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April 29, 2022

Pharma fundraising in the digital age: HCS Pharma dives into crypto

HCS Pharma is amidst a EUR7m raise using crypto tokens. The firm’s CEO offers some tips for other companies considering the same approach.

By Reynald Castañeda

Have you thought of fundraising via crypto tokens for your next clinical trial? HCS Pharma is looking to break new ground with a view to raise EUR 7m via a Security Token Offering (STO).

The idea is that the pharma company opens an STO on the European Digital Assets Exchange (EDSX) and once its listed on the Frankfurt Stock Exchange, these tokens would be reversed into company shares, HCS Pharma founder and CEO Nathalie Maubon explains in an interview with Clinical Trials Arena. The future public listing of the company will free up US$20m worth of financing already secured from a US family office, she explains.

“We opted for going through a pre-IPO STO because it is the easiest way to have control of our company,” Maubon says. “VCs have a more hands-on control of the company but as a founder, I’d prefer to have more control of where the company is headed.”

Marketing is key in crypto fundraising

As for other pharma companies considering this approach, she says it is imperative to effectively explain the process to potential investors. On top of elucidating the mission of the company, marketing this fundraising approach to potential investors is key, she adds.

As for marketing, Maubon says, targeting crypto communities on social media is a good start. To further expand the raise’s reach, hiring a marketing agency that specialises in STOs and Initial Coin Offerings (ICO) would also be beneficial, she adds. Maubon says that HCS Pharma is working with two France-based marketing agencies specialising in crypto, noting that they were chosen because of their prior track records.

HCS Pharma founder and CEO Nathalie Maubon

The biggest challenge in going through this route of fundraising is explaining the concept to crypto investors, the CEO says. “We have to be clear that these investors are investing into a ‘real’ biotech company, rather than a virtual product.” If the potential investor is not into crypto, they can also invest using Euros via the same EDSX platform.

Public listing before YE

HCS Pharma is looking to be listed before the end of the year to hire people to develop its 3D cell culture technology Biomimesys, Maubon says.

“We want to create a technology that fully captures the complexity of human organs that can be used for preclinical research. When using animal models, they do not capture the nuances on how a drug would perform in humans, which can lead to a significant failure rate once the drug is tested in humans.”

On top of its US family office raise, HCS Pharma already has EUR2m from VC company Capital Cell. Since the company’s inception, it has raised around EUR5m in total, Maubon says. HCS Pharma is in talks with two different German banks regarding potential help after its public listing, but a decision is yet to be made, she notes.

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