Ice, fire and a small army of health tech startups

The inspiring force of homegrown unicorns and a health system whose size and accessibility makes it an ideal test bed for new innovations, are among several factors shaping Iceland’s emerging role as an epicentre of health tech enterprise.

Genetics also aid its disproportionately large – for a nation of less than 400k people - contribution to global health innovation.

A homogenous population, descended from a small number of common ancestors, and much of it tracked via meticulous genealogical records, support its reputation as a geneticist’s dream; playing a major role in global research projects where the turning down of genetic interference is key.

As Health Tech World discovers on a fact-finding mission to Reykavik, Iceland’s is an inter-connected and uniquely accessible health ecosystem.

The gatekeepers at various barriers on the health tech startup’s journey – like public health leaders, European funders and government - are all at the end of a phone call in this island nation; and progress can, therefore, move faster.

One of these gatekeepers, Sigurdur Thorarinsson, CTO and head of innovation at Landspitali University Hospital, Iceland’s largest hospital, says: “A key success factors for startups here is that the community is close and the degree of separation between two people is very small.

“If I want to get attention from a CEO of whichever company, if I have an idea. And if I can’t get through I call someone I know that knows that person. If you need the help from the president you call her.”

The hospital prides itself on an innovation model that encourages health tech startups to engage if they can help in its goal “to become the smartest hospital in the world”.

“You need aspiring goals, but yes I think this is realistic,” says Thorarinsson.

“The healthcare system can be very sluggish, with technologies and services that are very mature. Then you see the startups that are moving very fast and they are very agile. We need to be agile and able to move quickly and change processes as needed.

“Our model is also built around collaboration. We collaborate with support network partners in Iceland and the Nordics. We are not going to do this ourselves.

“We also aim to create a simple, open and transparent process. You hear from many hospitals and healthcare organisations that these processes are difficult to navigate that it can a year just to get going – a year in the life of a startup is forever."

Health tech startups in Iceland now have the guiding stars of a few homegrown healthcare multinationals that have gone before them.

They include pharma firms, well established global mobility tech business Ossurr and Kerecis, championed as Iceland's first unicorn after its US$1.3bn sale last year to Danish medical company Coloplast.

Fertram Sigurjonsson, CEO and founder of Kerecis, which uses fish skin for novel wound dressings, believes such successes have raised investor interest in Icelandic health tech.  

He tells Health Tech World: "Most investments in the past have been in real estate and traditional businesses and companies on the Icelandic stock exchange have their values based on multiples of EBITDA. There has not been a big history of venture investments in Iceland.

"But, because people can see others making money now, there is now substantially more investment interest in startups."

Ágúst Hjörtur Ingþórsson, general director of Rannís, the main funding agency in Iceland for research and innovation, as well as education and creative industries, agrees.

"In terms of investment, [health tech] is fairly new but now we have a very strong venture capital environment. Ten years ago that was very limited," he says.

One catalyst for this development has been a significant change in Iceland's pensions market.

"Pension funds can now, to a limited extent, invest in venture funds, which they could not do before. We have a very strong pensions system. They are mandatory for everybody, so this is very, very big.

"We've also seen a number of success stories come out of Iceland so there is more interest from international venture capitalists."

Like Kerecis, another Icelandic health tech success which has drawn appeal from global investors is Sidekick Health; the digital health platform, which has been fairly acquisitive lately, and is now working with five of the world’s 20 largest healthcare companies.

Despite having operations across Europe and in the US, CEO and co-founder Dr. Tryggvi Thorgeirsson says the Icelandic market remains central to the business.

“It’s a fantastic test market for research and development because we have one of the best healthcare systems in the world by quality metrics. It’s really performing well with great health registries.

“We can also trace back diagnoses and easily track patients through a unique ID number that everyone has here, enabling high quality clinical research very efficiently.” 

Doctor-turned-health tech entrepreneur Kjartan Thorsson, whose firm is using data to help tackle the opioid crisis, similarly believes in Iceland's status as an ideal test market.

"It's like a Petri dish," says the co-founder and CEO of Prescriby, a data-driven treatment management platform for addictive medication which has rapidly spread its reach across Iceland.

"The size makes it really easy to get nationwide implementation if you have a good solution. Iceland is also highly digitised with internet access of about 98 per cent of all the population and people are very tech savvy if you have a good digital solution."

