technologies. “Compared to other countries, Luxembourg is small, the pool of patients’ data is relatively small, and hospitals are not used enough to perform clinical research on a continuous basis,” said Dr. Fagherazzi.
This article was first published in the Silicon Luxembourg magazine. Read the full digital version of the magazine on our website, here. You can also choose to receive a hard copy at the office or at home. Subscribe now.
