{ 08 JUNE 2009 }


Higher efficiency
will be the main driver

Wellington Partner Erich Schlick on progress in the medtech industry,
Europe’s cutting edge and an award-winning therapeutics company.

Over the course of the past two years, Wellington Partners has invested in seven highly promising European medtech and diagnostics companies. Some of them have already launched their first products, and they are all facing the challenge of positioning their devices in a tough environment. But despite the deep global recession, they are still able to use two key arguments to convince decision-makers at hospitals and other healthcare institutions to invest in their unique products: Their technologies help doctors enhance cost efficiency in healthcare and improve clinical outcomes, often in combination with lower overall treatment costs. These are decisive arguments, especially in countries in which in-patient treatment is already being reimbursed on the basis of fixed, case-based payments. Initially following an Australian model, Germany has become a pioneer in this modern “DRG” (diagnosis related group) reimbursement system, which rewards efficiency gains. Payments to hospitals are linked to specific indications and set on a per-case basis rather than proportionately to the number of diagnostic and therapeutic procedures or the length of a hospital stay. Other countries, too, such as Switzerland and France, have since begun to reorganize their healthcare systems accordingly, and there are indications that DRG-based compensation might also play a greater role in the United States within the context of Obama’s planned healthcare reform.

Erich Schlick General Partner, Munich office

Generally speaking, higher efficiency will be the main driver of the healthcare industry at the end of the first decade of the 21st century. And one of the best ways to raise efficiency throughout the entire industry is to strengthen early detection of major diseases. Treating cancer patients while the disease is still in an early, non-invasive stage costs only a fraction of what would otherwise be necessary. What’s more: These patients have an excellent chance of conquering cancer and enjoying a healthy life for many years to come.

Naturally, it will still require a tremendous effort, lots of time and further R&D breakthroughs in order to ultimately overcome cancer. But we have already seen significant advances in recent years, not in the least thanks to the innovations generated by young companies that are active in cancer therapeutics. One of them, our portfolio company immatics, has made fantastic progress in developing highly tolerable disease-specific peptide-based cancer vaccines for the treatment of renal cell cancer and colorectal cancer. In early 2009, in fact, this company won the German Industry Innovation Award, one of the most prestigious distinctions in the German-speaking countries of Europe. We are proud to have been a part of this company’s success for more than five years. And we are highly confident that our other portfolio companies, too, have the potential to become best in class in their industry segments.