2020 – Uwe Steinbacher and Manfred Ulmer-Weber take stock for SHS

Editorial staff: The year 2020 was marked by the occasionally dramatic effects of the coronavirus pandemic. According to the German Federal Statistical Office, the economy has declined by around 5 percent, making this the second largest drop after the 2008/2009 financial crisis. How would you describe your experience this year at SHS?

Uwe Steinbacher: We are aware of how difficult and indeed life-threatening the coronavirus pandemic has been and remains for many companies. For SHS as a healthcare investor, however, 2020 was the most successful year since our company was founded in 1993. This is certainly also because society has recognised how important not just a functioning healthcare system but also an innovative and strong healthcare industry are for the people.

Manfred Ulmer-Weber: In any event, the awareness of healthcare has increased among the general population as well. This is evidenced not least by the enormous presence of these topics throughout the media. The fact is that we placed six new investments in 2020 and sold three of our portfolio companies to strong, renowned, strategic partners.

Editorial staff: SHS holds shares in more than two dozen healthcare companies from Germany and Europe. How did your portfolio companies perform in 2020?

Manfred Ulmer-Weber: Of course, several of our portfolio companies are also struggling with the impact of this pandemic as well. Some of them are struggling more, others less. On average, however, our portfolio companies continued to grow in 2020, some of them even increasing significantly. This shows how stable the healthcare industry is, even in times like these. With their products and services, last year our portfolio companies managed to help diagnose and treat thousands of patients with a very wide variety of illnesses. In addition to this, we can report more than 20 new patents and lots of new jobs. This is how we can achieve a measurable impact with our investments.

Editorial staff: Can you offer some examples of this?

Manfred Ulmer-Weber: Three companies – neuroeventlabs, Salvia BioElectronics and Miracor – have been awarded a Breakthrough Device Designation by the FDA in the USA. This brings considerable advantages in terms of planned approvals but also in terms of return. GNA Biosolutions produces highly sensitive coronavirus testing systems for the point of care and has now received special approval from the German Federal Institute for Drugs and Medical Devices (BfArM).

Uwe Steinbacher: An impact was also achieved by Selfapy, a firm that offers online therapy for sufferers of depression. Under the German Digital Healthcare Act (DVG), this is a service that is now also available to patients with a prescription.

Our portfolio also includes the enzyme manufacturer c-LEcta, one of the fastest-growing biotech companies in Germany. With the enzyme DENARASE®, c-LEcta is an important supplier for numerous manufacturers of coronavirus vaccines. And the customers of Swiss-based evitria  include renowned pharmaceutical and biotech companies and research institutes that use monoclonal antibodies and comparable molecules by evitria.

Editorial staff: What new investments did SHS 2020 enter into in 2020?

Uwe Steinbacher: As already mentioned, SHS had investments in six healthcare companies in 2020. And with that, we set a new in-house record! All in all, we invested more than 40 million euros in growth firms and SMEs from our funds in 2020, with most of this placed in the six new investments. These are dynamic, innovative companies that will delight us and our investors.

Editorial staff: And how was 2020 in terms of exit projects?

Uwe Steinbacher: First off, we should point out that the majority of our investments grew significantly in terms of revenue and profitability. Against the difficult backdrop of the pandemic, this is testament to the many employees in our portfolio companies who do their best every day.

As far as exits are concerned, we successfully concluded three sales transactions in 2020. TNI Medical manufactures non-invasive ventilator systems, has approvals for the USA and China, and was sold to a major strategist in March. Single Use Support is a company that has already emerged as something like the gold standard for liquid logistics and suppliers of renowned pharmaceutical and life science companies worldwide. Single Use Support was sold to Pall Corporation, a life science company, in mid-2020. Then, shortly before year’s end, we sold puracon, a provider of sterile packaging services including validations, to a large German precision processor for medical technology.

Manfred Ulmer-Weber: We were able to realise significant proceeds with these exits in 2020 and could distribute these amounts to our investors.

Editorial staff: Who are your investors, and what do they expect of SHS?

Uwe Steinbacher: Subscribers to our funds include family offices, pension funds, benefits schemes, banks, churches and health insurers, as well as industrial firms. Naturally, these sophisticated, professional investors are answerable to their owners, customers or pension recipients. A solid return on investment is always the best argument to justify the trust they place in our work!

Editorial staff: What await the healthcare sector in 2021?

Uwe Steinbacher: The coronavirus pandemic will continue to keep us busy for some time to come; this is a major challenge – for society, for each individual but of course for the economy as well. We see two central tasks for SMEs in the healthcare sector: One task is digitalisation throughout the healthcare sector; the other task consists of mounting regulatory requirements, not just in the EU but in China as well.

Manfred Ulmer-Weber: Of course an important keyword in connection with these challenges is “equity.” Permitting efforts, research and development, not to mention the conquest of new markets, all cost real money for a healthcare SME. This requires a decent equity position and experienced investors who think entrepreneurially and contribute real added value in addition to capital.

Uwe Steinbacher: Our experience and our networking in the healthcare sector help us locate the unknown hidden champions that are working to develop truly innovative products. We consistently help develop these firms on the strength of our expertise and our capital. As the great confidence investors place in SHS funds shows, we are on the right track. We will continue along this path in 2021, including with regard to our next fund, SHS VI.

Thank you very much for the interview.