Switzerland, country of pharmaceutical giants, wants to attract AI startups

Shahram Ebadollahi, Global Head of Data Science and AI at Novartis, at a conference on Artificial Intelligence in Health in Basel. Dominique Soguel

Artificial intelligence (AI) can work miracles in hospitals: more accurate diagnoses, less administrative tasks and more time for patients. Switzerland is well positioned to become an AI hub in healthcare, but there are some complicating factors.

This content was posted on November 18, 2019 – 11:00 am

Smart machines can now capture and synthesize clinical data that was once scattered across tens of thousands of medical publications. Bots can scan social media and chat rooms to identify people with suicidal tendencies. Algorithms can track the emergence of rare diseases or the development of contagion. Voice recognition software can record the dialogue between doctor and patient in real time. And smartphone apps remotely diagnose skin conditions.

In the field of life sciences, Switzerland has a robust ecosystem that brings together, in particular, large pharmaceutical companies and ambitious startups from leading universities. Its ability to bring together innovation and capital has also not gone unnoticed.

It is no accident that Basel, home to pharmaceutical giants Rocheexternal link and Novartisexternal linkhosted for two consecutive years the main international summit on artificial intelligence in medicine called Intelligent Health AIexternal link. Additionally, startup hubs and business incubators in the AI ​​and healthcare sectors are proliferating in the country.

But experts note that there are also obstacles in the country. Some are inherent to a small and fragmented market, while others are derived from corporate culture.

small steps

“It’s not Silicon Valley,” says wryly Martin Pietrzyk, CEO and Founder of Unit8external link, a start-up developing AI solutions for medical companies. “Americans have big global ambitions from day one, whereas here we are more reserved. We are taking small steps.”

In this regard, Mindmaze, a spin-off of EPFLexternal link, represents an exception. Thanks to substantial investment from an Indian group, this start-up became the first unicorn in Switzerland, meaning it is now worth over a billion dollars. However, such a trajectory remains exceptional.

Swisscom regularly draws up a mapexternal link Swiss artificial intelligence startups. However, it only lists about twenty young companies active in the field of health and life sciences, with a clear focus on AI and with a scalable business model. The startup.ch websiteexternal link list 211 start-ups in the “machine learning/AI” sectors and 75 in the “digital health” sector. This last number should be compared to the 146 healthcare startups in Israel, a rising star in AI. However, this area is dominated by the United States and China.

The proportion of startups working on Big Data and AI is also lower in Switzerland than in other European countries, says startupticker.chexternal link which analyzed a database of 4,000 start-ups established in Swiss territory. This site found that only 14% of all start-ups work in life sciences, biotechnology or medical technology.

Stefan Suter, however, believes his home country has many advantages; that’s why he left Singapore with his family and returned to Switzerland to launch Curo-Healthexternal link. “The tax burden is moderate”, she observes. The workforce is well trained. And you have an excellent reputation. Wherever you go, your Swiss business card has great value, especially in emerging countries. There are few downsides.”

Stefan Suter, CEO of Curo-Health Dominique Soguel

Awaken interest in the world

Faraz Oloumi is a young Canadian at the head of a start-up that develops software to predict whether a person will lose their sight or not. He moved his business to Switzerland in January after being one of three successful candidates to join startup accelerator DayOne.external link in Basel.

Tested on about 2,500 images, the algorithm he developed is on average 5% more efficient than a private doctor (97% against 92%), indicates the young man. Since moving to Switzerland, his company Aurteen has grown much faster than when he was in Canada, he says, adding that it was easy for him to fit in here.

“You get support in different areas: technical support, mentoring, business development, clinical trials and there was even fundraising at an early stage of development,” says the founder of Aurteen. However, he notes that holding a position in Canada gives him access to useful data for conducting research.

Egle B. Thomas came to Switzerland with the experience he gained in California and now works as a coach at DayOne, one of the country’s many innovation hubs. “Silicon Valley offers very good funding and rapid growth at a later stage, but I believe that for the early stages, guidance and support is better in Switzerland. There is a greater sense of community here.”

Application development for DayOne testifies to Switzerland’s global appeal. Last year, 33 out of 59 applicants came from Switzerland, while this year it was 19 out of 125. Those numbers are also a result of better promotion around the world, says Fabien Streiff, head of healthcare innovation at DayOne.

Speed ​​drops: data and money

But Fabien Streiff notes that Switzerland faces two challenges in the field of digital health. The first is access to large datasets, with large countries having a natural advantage here, and the second is market access. While the path is generally clear in the biotechnology industry, the path is more uncertain in the field of digital health. “There are different ways to enter the market and it is a challenge for start-ups”, he says. For example, a company might acquire an AI-based solution for medical imaging or another for researching new drugs.

Entrepreneur Christopher Rudolf decided to set up his company Volv Globalexternal link in Switzerland after a conversation with the Swiss ambassador in London at an event dedicated to innovation in the field of health insurance. It is now based at the Biopôle science park near Lausanne, and its first project was to help a pharmaceutical company identify new patients who could be treated with the drug it developed for a rare disease whose prevalence is one in a million.

Settling in Switzerland was easy enough, but finding the money to get started proved to be much more difficult, notes Christopher Rudolf. “You walk into a bank with a real pipeline of deals in prospect and they say, ‘Sorry, we can’t help you. You haven’t been there for two years,’” he reports. “It would have been totally different in the UK.”

Another challenge comes from the fragmentation of the healthcare system in Switzerland. There are about 60 health insurers in the country who, according to Christopher Rudolf, have little reason to make big changes.

Tough approach from pharmaceutical giants

However, the high density of pharmaceutical laboratories in Switzerland represents an opportunity. “The pharmaceutical industry constitutes an important clientele. In this regard, there aren’t many better places to settle than Switzerland, Basel in particular,” says Stephan Suter, founder of Curo-Health.

He notes that working with Novartis helped establish his credibility to develop his business relationships in the pharmaceutical industry. While not wishing to be identified, other startup creators told swissinfo.ch that it is often difficult to attract the attention of large pharmaceutical groups. And some of them fear that these giants will copy their ideas if they can get their foot in the door.

Novartis Global Head of Data Science and AI, Shahram Ebadollahiexternal link, recognizes that companies like his may have “a kind of elephant” for smaller companies. “A start-up can struggle to find the right interface in the company,” he says. Last year, Novartis implemented Biomeexternal linka network that should help its sales teams create scalable digital programs with strategic partners, including small startups, to facilitate contact with the pharmaceutical giant.

Rival Roche has launched a digital health startup accelerator in Munich.external link and supports the BaseLaunch program in Switzerlandexternal link.

“We have the people, [mais] sometimes it’s hard for them to grow fast enough,” says Marc Stampfli, NVIDIA’s director of sales in Switzerland.external link which works to accelerate more than 1800 start-ups in Europe. However, he doesn’t want to reveal how many startups this company supports in Switzerland. “The interesting thing about deep learning is that it’s not something that only large corporations can do,” he says. If a company has its own niche and is unique, even a small one can leverage it across the world to become a major player in the industry.”

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