Continue reading to hear more from these and more Icelandic entrepreneurs and other key figures at the heart of Iceland's health tech startup scene.

Transforming the healthcare system from within

We talk to the CEO of Helix, an influential force in Icelandic healthcare, about its mission to revolutionise the patient journey.

As CEO of Helix, Arna Harðardóttir is responsible for the electronic health records (EHR) system that supports care in all settings across almost the entire country of Iceland.

And three decades on from its original inception, its development continues at pace – with Arna targeting a more patient-centric shift in the coming years.

“The next step for us is that we really want to transform EHR systems,” she says.

“The main challenge for the healthcare system is not that the systems aren't working correctly, it’s that the processes in the healthcare system are not correct.

“We need to change them so that we can see more patients and that the patients can do more themselves as individuals.

“This will happen through new technology and new ways of working with the technology. Health tech needs to be built around the individual. We need to make the individual more of a decision-maker in healthcare treatment and more responsible. They are the most underused resource.”

Helix was founded in 1993 when three entrepreneurs came together with a common desire to digitise the Icelandic health system.

They ultimately created the first EHR system in Iceland – which Helix continues to service.

In addition it has developed other solutions since; including apps for use in care settings and for medical admin tasks and the Icelandic ‘patient portal’.

Then came the pandemic, which heightened the need for its creations and expertise, including from beyond Iceland's shores.

“During the pandemic, almost every Icelander entered the patient portal at some point,” says Arna.

“It already existed before COVID, but in a really limited way. In the pandemic Helix and the health tech sector generally in Iceland quickly grew. We made the COVID testing solution and the vaccination solution. We also made the first digital vaccination certificate in the world.

“Our software developers were assisting the World Health Organisation and the EU in how to digitise everything around COVID. We really saw the value of the patient portal during the pandemic.”

Arna, a biomedical engineer by background who took the reigns as CEO in September 2023, is now keen to lead the company towards global projects where its experience in digital health could make a difference. This, while remaining a central force for good within Icelandic public health.

Once such area of opportunity is in the digitisation of at-home care. In Iceland, where an aging population is spread across remote and often-hard to access areas, this is a much needed health tech intervention. And Arna believes its work in this field could be expanded into other territories.

“We really see the potential of growing outside Iceland, having seen the impact that we’ve made here with home care. It is often difficult and expensive to track how people are going at home. We can also see in Iceland that in elderly care homes, people today are staying there for an average of just 18 months. It has changed to much because people are just going there when they are really sick. People are staying home for longer periods. We will see that increase because it’s much cheaper, and of course people would rather stay at home. We need to find a way of how to service them well.

“Before our homecare solution, everything was on paper. Employees printed off everything in the morning that they needed to do and at the end of day the nurse would enter [into the system] what was done; so the nurse, their most expensive employee, was often being a secretary.

“We have an app with real time information on what needs to be done for each resident. It’s personalised and easy to track the work. We can take a picture – for example of a wound – and that goes directly to the EHR system. The doctor at the hospital or clinic can then see this and respond directly.”

Admittedly, says Arna, achieving a system linking care-in-the-community providers with frontline, health facilities so seamlessly may be more challenging in areas of a larger population.

“We have the same EHR system across 90 per cent of Iceland and almost everyone is using it in every level of healthcare. Because of this, it’s so easy for innovative solutions to connect to the whole market. Iceland is quite far ahead in being a digitised nation.”

Helix has the biggest software development team in Icelandic health tech at around 55. And, as experienced by health tech employers in other European markets, finding the developer talent to enable its growth plans remains a huge challenge.  

“There is so much competition to attract skilled people, with developers especially, so it can be difficult to find the correct people for the correct position.”

The best talent can perhaps be enticed by the promise of working on a project which is integral to the delivery of health services in Iceland - the EHR system.

Arna says: “We own the code, we own the solution and we take our responsibility very seriously. We think it’s not enough to just modernise the system, we need to transform it.”

As part of the drive towards a more patient-centred system, will AI play a more prominent role?

“We are we're always looking towards AI and we have sister companies that are working on that, and we’re really excited about it. But Helix is mainly thinking of using it now in helping with logistics and using data correctly; for example when we're deciding what healthcare personnel a patient needs to see, and we're working from information and data. That's the magic with AI and healthcare.

