Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News
Find out which nations GEN’s algorithm ranked the highest.
Europe has shown the world over the past half century how countries with centuries of conflict can finally cast aside their differences and work together. The European Union has created a single currency, a common patent office, a single public funding source for basic research, and a single legislative body for issues reaching across the continent.
But if there’s one area where the countries of Europe continue to compete vigorously—other than in soccer and other sports—it’s in their efforts to attract and build up communities or “clusters” of biotechs, pharmaceutical employers, universities, and independent research institutions.
Europe’s biotech leaders have several strong regions, while smaller nations market their entire country as a hub for life sciences activity. And as in the U.S., there’s no central clearinghouse for statistical information using a single standard. As a result, it is impractical to rank European clusters solely by region. As much as Europe may have moved beyond the nation-state in its thinking, that has yet to be applied uniformly to the gathering of key performance data for biopharma activity.
While bigger bioclusters are most likely to appear on such a list given the criteria, it is a testament to biopharma’s strength and quality across Europe that many up-and-coming yet smaller clusters with respectable accomplishments in recent years could not make this year’s top 10 list.
Norway’s Oslo Cancer Cluster in May 2015 will open an Innovation Park and Incubator that are expected to add to both its membership (now 64 members) and growing pipeline of cancer therapeutics developed through collaborations with global partners. Membership is diverse: 20 pharmas, 17 biotechs, 13 academic/universities and university hospitals, three technology transfer offices, five CRO’s, three investor companies, one patient organization, one governmental facilitator, and one affiliated member.
Another example: Russia has elevated its venture capital presence over the past decade from near nothing to $13 million in 2013, according to a report released February 25 by The PwC Centre for Technology and Innovation and Russian Venture Company, a government-operated fund of venture capital funds. Five years after Russian leader Vladimir Putin promised to transform his nation into a biotech heavyweight by 2020, the federation has attracted significant international investment: Bayer announced plans in September to add 800 jobs there over four years, to name just one such announcement.
Buoyed by one of the lowest corporate tax rates in Europe, Ireland has been more than welcoming to biopharmas, starting a generation ago when it served merely as an overseas outpost for multinational pharma giants based in the U.S. and continental Europe. In recent years a wave of U.S. and other companies have redomiciled in the emerald republic after acquiring homegrown Irish biopharmas such as Warner Chilcott, Elan, and, most recently, Vidara. Ireland places seventh in biopharma jobs (21,000) and ninth in number of companies (120), but showed strength last year in venture capital (seventh at $63.25 million), paced by the nearly $48 million won by Opsona Therapeutics.
Homegrown multinational pharmas Astra (now AstraZeneca) and Pharmacia (acquired by Pfizer) may not have their headquarters in Sweden any more, but the successor companies remain among pillars of a biotech cluster almost as old as the industry itself. Two years after Genentech’s 1976 founding, its technology was licensed by Kabi, a homegrown biotech later absorbed by Pharmacia. Sweden also enjoys a research base that can boast of the Karolinska Institute and Lund, Uppsala, and Göteborg Universities. Uppsala U. has joined GlaxoSmithKline in leading a 32-partner consortium that will develop new antibiotics against Gram-negative pathogens. Academic spinouts account for the seventh spot in EU-funded research (293 grants) and venture capital (about $40 million in 2012), while 2012–13 biopharma patent activity stood at ninth (105), and the startups are expected to grow employment over time from the current approximately 13,000 jobs (ninth).
Denmark’s rich history in agriculture spawned a research industry that has grown into a full-fledged biopharma cluster, anchored by one of the world’s largest biotechs, diabetes product giant Novo Nordisk, which plans to open a $100 million purification plant in Bagsværd, as well as drug developer H. Lundbeck, which in December expanded a CNS drug collaboration with Japan’s Otsuka Pharmaceutical. Enzymes and cancer therapies are also strengths of Denmark, as is the Medicon Valley consisting of Greater Copenhagen and Sweden’s Scania region, home to more than 100 biotechs. Denmark’s 47,000 biotech jobs place it fifth in Europe, but the country ranked lower in 2012–13 patents (seventh at 180), number of companies (eighth at 160), and EU research funding (ninth at 205 grants).
