Europe Is Home to Numerous Regional Communities.
Find Out How They Rank on This GEN List
The FDA’s approval March 6 of the first biosimilar drug for U.S. use helped shine a spotlight on European biotechnology, and not just because the biosimilar in question—Zarxio™, a variation of Amgen’s Neupogen (filgrastem)—will be marketed by the Sandoz unit of Swiss-based Novartis. As of March 10, Europe has 19 biosimilars authorized for patient use since 2006 (including Zarxio, which was approved as Zarzio in 2009).
Yet there’s much more to biotechnology in Europe than biosimilars. The continent, like the U.S., is home to numerous regional communities or “clusters” of biotechs, pharmaceutical employers, universities, and independent research institutions. As GEN remarked last year, Europe’s biotech leaders enjoy more than one strong region, while smaller nations market their entire country as a hub for life sciences activities. Thus, unlike the U.S., European clusters cannot practically be ranked solely by region.
And as in the U.S., there’s no central clearinghouse for statistical information using a single standard. So a list of European clusters is likely to include numerous larger bioclusters, though a few smaller clusters are notable enough to deserve mention: Norway’s Oslo Cancer Cluster, for example, is home to 66 biotech, pharma, and life sciences employers. That number is expected to increase once the cluster’s Innovation Park opens on August 24. The park will integrate the Oslo Cancer Cluster Incubator, Ullern High School, The Norwegian Cancer Registry, the Pathology unit, and bioinformatics unit at Oslo University Hospital and several biopharma businesses, from startups to bigger companies.
What Ireland appears to lack in patents (14th with six) and EU research funding (13th with 86 grants), the country more than makes up for in venture capital (seventh at $103.232 million in 2013) and number of companies (seventh with 120). “Close to 50,000” are employed in biopharma (IDA Ireland). Yet when it comes to biotech in Ireland, perhaps the best known number is 12.5%—one of the lowest corporate tax rates in the Western world, and no small reason why the Emerald Isle has proven attractive to biopharmas from the U.S. and continental Europe. Under criticism from the U.S. and other nations, Ireland agreed to phase out by 2020 the “Double Irish” practice that has long allowed multinational companies to cut their tax bills legally. Yet Ireland continues to attract jobs from biopharmas based in and outside the country; last month Horizon Pharma opened its new Dublin HQ, with plans to add 60 jobs over three years, while Bristol-Myers Squibb in November said it would build a new biologics manufacturing facility in Cruiserath, County Dublin, designed to support up to 400 manufacturing jobs.
#9 – Sweden
Sweden’s strengths include its number of pure biotechs (136 of some 1,500 companies) and EU research funding (211 grants). More than 30,000 employees work in the industry (SwedenBIO). But the country dips to ninth in 2014 patents (30) and places only 13th in venture capital ($16.230 million in 2013). That’s not to say Swedish companies aren’t finding money; Göteborg-based Cortendo last month completed a $26 million private placement, growing to $37 million the amount of financing raised by the developer of treatments for orphan endocrine disorders since October. And Stockholm-based NeuroVive raised its presence in Asia by establishing a subsidiary that collected $3.255 million from Taiwanese investors, ahead of a planned initial public offering in Taiwan. Sweden’s life-sci strengths remain its heritage of pharmas such as Astra (now AstraZeneca) and Pharmacia (acquired by Pfizer)—and a present-day research base that includes the Karolinska Institute as well as Lund, Uppsala, and Göteborg Universities. Karolinska and Lund joined a home-grown company, Newron Sweden, last month in reporting that a growth factor applied to the brains of a 12 patients resulted in increased signaling of dopamine—a discovery that researchers hope can someday aid in the development of a treatment for Parkinson's disease.