“Using AI for diagnostics is going to be exciting, but we need to be careful and I think that’s further ahead; but AI in logistics can really make a difference fast.”

Helix’s overriding goal is to help to transform the processes within healthcare rather than simply the EHR itself.

Arna says: “The original EHRs were made when we were first digitising things, when we took the processes from paper to a digital process. The opportunity now is to change the processes.

“We need to because doctors and nurses are maximised in their efforts and we can’t ask them to do more – but we need to see more people in the healthcare system and we need to find a way to maximise the processes and the impact of the individual efforts.

“We need uniform registration and we need to be able to follow the individual through the system at different stages. If we had uniform registration and used the data correctly with good processes, we could also predict better how much of a burden a patient is going to be for the healthcare system, or when we need to move them from stage one to two. This would lower the cost of healthcare.”

Arna believes this long term vision is an achievable one, and hopes Iceland can set an example to other countries in building their EHR system in line with today’s needs and tech capabilities.

“It would be great for Iceland to set a path because we know where the healthcare system is going now, and it’s not good. We know it’s going to be so expensive that it’s not going to be possible to pay [for everyone’s care]. We know that we are going to need so many healthcare professionals that it’s not going to be realistic.

"We can either change the processes and do something different, or just have less healthcare. It’s just not sustainable. I think Iceland could really be the test case of what is possible and what the world needs to start working towards.”

Icelandic health tech and the European context

Lucie Samcová–Hall Allen served for four years as the Ambassador of the European Union to Iceland until August this year. Here she shares her views on the impact of the EU on health innovation from Iceland

How does the EU play a role in supporting health innovation in Iceland?

Iceland has been a member of the European Economic Area since 1994 and that was quite a big game changer for Icelandic businesses, but also for Icelandic innovators. It meant suddenly moving from a situation where you're operating in a market with 370,000 people to being a part of a single market of 450 million people, 23 million businesses and a single market that now accounts for almost 20 per cent of the global GDP. I wouldn't want to overestimate it but I think that even our Icelandic counterparts would agree that Iceland's membership in the EEA was one of the defining impetus that allowed the kind of Icelandic innovation and creativity and trade openness that you can see today.

And has it had a direct role in some of the big health tech success stories here?

As one of the benefits of being a member of the EEA, Icelandic institutions, whether private or public, can benefit from EU funding, and Icelanders have been very, very good at reaching EU funds. If you look at, for instance, the average success rate of applicants in the Horizon Programme, Iceland is well above that. It’s also a partner which is very much in demand by others in Europe.

But yes, we've had some very good successes and Kerecis is one of them. In its early days it benefited from a specific facility for growing enterprises; and we're very proud to have seen it grow from a new idea a couple of decades ago to Iceland's first billion dollar unicorn.

How does the EU support cross-border research for Icelandic health tech innovators?

In all of our research programmes, international cooperation is very strong. EU programmes are, of course, huge for funding, but even more important is the fact that they enable you to tap into knowledge that exists elsewhere; and to connect to partners in a way that wouldn't be possible elsewhere. It also means that businesses can outsource production or scale up very quickly from a small market.

And does the flow talent from Europe also enable a speedier journey of health and medtech development?

Absolutely. Iceland is part of the Schengen area, which means Icelanders can settle, work and study in the EU, and vice versa. This is something that really happens a lot. We have over 45,000 European citizens live in Iceland, which is a significant proportion of Icelandic society. When I have travelled around Iceland and visited many of the EU funded projects, the teams there tend to be very international, not only from Europe but also further afield.

Are there any areas for improvement in terms of the ease at which health tech startups and entrepreneurs can access EU support? 

For a startup or a new company, the idea of tapping into public funds can be a little frightening because you imagine that it will come with an awful lot of red tape and conditions but it won't be fast enough, which is not the case.

That's maybe a message that we need to spread more to make sure that it’s not always the same businesses that have already built the knowhow that can access support - and that new entrants to the market are aware of the possibilities and can access it.

Are there any other misconceptions you’d like to address?

Often people think of EU funding going mainly to the capital, but actually, when it comes to the health sector here in Iceland, a lot of it has actually gone to the countryside. For instance, there's a very interesting project that received EU funding based on the circular economy using biowaste from shrimp cells to create a dementia related treatment. So it’s not just centrally based in Reykjavik.

Icelandic firm Sidekick Health is on a mission to harness digital health advances to enable personalised care at scale, as Health Tech World reports. 

