Biotech vs. Medtech: Verstehen Sie die Unterschiede für Ihr Schweizer Portfolio

Switzerland is famous for its life sciences industry. This sector brings in over CHF 24 billion every year. However, this money comes from two very different types of companies. One path is biotech. These companies create new drugs. The other path is medtech. These firms build medical devices.

For investors in Zurich, Geneva, and Basel, these two sectors follow different rules. A biotech company might spend 15 years and CHF 200 million before it sells a single product. A medtech startup could start selling devices in just three years with CHF 20 million. The risks are different also. Even the locations vary. Basel is the center for biotech. Zurich leads in medtech tools.

You need to know these differences before you invest. This choice changes how long you wait for profits and how much risk you take.

What Are Biotech and Medtech?

Biotech companies make medicines. This group includes pills, antibodies, and gene therapies. These are treatments that go inside a patient’s body. The main goal is to prove a new drug is safe and works well. This process happens through clinical trials with humans.

Medtech companies build tools and machines. This group includes surgical tools, implants, tests, and digital health apps. These products are hardware or software. They help doctors find diseases or treat patients using mechanics instead of chemistry.

The Swiss market shows this split clearly. About 1’000 companies work in biotech. They make CHF 6.7 billion in revenue. Around 1’400 medtech companies employ 63’000 people. They produce CHF 18 billion each year. Switzerland holds about 5% of the world’s medtech market.

For investors, this size difference is a sign. Medtech is a more mature market with more sales. Biotech focuses more on high-risk development of new cures.

Time to Market: Years vs. Months

Getting a drug approved takes a long time. A biotech company starts with tests on animals. This phase takes three to six years. Then, they start Phase I trials to test safety in humans. This step lasts one to two years. Phase II trials test if the drug works on 100 to 300 patients. This phase takes two to three years. Phase III trials check the results in large groups of 300 to 3’000 patients. This part lasts three to four years. Finally, the government reviews the drug for another year or two.

The total timeline is 10 to 15 years.

The success rate is low. Only about 7% to 11% of drugs that start trials ever get approved. Most fail during Phase II because they do not work well enough. Cancer drugs have even lower success rates.

Medical devices follow a faster path. Swissmedic sorts devices by risk. Simple items like bandages (Class I) take weeks to approve. Medium risk items like insulin pumps (Class IIa) take 3 to 6 months. High risk items like heart valves (Class III) take 12 to 18 months.

The total timeline for a standard device is two to four years.

The cost matches the time. Making a new drug costs between USD 1.3 billion and USD 2.6 billion. A high-risk medical device costs USD 50 million to USD 100 million. A standard device costs even less, often between USD 10 million and USD 50 million.

Money Needed to Reach Profit

A biotech startup spends money for a decade before it earns anything. It needs CHF 10 million to CHF 30 million just to start. Later trials cost CHF 50 million to CHF 150 million. The company might profit in 12 to 18 years.

Medtech companies can sell products much sooner. A company can build and test a prototype in about two years. The first sales often happen between years two and four.

This gap matters for your portfolio. Biotech wraps up your money for a long time. Medtech offers faster results.

Comparing the Risks

Biotech risk is “binary.” This term means it is all or nothing. A drug either works in trials or it doesn’t. If a drug fails a late trial, the company might lose 90% of its value overnight. About 40% to 50% of biotech investments are total losses. However, a single big win can pay for many losses.

Medtech risk is “iterative.” This concept means companies can improve their product. If the first version of a device is not perfect, the company can build a better second version. They use customer feedback to fix problems. Total losses in medtech are around 30% to 40%. The odds are slightly better because companies can correct their mistakes.

Medtech faces a different challenge called reimbursement. Just because a device is approved does not mean insurance will pay for it. About 30% to 40% of new devices struggle to get insurance coverage in the first two years.

How Companies Exit

Most companies in both sectors get bought by larger companies. They rarely sell shares to the public on the stock market right away. Big pharma companies like Roche and Novartis often buy biotech startups. Roche and Novartis are based in Basel.

Medtech companies in Zurich often sell to international device leaders. For example, a company called Distalmotion sold for CHF 180 million in 2023.

Biotech investors might wait 10 to 15 years for an exit. Medtech investors usually see an exit in 7 to 12 years.

Basel vs. Zurich

The Basel region is home to over 700 life sciences companies. Most are biotech or pharma. The presence of Roche and Novartis creates a deep pool of talent. Scientists often leave these big companies to start new ones. Basel is the place for drug development.

Zurich has about 350 medtech companies. This area relies on engineering talent from ETH Zurich. The focus here is on robotics, digital health, and tools. Zurich is the hub for medical devices and software.

How to Build Your Portfolio

Experts suggest holding 15 to 20 biotech stocks to be safe. This strategy protects you if many fail. For medtech, you might only need 10 to 15 companies because the risk is lower.

Conservative life sciences investors might put 20% to 30% of their money in biotech and the rest in medtech. This mix focuses on shorter timelines. Investors who can wait longer might put 60% to 70% in biotech.

You should also check the company’s progress. A biotech company with Phase II data is safer than a brand new one. A medtech company with sales is safer than one with just a prototype.

What to Look For

When you check a biotech company, ask for clinical data. You want to see safety results. You should also check if they own their ideas (intellectual property). Be careful if they claim “revolutionary” science but have no proof from experts.

When you check a medtech company, look for approvals. Ask if insurance companies are paying for the device. Make sure they have a factory or partner ready to build the product. Avoid companies that have no real orders from customers.

Der Schweizer Vorteil

Switzerland ranks number one in the world for innovation. The country produces many patents for life sciences. Swissmedic is a respected regulator. Approvals here help companies sell in other countries.

Because the Swiss market is relatively small, companies must sell globally right away. This need means Swiss startups are built for international growth from day one.

Making Your Choice

Biotech and medtech are different paths. Biotech is for investors who can wait 10 to 15 years. You must be able to tolerate the risk that a drug might fail completely. Medtech is for investors who want sales within five years. You face risks involving design and insurance coverage.

You do not have to choose just one. Many investors own both. Platforms like CapiWell help Swiss investors handle these choices. CapiWell allows you to balance higher-risk bets with steady alternative investments through a multi-asset approach. This strategy helps you manage risk while you look for growth in both biotech and medtech.