Denmark places fifth in venture capital ($135.492 million in 2013), sixth in patents (67), and 10th in both EU research funding (151 grants) and number of core biotechs (88). The industry employs 40,000, according to the Ministry of Foreign Affairs. Yet the country’s drug developers have been generating no small share of attention; Kvistgaard-based Bavarian Nordic earlier this month licensed its Phase III Prostvac® prostate cancer vaccine to Bristol-Myers Squibb for up to $975 million. Prostvac is indicated for asymptomatic or minimally symptomatic metastatic castration-resistant prostate cancer (mCRPC). And on March 7, Novo Nordisk presented positive Phase IIIa data at The Endocrine Society's 97th Annual Meeting for its Saxenda® (liraglutide [rDNA origin] injection) treatment, which won FDA approval in December. A rich history in agriculture spawned a research industry that has grown into a full-fledged biopharma cluster, anchored in part by the more than 100 companies within the Medicon Valley consisting of Greater Copenhagen and Sweden’s Scania region.
Belgium is perhaps Europe’s most consistent biotech sector, placing seventh in EU research funding (228 grants), 2014 patents (45), and number of companies (more than 140), but faring worse in venture capital (ninth at $61.294 million). More than 30,000 people worked in the industry as of 2013 (Embassy and Consulates of Belgium in the U.S.). Biopharmas are concentrated in a few regions—from Leuven, Mechelen, and Walloon Brabant (South East of Brussels), to Ghent, where home-grown ActoGeniX agreed last month to be acquired by Intrexon for $60 million, in a deal that will combine the companies’ technologies to create new oral biologic drugs. Expansion works both ways with Belgian biotechs. Earlier this month, Cardio3 BioSciences based in Mont-Saint-Guibert, Walloon Brabant, selected as the site of its first U.S. facility Rochester, MN—home to the Mayo Clinic, which holds a 3% stake in the Cardio3 BioSciences, and licenses its intellectual property to the company.
Italy fared best in core biotechs (fourth with 264 of a total 422 biotechs) and EU research funding (fifth with 322 grants), but lagged somewhat on 2014 patents (eighth with 31) and lagged especially on venture capital (a mere 12th with $25.808 million in 2013). The industry had 6,626 R&D employees in 2013, trade group Assobiotec Federchimica and the Italian Trade Agency with Farmindustria reported last year. The country has built a new generation of biotechs by leveraging its heritage chemical and pharmaceutical businesses, especially near Milan. But least one U.S. biotech has taken notice of Italy’s research: Biogen Idec agreed in January to develop gene therapies for hemophilia A and B with the San Raffaele-Telethon Institute for Gene Therapy (TIGET), a joint venture of Italy’s Fondazione Telethon and Ospedale San Raffaele.
Switzerland’s combination of corporate R&D, university research, and a strong financial sector helps explain its numbers: The country finished third in 2014 patents (94) and venture capital ($172.591 million in 2013), but placed sixth in core biotechs (146) and ninth in EU research funding (165 grants). Swiss Biotech counted 14,131 employees in 2013. The numbers also reflect the presence of a new generation of biotechs emerging from the lengthy shadows of heritage pharma giants Novartis and Roche, both of which are still headquartered within the Swiss Confederation. For example, the €30 million ($33 million) biotech startup support program launched by Merck Serono when it closed its Geneva R&D hub has its first success, with Prexton Therapeutics last month closing on an €8.7 million ($9.4 million) Series A financing round toward developing new small molecules targeting the metabotropic Glutamate Receptor 4 (mGluR4) through Phase I trials. Sunstone Capital and Ysios Capital co-led the round, with MS Ventures participating.
The Netherlands ranked highest in EU research funding (fourth with 328 grants), and was middle-of-the-list in both 2014 patents (76) and number of core biotechs (114), dipping only slightly in venture capital (sixth with $148.396 million in 2013). The country’s biotech sector employed nearly 35,000 in 2013 (Commission on Genetic Modification or COGEM), and remains among the more diverse in Europe, with tools giant Qiagen, contract research organization Quintiles, and Royal DSM, a drug developer that expanded into contract manufacturing and development (through its DPx joint venture with JLL Partners). Yet a Dutch biotech, Lead Pharma, garnered attention last month by launching a partnership with Sanofi to develop and commercialize small molecule therapies for a broad range of autoimmune disorders by targeting the nuclear receptors known as retinoic acid receptor-related orphan receptor gamma (RORγt).