Belgium’s biotechnology companies and research institutes are mainly concentrated in Ghent (BioTech Valley), Leuven, Mechelen, and Walloon Brabant (South East of Brussels). Biopark Charleroi Brussels South in Gosselies draws more than 800 employees to sites that include academic research institutes, technological platforms, businesses, groups that promote research, and a biotech training center. The country’s consistency in European rankings include jobs (sixth at 25,000) at employers ranging from homegrown UCB to startups, as well as venture capital (sixth at $50 million in 2012), followed by EU research funding (seventh at 363 grants), companies (seventh at 200), and 2012–13 patents (eighth at 148).
With tools giant Qiagen, CRO Quintiles, and Royal DSM, a science giant expanding beyond drug development to contract manufacturing and development (through its new joint venture with JLL Partners, DPx), the Netherlands has one of the more diverse biopharma sectors in Europe Academic research is among strengths, propelling the country to fourth in EU funding (649 grants), and fifth in patents (240), though its number of companies (sixth at 398) and jobs (eighth at just over 19,000) showed both progress, but also a continuing challenge in commercializing research.
The country has leveraged its legacy chemical and pharmaceutical businesses, especially in areas near Milan, to build a new generation of biotech. It’s probably not surprising that biopharma is strongest in the country’s north, especially in Lombardy (31% of Italian companies based there) given its universities and tradition of entrepreneurship, as well as a regional government that has long supported biotech growth. The schools help explain Italy’s fifth-place ranking on EU research funding (479 grants) and 2012–13 patents (sixth at 193). Another of Italy’s strengths is its ability to create and retain companies; the country ranks fifth with 407 companies, 256 of them core biotechs, the third-highest number of core biotechs after Germany and the U.K.
Legacy pharma giants Novartis and Roche, which still have their headquarters here, have drawn a new generation of biotechs to Switzerland, notably in Zurich and nearby Basel. The combination of corporate R&D and university research has kept the country third in 2012–13 patents (409), while its financial sector has invested enough venture capital to place second in Europe ($211.6 million). The numbers of companies (500) and jobs (55,900) are both ranked fourth, reflecting a slower pace of startup activity than biopharma’s leaders, and possibly some fallout from the layoff wave that is reshaping pharma.
Anchored by the Ile de Cite region that includes Paris and accounts for one-third of its life-sciences activity, France has developed a biotech community alongside legacy pharma giant, Sanofi, and smaller but also multinational Ipsen. France’s biggest strengths were in 2012–13 patents (second at 451) and jobs (second at 103,600), where it was surpassed in both only by Germany. Part of the large job number reflects the success of French unions in staving off job-cutting efforts; last year Sanofi ended up eliminating only a net 207 of 900 planned layoffs nationwide announced in 2012. France finished third, however, in EU research funding (1,028 grants) and number of companies (869), while placing fourth in venture capital (about $184 million).
#2. United Kingdom
The U.K. is a world model for well-coordinated clusters that marry a region’s academic giants and research institutes with spinouts and legacy pharmas like GlaxoSmithKline and AstraZeneca. Two such clusters are the triangle formed by London, Cambridge, and Oxford and sometimes known as “East of England.” Another world-class U.K. cluster joins Edinburgh, Scotland, institutions and companies focused on stem cell research (capitalizing on since-lifted restrictions in the U.S.) and, more recently, industrial biotech. The kingdom’s universities propelled it to the top among European countries in EU research funding (1,570 grants), and its strong financial industry explains its strong third-place showing in VC funding ($207 million) behind Switzerland (not by much) and leader Germany, and number of companies (910), finishing behind only Germany. Perhaps because many of the new companies are early-stage, the U.K. placed third in jobs (101,000) and fourth in 2012–13 patents (393).
With two powerhouse regions in North-Rhine Westphalia (NRW) and Bavaria, Germany leads Europe in biopharma activity by several measures, including jobs (133,000), companies (1,218), 2012–13 patents (942), and venture capital (about $312.5 million in 2013). VC activity benefited from a rebounding market and some big deals, notably the $116 million award to Morphosys. About half of Germany’s companies are in the country’s two strongest clusters: North-Rhine Westphalia (380 companies, including 84 “core” biotechs dedicated exclusively to the industry) and Bavaria (348 companies, including 140 exclusively in “biopharmaceutical development and technology platforms”).
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 companies—Combines figures from the report Site selection for Life Sciences Companies: European Life Sciences Cluster, 2013 Report, issued by KPMG in association with Venture Valuation; 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, though they were factored in when deciding the ultimate position of a region.