Top 10 European Biopharma Clusters

As Brexit Casts Uncertain Shadow, Continent’s Industry Continues Growth Trajectory

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Despite Brexit-stoked fears that Europe’s biopharma industry is less attractive to investors than those of the U.S. or China

Europe’s biotech industry recently celebrated its growth and progress with more than 120 events taking place across 18 European countries September 24­–30, in what organizers call “European Biotech Week.”

But during a roundtable discussion held in Brussels, the planned discussion topic, biotech’s contribution toward the United Nations’ third Sustainable Development Goal, “Ensure healthy lives and promote well-being for all at all ages,” was overshadowed, according to European news website Euractiv, by worries expressed by stakeholders that the continent’s biopharma industry is less attractive to investors than the world’s largest biopharma industry in the United States, and the fast-growing biopharma industry that has taken shape in China.

One key reason why investor appetite for deals in Europe may have soured is uncertainty over the effects of the U.K.’s pending “Brexit,” or departure from the European Union. The U.K. will join Norway, Russia, and Switzerland in pursuing its own drug development efforts apart from the EU. Other reasons cited ranged from over-concentration of investment in the U.K., Germany, and France—which as in past years are among Europe’s top 10 nations for biopharma—to heavy regulation

This year’s European cluster ranking includes all of the countries that appeared on the 2017 list of top-10 European biopharma clusters, but with several changes, notably within the bottom half of the list. Some countries narrowly missed inclusion this year despite Top-10 rankings in venture capital: Ireland ranked seventh (€80.15 million [$92.1 million]), and Austria, eighth (€69.061 million [$79.4 million]), both according to Invest Europe (formerly known as EVCA; European Private Equity and Venture Capital Association).

The following is GEN’s annual European cluster ranking effort, which ranks nations on these five criteria:

  • Public research funding—Figures taken from the publicly available European Union Community Research and Development Information Service (CORDIS) website of grants issued through Framework Programs 5, 6, and 7 under the subject “biotechnology,” as well as the current Horizon 2020 research funding program.
  • Venture Capital (VC) funding—Combines figures compiled by Invest Europe—with figures furnished by some of the countries themselves, either on their own websites, in publicly available reports, in public announcements, or as responses to email queries from GEN.
  • Patents—Based on the number of “biotechnology” and “pharmaceutical” patents granted to, plus biotech and pharma patent applications made by, 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 during 2017.
  • Number of biotech companies—Combines figures furnished by representatives of the countries themselves, either on their own websites, in publicly available reports or public announcements, in news ports, or as responses to email queries from GEN. Where known, figures reflect companies with an “exclusive” or “pure” focus on biotech.
  • 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. Where possible, medical device or “medical technology” job numbers normally included in “life sciences” employment numbers were excluded, leaving job numbers more closely focused on biotech and pharma.

#10. Denmark

The nation’s largest home-grown drug developer has not been spared from big biopharma’s worldwide job cutting: On September 18, Bagsværd-based Novo Nordisk said it will eliminate 400 R&D jobs in Denmark and China. But the company also plans to create R&D jobs in Copenhagen, where two of four “Transformational Research Units” will be established. Also in Copenhagen, Bothell, WA-based CDMO AGC Biologics plans in November to bring online a Single-Use Bioreactor (SUB) 6Pack™ suite, consisting of six 2000-L production bioreactors and a 2000-L seed train. And in July, Copenhagen-based Genmab inked a potentially $2.8 billion-plus cancer immunotherapy collaboration with Immatics Biotechnologies.

Denmark falls as low as tenth in research funding (1254 grants) and number of biopharma companies (“more than 160” according to Denmark’s Ministry of Foreign Affairs), but fares slightly better in venture capital (ninth with €41.683 million [$47.9 million], according to Invest Europe), and ranks sixth in both biopharma employment (40,000 jobs, according to the foreign affairs ministry) and patents (158 granted and 412 applications in 2017).

#9. Italy

After Milan lost a coin toss to Amsterdam for the London-leaving European Medicines Agency, Italy’s life sciences industry group Assobiotec, part of the Italian chemical industry federation Federchimica, is demanding a concrete commitment to advancing biopharma from Italy’s new populist government led by Giuseppe Conte, which took office in June. Italy “has all the credentials to compete internationally with its competitors, which are not perhaps the United States or China, but other European countries today do better than us in research and innovation,” lamented Assobiotec President Riccardo Palmisano, M.D., who is also CEO of Milan-based cancer therapy developer MolMed, according to Italian news agency Adnkronos.

Italy falls outside the top 10 in two of GEN’s cluster-evaluating criteria, placing eleventh in VC (€16.339 million [$18.8 million], according to Invest Europe) and jobs (close to 13,000, according to the most recent BioInItaly Report 2018, released in April by Assobiotec and ENEA, the Italian National Agency for New Technologies, Energy and Sustainable Economic Development). The nation fares better in patents, where it ranks eighth (140 granted and 225 applications in 2017), and climbs to the middle of the list in research funding (sixth with 2679 grants) and number of biopharma companies (fifth with 571, according to Assobiotec and ENEA).