In healthcare today, many patients are treated with a one-size fits-all approach and treatment is most often given after the fact rather than being preventative. However, a significant amount of patients live with multiple conditions that need a personalised approach to their care.

Equally, many people do not have equitable access to healthcare, leaving many in need of solutions.

Sidekick Health is aiming to transform healthcare by utilising technology to provide multi-condition management and personalised care, as well to improve access to care for patients.

The firm currently works with five of the world’s twenty largest healthcare companies, with products prescribed on a regular basis by over 13,000 physicians.

Within the US payer landscape, the company is collaborating with one of the largest health insurers, and partners include Medicare, Medicaid and employer populations across the country.

In the pharmaceutical sector, it has strategic partnerships with Eli Lilly, Pfizer and others, with multiple partnerships across the US and Europe.

The latest steps in its expansion include the acquisition of Germany-based aidhere, a developer of prescription digital therapeutics, and its more recent acquisition in June of PINK!, a digital health company specialising in cancer support and women’s health.

Its acquisition of aidhere has bolstered Sidekick Health’s services with its expertise in highly-regulated PDTs, while the PINK! acquisition offers expansion opportunities in women’s health and oncology.

Speaking to Health Tech World at an innovation event in Reykjavík, CEO and co-founder of Sidekick Health, Dr. Tryggvi Thorgeirsson says that through providing digitised care management of chronic conditions and offering a platform covering multiple therapies, the company is aiming to improve clinical outcomes and reduce hospital visits.

“We digitise care management,” he says. “If you have a chronic condition, we work with three different approaches.

“We work with pharma companies, where we augment their pharmacotherapy. If a drug is prescribed for a condition, we augment that with our digital therapy, meaning if patients are getting a drug for breast cancer, we provide a breast cancer programme to help address the things that the drug might not help like anxiety, nausea, pain, and mental health. 

“Secondly, we work with health insurers. For example, we work with the biggest health insurance company in the US that covers almost 50 million Americans.

“They use us to power their platform to digitise care management and disease management. So, if a patient has cancer or high risk pregnancy or Crohn’s disease, they offer a care management programme, which is digitised to our platform. 

Thorgeirsson explains that patients are remotely connected with a care manager who helps them navigate their care and can pick up early signs of when things are going off track. 

“It helps patients self manage everything to have better outcomes. We’re seeing fantastic outcomes, we’re seeing reduced ER visits, reduced hospitalisations and improved clinical outcomes, as well as member satisfaction.

“We’ve built out over 20 different therapies or treatments for conditions that we can cover such as cardiovascular, metabolic, inflammation, maternity, and women’s health. That means that a patient doesn’t have to have two or three different apps, they have one platform. That’s why many of our clients are choosing us.

Thorgeirsson highlights how Iceland has created a fertile ground for innovation, supporting the development of Sidekick Health, and that the plans are now to reach a global market, having already expanded into the German and US markets.

“Last year we acquired a company in the German DiGA market. A few years ago, the German Health Minister decided to create an infrastructure where you can treat digital therapy just like you treat pharmacotherapy,” explains Thorgeirsson. 

“So, if you have digital therapy, and you have robust clinical studies to show that it works, then it gets approved as a medical device. And, if it’s approved and listed as a therapy, then doctors can prescribe it and every health insurer has to reimburse it.

"So last year, we bought the biggest company in that market and we now have 13,000 German doctors that are prescribing our therapies.

“Now our biggest team is in Germany, with the second biggest here in Iceland, but also a very big team in the US. So, the US and Europe are the biggest markets and Iceland is really our R&D hub.

“It’s a fantastic test market for research and development because we have one of the best healthcare systems in the world by quality metrics, it’s really well performing with great health registries. We can trace back diagnoses and we can easily track patients through a unique ID number that everyone has here. So, to do high quality clinical research very efficiently is great.” 

While the uptake of digital therapies has increased since the COVID-19 pandemic, Thorgeirsson predicts that healthcare will see further adoption of digital technologies over the next three to five years. 

“I think the main thing for everyone in our space is understanding how we can help accelerate the adoption of technology. We realise it takes, on average, 17 years for innovation to get to the patient’s bed,” says Thorgeirsson.

“I definitely think within three to five years, it’s going to be mainstream. We are going to look back and think, how were we able to run healthcare without this?”