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May 16, 2016

Top 10 European Biopharma Clusters

Which Countries Are the Continent’s Biggest Magnets for Academia and Industry?

Top 10 European Biopharma Clusters

Europe is looking to cloud computing to enhance the continent’s already significant presence of academic and industry powerhouses in biopharma. [© aberenyi/Fotolia]

  • Europe already has many of the ingredients for successful biotech and pharma activity—top-tier academic research, a commitment to public research funding, a heritage of pharmaceutical giants stretching back to 1668 (when Merck was founded in Darmstadt, Germany), and a growing number of biotechs nurtured by regional biotech clusters (especially in Germany and France).

    Now, the continent is about to develop a new and costly asset in hopes of expanding the biopharma industry further. On April 19, the European Commission announced plans for the European Open Science Cloud (EOSC), a virtual environment to store, share, and re-use data across disciplines and borders to benefit Europe’s 1.7 million researchers and 70 million science and technology professionals.

    The EOSC won’t be cheap. It will need $7.6 billion in funding, with $2.3 billion coming from the European Commission, the rest from anticipated additional public and private spending. Supporting the EOSC will be the European Data Infrastructure (EUDAT), consisting of high-bandwidth networks, data storage facilities, and super-computer capacity. The EOSC and EUDAT initiatives are actions toward the European Commission’s broader goal of a $57 billion public-private “digital single market” aimed at improving competitiveness and cohesion through data-driven innovation.

    Among entities applauding the European Commission’s digital initiatives is the European Federation of Pharmaceutical Industries and Associations (EFPIA). “We stand on the brink of a technological revolution that will fundamentally alter the way we address new healthcare solutions,” EFPIA director general Richard Bergström said in a statement. “The use of new technologies will contribute to significantly improving the management of acute and chronic diseases.”

    The EOSC and EUDAT initiatives are emblematic of Europe’s commitment to biopharma, a commitment that strengthens Europe’s leading biopharma clusters, which are listed here, in GEN’s 2016 edition of its Annual European Cluster Ranking. As with U.S. regions spotlighted recently, European nations benefited from increases in venture capital and public research funding, but also saw significant jumps in patents granted. Year-to-year trends in jobs and companies are harder to discern since many of those figures come from nations that update their figures less than annually.

    This year’s European Cluster Ranking includes one nation ranked for the first time (Spain), and several nations that narrowly missed Top 10 inclusion this year, but finished Top 10 in at least one criterion and would merit inclusion among the Top 15 nurturers of biopharma. These include Ireland (which made GEN’s 2015 Top 10 List and was #7 in venture capital this year), Austria (#7 in number of companies), Finland (#9 in venture capital), and Norway (#9 in companies).

  • #10. Sweden

    Sweden’s strengths include venture capital, where it ranked highest (sixth with $95.6 million, according to Invest Europe), followed by research funding (1,006 grants). The country enjoys a strong research base that includes the Karolinska Institute as well as Lund, Uppsala, and Göteborg Universities. And while Sweden may still be known for legacy pharmas such as Astra (now AstraZeneca) and Pharmacia, acquired by Pfizer in 2003, the country’s biotechs have also been busy. Last month, Stockholm-based Cormorant Pharmaceuticals, located at Karolinska Institute Science Park, launched a collaboration with the Wistar Institute to co-develop the Swedish company’s cancer immunotherapy HuMax-IL-8. Sweden ranks 10th in patents (59 granted and 111 applications), 12th in companies (136 pure biotechs), and 13th in jobs (11,500 according to industry group LIF). 

  • #9. Belgium

    Belgium’s highest scores are its eighth-place showings on three of the five measures on this list: patents (99 granted and 240 applications), jobs (33,701 in 2013, according to EFPIA numbers released last year), and research funding (993 grants). The country finishes outside the Top 10 in number of companies (11th with “over 140” companies according to the Chancellery of the Prime Minister) and venture capital (12th with $26.4 million in 2014, according to Invest Europe).

