Essange Reagents: an asset and an impact maker

An essential contribution to patient care
“Essange is a leading Dutch developer and manufacturer of hematology and immune reagents for global players in in vitro diagnostics (IVD). For example, Essange produces reagents that are used to test and diagnose diseases such as bone marrow tumors, gastrointestinal infections and autoimmune disorders. The earlier the mentioned diseases are diagnosed,  the better they can be managed. This is not only beneficial for the patient (increase in quality of life and survival rates), but also beneficial for the healthcare system in terms of costs and burden. As PGGM we saw strong impact angles, particularly for the Dutch healthcare system and its patients. Furthermore, we thought the investment in Essange was attractive, because the company is active in a niche area; a specialized market with multiple layers of market positioning protection thanks to its premium reputation in the market.”

A reliable partner
“The company was one non-core entity within a larger holding and was to be carved out and set up as an independent entity, in which Gilde saw the opportunity to professionalize and make patient outcomes better. There is a lot of upside in this process as the company would be allowed to shine as its own entity while also allowing management to focus on multiple optimization initiatives. As PGGM Private Equity we operate on a Fund of Fund model and co-invest alongside partners all around the world. We have selected Gilde Healthcare as a partner because of their focus on healthcare in the Netherlands and DACH regions. We do not have influence over the day to day running of the business and trust our partner Gilde to act in our best interest.”

Measurable impact
“Essange contributes to SDG 3 and SDG 8. We believe that the impact is significant and measurable through the 5.3m bone marrow tests performed, 24.9k tests to timely detect and terminate ineffective therapy, more than 19m tests to correctly match patient and donor blood, 4.6m tests to diagnose gastrointestinal infections or autoimmune disorders, and 40k rabbits spared from a life as a test animal (for the year 2022). Essange has developed an alternative to animal testing which replaces Rabbit Pyrogen Tests, which require three healthy rabbits for each test. Pyrogen tests are used to test for pyrogens, which can trigger an immune response from the human body, leading to a fever or worse (septic shock) when using injectable medical formulations.”

3D investing principles
“Due to the direct correlation between the business model and the impact that is being generated, we believe that Essange intrinsically aligns with our 3D investing principles. A successful investment would imply that the company thrives as an independent entity, continues to develop its customer portfolio and executes operational optimization strategies. This would directly result in impact: continuing to develop and produce important tests that are used to diagnose and better treat patients resulting in better care and a reduced overall cost burden to the healthcare system. The return profile of our impact investments is aligned with that of non-impact Private Equity investments, and impact investments go through the same investment and diligence process as non-impact investments. For Essange we see a consistent level of risk/return profile which is the same with the non-impact investments.”

Low societal and environmental risks
“Due to the nature of the business we do not expect any environmental risks. Likewise, we do not expect the social risks  to occur, since we believe the business provides an important service to the healthcare system in the Netherlands. As a limited partner, we typically have limited direct influence on the company and its operations. However, because of this we only enter into transactions with partners that we know and trust, and who have a proven track record. We also analyze previous ESG events and/or risks during Due Diligence and take into account how our partners have acted in such situations. In the event of an unforeseen ESG event, we rely on Gilde to navigate these matters.”

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