DIADEM (EGF VD)

Promoter – Financial Intermediary

DIADEM SRL

Location

• Italy

Description

Quasi-equity financing to Diadem, an Italian biotechnology company developing prognostic testing for early detection of Alzheimer's disease.

Additionality and Impact

The project concerns an operation under the European Guarantee Fund. The purpose of the loan is to provide direct, equity-type financing under EIB's Venture Debt Instrument to support Research, Development and Innovation ("RDI") activities of the innovative company 'Diadem', an SME based in Italy, which has been impacted by the COVID-19 pandemic. The financing of this project addresses the failure in financial markets for RDI, arising from limited access to commensurate financing as a result of factors such as information asymmetries, misalignment of incentives, etc. The Promoter is a dedicated medical technology company developing innovative solutions for the early prediction and diagnosis of Alzheimer's disease, with the aim of potentially enabling early interventions to slow disease progression. The project targets an unmet need with high socio-economic impact. By creating knowledge externalities, the project will provide significant socio-economic benefits, will strengthen Italy and Europe's leading position in medical technologies, and it will help to retain skilled staff engaged in the Company's RDI activities. 

EIB's financing would be complementary to European venture capital ("VC") investors and would provide a signalling effect to crowd-in other capital providers, which are necessary for the completion of the clinical development stage and the launch of commercial operations. Hence, thanks to EIB's involvement, this project will not be significantly delayed due to the crisis.

Objectives

The proposed transaction will support research and development (R&D) investments to address a high-unmet medical need in the fields of prediction and diagnosis of Alzheimer's Disease (AD), a disease that has a high economic and social burden globally. Diadem's technology is offering the unique possibility to detect AD at an early stage or even predict AD in asymptomatic patients, which may provide the great opportunity to start preventive therapies with disease-modifying treatments (DMTs) and/or non-pharmaceutical interventions that may change the progression of the disease. The project supports ongoing R&D activities conducted by the Promoter and its network of partners, which encompasses universities, research institutes and other private companies (suppliers, etc.). It represents a rational allocation of resources. Furthermore, this project sustains the Promoter's long-term growth through the development of innovative diagnostic tools.

Sector(s)

• Services - Professional, scientific and technical activities

Proposed EIB finance (Approximate amount)

EUR 8 million

Total cost (Approximate amount)

EUR 20 million

Environmental aspects

The proposed transaction will support research and development (R&D) investments that are required in order to advance the clinical development of an innovative product in indications that address a high unmet medical need. By co-investing in the project, the Bank contributes to improving healthcare, whilst also fostering the generation of European scientific knowledge and acumen, preserving and cultivating highly skilled employment opportunities. Developing orally applied receptor modulators for hematologic malignancies, i.e. cancers that affect the blood, bone marrow, and lymph nodes, commonly known as leukaemia.

Procurement

The Promoter is a private company not operating in the utilities sector and not having the status of a contracting authority; thus, the project is not covered by the 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 will verify details during the project due diligence.

Status

Signed - 24/02/2022