    Among biopharmas planning to grow in Belgium is Sanofi, which has disclosed plans for a $340 million expansion of its biologics site within the Flanders region in Geel. The facility will add 86,000 square feet of space and expand its existing production capabilities to support the pharma giant’s pipeline of monoclonal antibodies. Another biopharma giant, AbbVie, made news in recent weeks with two Belgian partners. Over the past month, the company inked an up-to-$685 million collaboration with argenx—based in Ghent as well as the Netherlands—to co-develop its cancer immunotherapy ARGX-115. AbbVie also agreed to nearly double its potential milestone payments to Mechelen-based Galapagos to $600 million under a 2-year-old cystic fibrosis collaboration.

  • #8. Spain

    Spain recorded the third-highest number of biopharma companies (554 pure biotechs out of 2,831 engaged in the industry, according to industry group ASEBIO), and placed sixth in research funding (1,649 grants). But the country was ninth in patents (52 granted and 225 applications), as well as in jobs (29,621 in 2013, according to EFPIA numbers released last year). Spain finished 13th in venture capital with $17.9 million according to Invest Europe, though that figure still places the country well ahead of one top-five country on this list, Italy. On a more positive funding note, Spain is home to Europe’s first equity crowdfunding platform for biotech startups. Barcelona-based Capital Cell in February successfully closed a self-fundraising round that raised $142,000, and is working to raise a $5.7 million round in the U.K.

  • #7. Denmark

    Denmark scores highest on jobs (fifth with 40,000 as of this year, according to the Ministry of Foreign Affairs), and ranks seventh in patents (98 granted and 335 applications) and venture capital ($77.5 million in a 2014 Ernst & Young study). The country scores 9th in research funding and 10th in companies (“more than 160,” according to the Ministry of Foreign Affairs). While Denmark has the same number of grants as Switzerland (803), the Danish kingdom has more grants under the European Union’s current Horizon 2020 funding program (230) than the Swiss Confederation (209).

    Last month, Denmark signaled its intent to expand in biopharma through partnerships with U.S. companies and investors. NASDAQ’s opening bell on April 13 was rung not by a CEO, but by Denmark’s consul general in New York, Ambassador Anne Dorte Riggelsen, who was hosting a delegation of Danish biotech companies, and her senior life science advisor, Megan Dow, Ph.D.

    The country’s largest biotechs include Novo Nordisk and Bavarian Nordic, the latter recently canceling a planned IPO in response to the chilly market of recent months, opting instead for a $100 million private placement. Another anchor of biotech in Denmark is the Medicon Valley consisting of Greater Copenhagen and Sweden’s Scania region, where more than 200 companies have a presence. Søren Bregenholt, chairman of the Valley’s membership organization Medicon Valley Alliance, recently urged Denmark to name a minister for life sciences to ensure continued industry success.

  • #6. Switzerland

    Switzerland biopharma stakeholders set a few records at the recent Swiss Biotech Day event, including attendance (more than 450) and partnering meetings (420). The stakeholders had much to celebrate. Switzerland’s venture capital total last year was Europe’s second highest at $319.5 million in 2015, while the country also finished strongly in patents (third with 226 granted and 762 applications).

    Switzerland didn’t fare as well on the other three criteria, ranking 8th in companies (279 according to Swiss Biotech), 10th in research funding (803 grants, same overall number but fewer Horizon 2020 awards than Denmark), and 12th in jobs (14,890 according to Swiss Biotech). However, the job number set another record, since a dip in private-industry employment (to 7,184 from 7,276) was more than made up by a nearly 500-person jump in jobs at publicly traded companies.

    One Swiss public biotech, Allschwil-based Actelion, is denying speculation that it is being courted for a takeover by Sanofi and Johnson & Johnson. Swiss Biotech Association President Dominick Escher is warning, however, that startup activity in Zurich may be dampened unless a new tax law is amended to lessen its burden on shareholders and option holders, according to European Biotechnology News.

  • #5. Italy

    Italy scores high in jobs (fourth with 63,000 in 2014, according to Farmindustria) and nearly as high in number of businesses (fifth with 251 pure biotechs among 384 companies as of 2014, according to Assobiotec, a biotech industry group) and research funding (also fifth with 1,677 grants). Italy is also sixth in patents (117 granted and 248 applications).