France has made some impressive strides in biotech the past few years, climbing to second in both 2014 patents (124) and venture capital ($188.721 million in 2013), and to third in both EU research funding (438) and core biotechs (224 according to EY; 255 according to France Biotech). Industry employment last year stood at 110,006 (European Federation of Pharmaceutical Industries and Associations or EFPIA) Yet in December, France Biotech cited several obstacles to investment in the smallest startups—from “excessive paperwork and administrative tasks when dealing with multiples layers of academic institutions” to delays in review of applications for the CIR or Research Tax Credit, to the need for more understanding of industry needs by regulators. The most closely watched drug developer is heritage pharma Sanofi, whose new CEO Olivier Brandicourt, M.D., comes from France—unlike predecessor Christopher Viehbacher, whose move from Paris to Boston and pursuit of job cuts in the Republic contributed to his ouster by the board. Dr. Brandicourt will begin work on April 2. The Ile de France region that includes Paris remains the center of France’s life sciences activity, followed by Rhône-Alpes.
The U.K.’s world-renowned universities and their biotech spinouts keep the kingdom first in EU research funding (516 grants) and in venture capital ($446.801 million in 2013), while finishing second in number of core biotechs (309 by EY, among 4,980 companies identified by the government in 2013) and fourth in 2014 patents (87). A total 175,761 people worked in the industry as of 2013 (UK government), though the figure includes 76,723 “medical technology” staffers in a category broad enough to include in vitro diagnostics and wound care. Like Germany, the U.K. benefits from two powerhouse clusters—the triangle formed by London, Cambridge, and Oxford and sometimes known as “East of England;” and Edinburgh, Scotland, institutions and companies focused on stem cell research (capitalizing on since-lifted restrictions in the U.S.) and industrial biotech. The U.K. also benefits from ambitious public-private efforts; in July 2014, the government joined Illumina and The Wellcome Trust in committing £311 million ($470 million) to map 100,000 human genomes by 2017–and thus catapult the kingdom to global leadership in genetic research into cancer and rare diseases.
Germany leads Europe in biopharma activity by 2014 patents (267) and number of “core” biotechs dedicated exclusively to the industry (428), while placing second to the U.K. in public funding, thanks to the presence of two dynamic regional clusters, North-Rhine Westphalia (NRW) and Bavaria. VC activity lags behind other Euro-giants (fourth at $169.365 million in 2013), in large part because of Germany’s unfavorable tax environment for investments. Industry employment was reported last year at 110,006 (EFPIA). About half of Germany’s companies are in the country’s two strongest clusters: North-Rhine Westphalia (more than 400, including 87 core biotechs and another 15 “additionally biotech active” companies, mostly global giants such as Bayer) and Bavaria (333 companies, including 160 to 170 core biotechs).
Following is GEN’s European cluster ranking effort, starting with details of how the criteria were applied:
- Public research funding—Figures taken from the publicly available European Union Community Research and Development Information Service (CORDIS) website of grants issued through Federal Programs 5, 6, and 7 under the subject “biotechnology.”
- Venture Capital (VC) funding—Combines figures from the publicly released 2013 edition of Ernst & Young’s annual report Beyond Biotechnology, with more recent figures furnished by the countries themselves, either on their own websites, in publicly available reports or public announcements, or as responses to email queries from GEN.
- Patents—Based on the number of “biotechnology” and “pharmaceutical” patents issued in 2012 and 2013 to awardees from countries in Europe, as furnished by the publicly available European Patent Office database of granted patents per field of technology and per country of residence for each individual year from 2004 until 2013.
- Number of “pure” biotech companies—Combines figures from Beyond Biotechnology with more recent figures furnished by some of the countries themselves, either on their own websites, in publicly available reports or public announcements, or as responses to email queries from GEN.
- Jobs—Based on various sources from industry groups, regional life sciences campuses, public and/or private economic development groups, and press articles when written by or directly attributed to an industry source. Because of differences in criteria such as inclusion of medical device or hospital patient-care positions, GEN found widespread discrepancies in job figures, including among several of the top-ranked regions. For this reason, job numbers are not ranked themselves.
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