#8. Sweden

Sweden has a solid research base that includes the Karolinska Institute and Lund, Uppsala, and Göteborg Universities, not to mention an equally solid presence of younger biotechs and a pharma heritage reflected in Astra (now AstraZeneca) and Pfizer-acquired Pharmacia. Yet the nation isn’t resting on its laurels. In February, Sweden created a government Office of Life Sciences tasked with developing a national strategy for the life sciences. In May, Sweden’s R&D funding agency Vinnova committed the nation to expanding in AI for purposes that include “products, services and processes for diagnostics, drugs, and healthcare.” And in August, Sweden’s government partnered with GE Healthcare to open a SEK 145 million (approximately $16 million) innovation center in Uppsala focused on advancing manufacturing capabilities and commercializing new life sciences technologies.

Sweden places sixth in VC (€85.581 million [$98.4 million], according to Invest Europe) and number of companies (with 568, according to the Swedish Life Sciences Database, whose partners include industry group Sweden Bio and SWELife—the government-funded life-sciences strategic innovation program). Sweden ranks seventh in jobs (approximately 42,000 employees as of 2016, according to the Swedish Agency for Growth Policy Analysis). Where the country lags is in research funding (ninth with 1483 grants) and patents (tenth with 86 granted and 159 applications in 2017).

#7. Belgium

Two of Belgium’s largest biotechs have made big news in recent months. Mechelen-based Galapagos last month joined partner Gilead Sciences in reporting strong Phase III results for their JAK1 inhibitor candidate filgotinib in adults with moderately-to-severely active rheumatoid arthritis. In addition to good clinical news, filgotinib has also generated forecasts of blockbuster sales ranging from $4 billion (Berenberg) to $6 billion (Jefferies). And Ghent-based Ablynx was acquired by Sanofi for €3.9 billion (nearly $4.5 billion) in a deal completed June 19. Small companies have also grown in Belgium: Most recently on September 27, Louvain-la-Neuve-based microbiome startup A-Mansia, a co-spin-off of the University of Louvain and Wageningen University, said its Series A financing swelled to €18 million ($20.7 million).

Belgium ranks seventh in research funding (1529 grants), and patents (145 granted and 267 applications in 2017), but climbed to sixth in jobs (46,500, based on figures of 26,500 in Walloon and 20,000 in Flanders cited by regional groups this year), and dipped to eighth in companies (265, according to KPMG). The nation only rises to tenth in VC even though Belgian companies last year raised nearly four times the financing of 2016 (€39.275 million [$45.1 million], according to Invest Europe, which recorded just €10.144 million [$11.7 million] in 2016).

#6. Switzerland

Switzerland has seen many of Basel-headquartered Novartis’ deepest job cuts lately. Last month the company announced plans to eliminate 1500 jobs in Basel as well as Stein, Locarno, and Schweizerhalle, and shift 700 business services positions from Switzerland to service centers overseas. Basel-based Roche warned in September of its own cost reductions as longtime blockbusters gear up for competition from biosimilars. Not all Swiss giants are retrenching: Lonza on September 20 announced a CHF 400 million ($403 million) expansion of its Visp biopark to grow its Ibex™ Solutions business with two new offerings, IbexTM Design and IbexTM Develop, designed for biotechs with preclinical- to commercialization-stage antibody therapies.

Switzerland finished second in VC last year with CHF 443.1 million ($446.4 million), according to the 2018 Swiss Venture Capital Report by Startupticker.ch with SECA (Swiss Private Equity & Corporate Finance Association). Nearly half of that was awarded to a single company, Lausanne-based ADC Therapeutics; the developer of antibody drug conjugates targeting major cancers closed a $200 million private placement in October 2017. Switzerland also ranked high in patents (third with 318 granted and 775 applications in 2017). But the nation placed eighth in research funding (1483 grants), ninth in both companies (237, according to Swiss Biotech Association) and tenth in jobs (14,890 according to Swiss Biotech Association, though KPMG records 20,000).

#5. Spain

Spain’s biopharma industry has expanded and matured over the past decade into a growth-focused cluster that had reason to celebrate its progress at last month’s BIOSPAIN conference: “When we started back in 2007, there were literally no life science investors here. Now, we have a real Spanish biotech community, we have national investors attracting the international ones and we have this event,” Joan Perelló, CEO of calcification disorders drug developer Sanifit, based in Palma with a San Diego subsidiary, told European Biotechnology. Most recently at deadline, investors in and outside Spain, including Roche Venture Fund, partnered on the €21.3 million ($24.52 million) Series B financing completed by Mataró, Barcelona-based rare disease drug developer Minoryx Therapeutics.