    The nation’s weakness remains venture capital (only $8.7 million in 2014, according to Assobiotec data published last year). That should start to change in coming years. During 2015, Fondazione Enpam, the Italian pension plan for doctors and dentists, launched a $171 million fund for life sciences and biotech startups, while Invitalia Ventures, owned by the Italian Ministry of Economy, created a $57 million venture capital fund of its own, also with startup investment in mind. More good news for startups emerged last November, when Italy’s first biotech accelerator was opened in Milan by BiovelocITA, with $6.8 million from Soffinova Partners and an investor group led by BANOR SIM.

  • #4. The Netherlands

    The Netherlands’ highest showings are its fourth-place rankings in both patents (140 granted and 773 applications) and research funding (1,745 grants). Holland also places fifth in venture capital (nearly $106 million in 2014 according to Invest Europe) and sixth in both companies (360 as of February, according to Invest in Holland) and jobs (35,000 according to Holland BIO).

    Last year, three Dutch biotechs were acquired by biopharma giants—the biggest deal being Amgen’s approximately up-to-$1.6 acquisition of Naarden-based Dezima Pharma. Also potentially exceeding $1 billion is Bristol-Myers Squibb’s collaboration with Amsterdam-based UniQure to develop gene therapies for cardiovascular disease targets. The country moved to strengthen workforce skills earlier this year, when Minister of Economic Affairs Henk Kamp led dignitaries in opening the Biotech Training Facility at Leiden Bio Science Park, a 21,500-square-foot facility offering instruction in GMP and biosafety up to level 2.

  • #3. France

    France’s system of government may be known as the Fifth Republic, but the nation is a solid third in biopharma thanks to legacy pharmas, a growing number of up-and-coming biotechs, and a strong system of seven regional “innovation” clusters focused on biopharma. France finished second in patents (301 granted and 888 applications) and third in research funding (2,530 grants) and jobs. The nation finished last year with biopharma employment of 99,453, according to industry group France-Biotech—which notes that 2015 was the first year in a decade in which the number dipped below 100,000.

    France ranked only a slightly-lower fourth in both companies (495) and venture capital (about $260 million last year). France’s government last year launched a biotech investment fund, the Fonds Accélération Biotech Santé, with about $114 million—then tripled the amount to $388 million in January, to the satisfaction of industry leaders who deemed the original fund too small.

  • #2. United Kingdom

    As the U.K. approaches a June referendum on staying in the European Union or exiting, five top cancer researchers have coalesced with the government, writing in The Lancet that a “Brexit” would hurt biopharma and the rest of the life sciences industry. There’s no debating, however, that the U.K. has built considerable strengths both in academic research and business development.

    The kingdom is number one in European Union-funded research (3,768 grants) and is also on top in venture capital ($593 million in 2014, according to Ernst & Young) and number of biopharma companies (1,948). The U.K. reports Europe’s second-largest number of biopharma jobs with 107,000 of a total approximately 222,000 life sciences jobs—a category that includes medical devices and other “medical technology” specialties, according to the government’s latest annual industry report, “Strength and Opportunity,” last updated on May 8 by the U.K. Office for Life Sciences and UK Trade & Investment. The U.K. ranked lowest in patents (fifth with 176 granted and 364 applications).

  • #1. Germany

    Germany remains on top this year thanks to its longtime parallel strengths in research and industry. The Federal Republic outranked the rest of Europe in biopharma patents (507 granted and 1,183 applications in 2015) and in jobs, though employment numbers vary widely. The government ministry German Trade and Investment records 156,000 pharma and biotech jobs, while EFPIA recorded 110,036 jobs. Both sources ranked Germany on top, but based on 2013 numbers still quoted over the past year.

    The nation finished a strong second in research (2,716 grants awarded) and companies (1,305), but was third in venture capital with approximately $300 million in 2015, according to Bio Deutschland. With strong competition across the continent, especially from the U.K., Germany in 2014 unveiled its “New High Tech Strategy” to keep biopharma and other tech sectors on the cutting edge of innovation.

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