The European Investment Bank (EIB) has provided a EUR 10 million long-term loan to Swedish biotech company Cavidi AB for developing a next generation automated testing device for HIV viral load. This is the first transaction under InnovFin Infectious Diseases, an innovative high risk-taking financial instrument recently established within the new generation of financial products for innovative and growth companies – InnovFin.
Cavidi’s novel technology for HIV monitoring is proven to work in simple and less sophisticated laboratories, such as a non-cleanroom environment. These are common in low and middle-income countries, which are often hit worst by the HIV pandemic. The new testing device represents a breakthrough as the correct measurement of the actual viral load in HIV patients can contribute enormously to the efforts to reduce the growing AIDS epidemic – maintaining a low viral load reduces the chances of transmission of the virus.
The company expects to launch this next generation HIV viral load monitor during 2016 and to quickly gain a significant share of the market for HIV diagnostics in near point of care centres such as district hospital laboratories in low and middle-income countries.
This first EIB operation under InnovFin Infectious Diseases is supported by the new generation of financial instruments for innovative and growth companies “InnovFin – EU Finance for Innovators”, with the financial backing of the European Union under Horizon 2020. The aim of InnovFin Infectious Diseases is to allow the EIB to fund high-risk projects in the area of infectious diseases, where the risk is linked to the successful development of innovative vaccines, drugs or medical devices, and to their future commercialisation.
Jonathan Taylor, EIB Vice-President with responsibility for lending in Sweden, stated: “We are pleased to be partnering with Cavidi in this breakthrough operation as it will enable the EU bank to support future technologies whose concrete applications will effectively tackle the HIV pandemic. With this first InnovFin Infectious Diseases loan we confirm our commitment to providing easier access to finance, especially for higher-risk projects, in the medical sector. This is crucial to bridging the gap from pure research and development to commercially viable enterprises in Europe. Projects like this strengthen the competitiveness and boost the innovative capacity of European health-related industries and businesses, so enhancing Europe’s position as a major technology supplier and supporting skilled employment opportunities.”
John Reisky de Dubnic, CEO of Cavidi added: “The EIB’s new financing vehicles will play a key role in developing innovative companies and new commercial successes. These new financing sources are crucial as they are some of the few available for companies moving from an R&D success to a commercial product. We have a proven and effective technology that can benefit millions of people in high-burden countries. This support from the EIB will help us realise our technology faster and increase access to viral load monitoring for those living with HIV who need it most.”
Carlos Moedas, European Commissioner for Research, Science and Innovation, said: “This first loan under InnovFin Infectious Diseases will not only help speed up the development of an innovative device for monitoring HIV treatment for the benefit of patients, but will also support the growth of an innovative family-owned European business. This is one of many examples of how Horizon 2020, the EU funding programme for research and innovation, addresses major societal challenges, while stimulating European competitiveness and growth.”
Effective HIV monitoring reduces the cost of medication and the risk that a person living with HIV will infect others. It therefore helps manage the disease effectively and limits its spread and the future suffering and costs to society that this will cause.
The European Investment Bank (EIB) is the long-term lending institution of the European Union and is owned by the EU Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. In 2014, EIB financing in Sweden amounted to EUR 1.41 billion, with the main focus on projects promoting sustainable transport, energy efficiency and urban development (for more details click here).
Cavidi is Sweden’s leading supplier of HIV viral load monitoring equipment. Its products enable efficient management of anti-HIV drugs so that people with HIV can enjoy a normal lifespan. Cavidi’s viral load diagnostics reduce the cost of treatment and the spread of HIV. Cavidi is a Swedish biotech company that uses methods and research from leading virologists from Uppsala University. Cavidi has offices in Sweden, South Africa, India and the USA.
About InnovFin financial products
Under Horizon 2020, the new EU research programme for 2014-20, the European Commission and the European Investment Bank Group (EIB and EIF) have launched a new generation of financial instruments and advisory services to help innovative firms access finance more easily. Over the next seven years, “InnovFin – EU Finance for Innovators” will offer a range of tailored products which will make available more than EUR 24bn of financing support for research and innovation (R&I) by small, medium-sized and large companies and the promoters of research infrastructures. This finance is expected to support up to EUR 48bn of final R&I investments.
InnovFin builds on the success of the Risk-Sharing Finance Facility developed under the seventh EU framework programme for research and technological development (FP7), which financed 114 R&I projects to the tune of EUR 11.3bn and in addition provided loan guarantees worth over EUR 1.4bn.
Backed by funds set aside under Horizon 2020 and by the EIB Group, InnovFin financial products support R&I activities, which by their nature are riskier and harder to assess than traditional investments and therefore often face difficulties in accessing finance. All are demand-driven instruments, with no prior allocations between sectors, countries or regions. Firms and other entities located in EU Member States and Horizon 2020 Associated Countries will be eligible as final beneficiaries.
InnovFin Infectious Diseases is a new risk-sharing facility designed to stimulate investment in R&D activities targeting the development of innovative vaccines, drugs, medical and diagnostic devices or novel research infrastructures for infectious diseases. With this facility, the EIB will target project developers in the field of infectious diseases that have successfully completed the pre-clinical stage and preferably early stage clinical development and now require clinical validation or are ready for later stage clinical trials. EU funding will enable the EIB to offer a range of higher risk financial products ranging from standard debt instruments (i.e. senior, subordinated, and mezzanine) to risk-sharing instruments with forgiveness options in the case of failure of the projects supported. To mitigate the inherent risks of the facility and ensure the most beneficial allocation of funds, targeted projects should exhibit a proven public health impact and market potential and enjoy the commitment of promoters to substantially co-fund the project.
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