Spain places ninth in patents (83 granted and 236 applications in 2017) and eighth in venture capital (€66.89 million [$76.9 million] according to Invest Europe, though ASEBIO listed only €30.39 million [$34.9 million]). However, Spain ranks fifth in employment with a combined 61,314 jobs (38,677 pharma jobs according to EFPIA, and 22,637 biotech jobs according to Spanish Association of Biotech Companies; ASEBIO), but has climbed in recent years to a solid fourth in both number of biopharma companies (651 according to ASEBIO) and research funding (2774 grants).

#4. The Netherlands

The Netherlands is due to welcome the newest anchor for its biopharma cluster by the end of March: the European Medicines Agency, which is set to open its doors in Amsterdam, a relocation from London following the U.K. “Brexit” vote to leave the European Union. “This will be a magnet to Holland and [Belgium’s] Flanders (which already have strong pharma industries) for inward drug company investment and for divestment from the U.K.,” Prof. John Hardy of University College London predicted last year. Yet the Netherlands need not depend on Brexit for growth: VC firm Forbion, based in Naarden as well as Munich, Germany, on October 1 completed an oversubscribed €360 million (about $414 million) fourth life-sci fund. And in May, Nijmegen-based Xenikos, developer of an acute graft-versus-host disease therapy, won a $30 million Series B financing.

The Netherlands ranks highest with its fourth-place showing in biopharma jobs, (65,400 according to the public-private PharmInvestHolland, created to improve the nation’s business climate for biotechs and pharmas). The Netherlands places fifth in grants (2772), patents (178 granted and 497 applications in 2017), and VC (€96.965 million [$111.5 million], according to Invest Europe). The country fared lower in number of companies (seventh with 499 according to the Holland BIO’s Dutch Life Science Database, surpassing the 470 counted by PharmInvestHolland).

#3. France

While France has built upon its heritage of pharmas like Paris-based Sanofi to grow a biopharma industry that is among the top three in Europe, the nation sees opportunity for additional expansion. French President Emmanuel Macron in March announced his country would spend €1.5 billion ($1.7 billion) to become a global leader in AI—where the U.S. and China are now dominant—by building up capabilities and companies focused on “healthcare” as well as the environment, transportation, and defense/security; €100 million (about $115 million) would be invested in startups.

France scores highest in patents, ranking second (388 granted and 960 applications in 2017). The nation is third in research funding (3814 grants), and based on France Biotech numbers is third in companies (870) and venture capital (€315 million [$362.2 million]). France also places third in biopharma employment, with a combined 118,786 jobs—98,786 pharma jobs according to pharma industry group LEEM (Les Enterprises du Medicament), and about 20,000 biotech jobs, according to France Biotech.

#2. Germany

While better known for pharma giants like Bayer and Boehringer Ingelheim, Germany has also strived to grow a top-tier cluster with larger biotechs and smaller enterprises. One of those biotechs, BioNTech, inked an up-to-$425 million collaboration with Pfizer to develop mRNA-based flu vaccines in August. Also that month, Göttingen-based pharma and lab equipment supplier Sartorius’ nonprofit “Life Science Factory” division disclosed plans to open a namesake accelerator space for startups consisting of labs, co-working spaces, and consulting services. The Factory will make available a 500-square-meter (5,382-square-foot) space starting next year, and expand to a 3,000-square-meter (32,292-square-foot) site at the new Sartorius Quarter in 2021.

Germany scores highest in patents (627 granted and 1273 applications as of 2017), as well as in biopharma employment with a total 174,205 jobs (128,545 pharma jobs according to the German Association for the Pharmaceutical Industry [BPI], and 45,660 biotech jobs according to BIOCOM). The nation finished second in research funding (4317 grants), second in companies (1201) and fourth in VC (€236 million [$271.4 million], according to BIO Deutschland).

#1. United Kingdom

The United Kingdom remains Europe’s top biotech cluster–at least for now—despite continuing uncertainty over the future of the kingdom once it completes its “Brexit” separation from the European Union, which has already sent the London-based European Medicines Agency packing its bags for Amsterdam (See The Netherlands, above). The government insists the cluster will survive Brexit and remain number-one: “The U.K. remains a fantastic place for innovation, with broad academic, regulatory, and clinical expertise which works at a national and global level and that won’t go away post-Brexit,” Ian Hudson, M.D., CEO of the U.K. Medicines and Healthcare Products Regulatory Agency (MHRA), insisted last month.

The U.K. leads Europe in biopharma VC (£515 million [$670 million] in 2017, according to the UK BioIndustry Association), and during the second quarter U.K. biopharmas completed two of Europe’s top 10 VC deals according to KPMG: Freeline Therapeutics (£90 million [$117 million]), and Crescendo Biologics (£53 million [about $69 million]). The kingdom also leads Europe in grants (6248), and number of biopharma companies (2066). The U.K. remains second to Germany in biopharma jobs (“more than 120,000,” according to the UK Bioindustry Association), and continues to lag in patents, placing fourth (293 granted and 501 applications in 2017).

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