BIOVERSYS (COVID-19) (IDFF)

Promoter – Financial Intermediary

BIOVERSYS AG

Location

• Switzerland

Description

The project supports the company's research and development (R&D) investments in the field of antimicrobial resistance, in particular tuberculosis and nosocomial infections. By targeting hospital-acquired infections the project also addresses COVID-19, as such co-infections very often occur in hospitalised COVID-19 patients, leading to serious complications.

Additionality and Impact

The financing of this project addresses the failure in financial markets for RDI - in this specific case in biopharmaceuticals. The failure arises in part from limited access to and/or higher cost of financing due to information asymmetries associated with the inherent uncertainty of RDI activities, and resulting in high screening and monitoring costs. Other factors are the misalignment of incentives, lack of collateral and/or lack of track record.
Through support from the Infectious Diseases Finance Facility (IDFF), the operation addresses the need of a financially underserved company operating in the sector of anti-microbial resistance linked to high, unmet medical needs. The contribution to EU policy is therefore significant.
The EIB's contribution is notable on both the financial and non-financial side. The funding provided under IDFF will substantially enhance the financial resources available to the borrower to execute its development plan and may crowd in further investors. Structuring the financing as a venture debt operation (equity risk) is appropriate given the borrower's stage of development and takes its cash flow profile into account. Therefore, the EIB also provides an added value in terms of financial structuring expertise, in addition to the technical contribution and advice.

Objectives

The project supports a clinical-stage biopharmaceutical company focusing on the treatment of anti-microbial resistance. The objective is to further advance the product, conduct additional clinical studies to validate the product and obtain regulatory approval. The proposed transaction will enable the Promoter to address one of the highest unmet medical needs for new treatments against life-threatening resistant bacterial infections and chronic inflammatory microbiome disorders. The project aims to increase the overall survival rate and quality of life of patients. In addition, it will encourage the growth and development of European scientific acumen.

Sector(s)

• Industry - Manufacturing

Proposed EIB finance (Approximate amount)

EUR 20 million

Total cost (Approximate amount)

EUR 49 million

Environmental aspects

The investment activities such as research, development and clinical studies are expected to be carried out in existing authorised facilities. Therefore, it would not require an environmental impact assessment (EIA) under Directive 2014/52/EU amending 2011/92/EU. Full environmental details verified during the appraisal.

Procurement

The Promoter is a private company, not operating in the utilities sector and does not have the status of a contracting authority; thus the project is not covered by EU directives on procurement. However, the Promoter's procurement procedures are expected to be in line with EIB guidelines for private sector projects. The Bank's services verified details during the project due diligence.

Status

Signed - 26/03/2021