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The Lists: June 19, 2017

Top 10 European Biopharma Clusters

The Continent’s Key Academic and Industrial Centers for Drug Development

  • A provocative study published earlier this month in the journal Science and Public Policy contends that Europe lacks the cutting-edge science long seen in the U.S., and increasingly published in Asia: “Europe lags far behind the USA in the production of important, highly cited research,” co-authors Alonso Rodríguez-Navarro, Ph.D., of Universidad Politécnica de Madrid, and Francis Narin, Ph.D., founder of CHI Research (now The Patent Board).

    The co-authors based their conclusion on research showing that European investigators published almost twice as many research papers of minimal impact papers, while their U.S. counterparts generated at least twice as many very-highly cited scientific papers, resulting in more Nobel prizes. The only exceptions, where European researchers came close to Americans, were in clinical medicine and physics, which the co-authors dismissed as more multinational and collaborative.

    The conclusion may come as something of a surprise to industry watchers, who would note that Europe has many of the essentials needed for biopharma success. These include top-flight academic research, significant public research funding, a growing number of small- and medium-sized biotechs nurtured by regional biotech clusters, and a heritage of pharmaceutical giants stretching back to 1668, when Merck KGaA was founded in Darmstadt, Germany.

    And Europe is close to developing a new and costly essential toward expanding biopharma in this century: The European Commission on Monday was to hold a summit meeting at which member nations were to commit themselves toward launching by 2020 the European Open Science Cloud (EOSC), a virtual environment to store, share, and reuse data across disciplines and borders to benefit Europe’s 1.7 million researchers and 70 million science and technology professionals. By year’s end, member nations will be presented with an implementation plan or “roadmap” and details of funding; total costs have been estimated at €6.7 billion ($7.5 billion).

    This year’s European Cluster Ranking includes all of the countries that appeared on last year’s Top 10 List, but with several changes in the rankings, notably at the top. Some countries narrowly missed Top 10 inclusion this year, despite Top 10 rankings in at least one of GEN’s criteria. These include Austria, which ranked seventh in number of companies with 336; and Ireland, which ranked seventh in venture capital (€30.741 million [$34.3 million], according to Invest Europe).

    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 (formerly known as EVCA; European Private Equity and Venture Capital Association)—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 2016.
    • 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. Italy

    While think tank The European House–Ambrosetti last year ranked Italy second in published research behind only Germany, the nation’s biotech cluster as measured by GEN ranges from middling (sixth in research funding with 2,058 grants) to worse. The nation places eighth in patents (145 granted and 189 applications in 2016), and ninth in number of companies with 290 “red” biotechs actively developing innovative therapeutic and diagnostic products, according to ENEA, the Italian National Agency for New Technologies, Energy and Sustainable Economic Development. Italy is outside the top 10, however, placing 11th in both biotech jobs (6,847) and venture capital (€9.27 million [$10.4 million], according to Invest Europe).

    Improving on Italy’s available capital to biotech startups has been a priority for biotech leaders in recent years. Most recently in May, tech transfer facilitator AurorA-TT of Milan revealed plans to raise a €50 million ($56.1 million) fund that will be Italy’s first devoted to biotechs seeking to translate new technologies into new drugs. AurorA-TT’s co-founders include the CEO of gene-therapy developer Genenta Science: “We need companies to reach Series A. We need more Genentas. That’s what the fund will be for,” Pierluigi Paracchi told Labiotech.eu. Another biotech, Bresso-based Newron Pharmaceuticals, generated €11.3 million ($12.7 million) in May from partner Zambon through a milestone payment following FDA approval of Newron’s lead compound Xadago (safinamide) as a treatment for Parkinson’s disease.

  • #9. Denmark

    Denmark places sixth in patents (162 granted and 366 applications in 2016) and jobs (40,000, according to Denmark’s Ministry of Foreign Affairs), but ranks lower in venture capital (ninth with €10.427 million [$11.7 million] according to Invest Europe), grants (10th with 983 grants), and number of companies (11th with 160). That ranking reflects only quantity, not quality of companies, which range from giants like Bavarian Nordic, Lundbeck, and Novo Nordisk to startups like Copenhagen-based mucosal patch developer Dermtreat—which attracted Danish early-stage funds Novo Seeds and Lundbeckfonden Emerge among investors in a €16.2 million ($18.1 million) Series A financing closed in May.

    A slightly lower amount, €13.41 million ($14.94 million), will be spent by Denmark’s government from 2017–2020 to finance the cost of the new genome research center that opened earlier this year in greater Copenhagen, with close linkage to Aarhus in Central Denmark. Another noteworthy anchor of biotech in Denmark is the Medicon Valley consisting of Greater Copenhagen and Sweden’s Scania region, where 155 biotechs and 80 CROs or CMOs have a presence, employing many of the 40,000 people whose jobs are based in the region.

  • #8. Belgium

    Belgium has climbed from eighth last year by rising to seventh on three of this list’s five measures: Patents (126 granted and 269 applications in 2016), research funding (1,220 grants), and jobs (“more than 30,000,” according to FlandersBIO). The country also rose from last year in number of companies (now eighth with 300, according to FlandersBIO) and in venture capital (10th with €10.144 million [$11.4 million], according to Invest Europe).

    Home-grown companies making news in recent weeks include Imcyse, a spin-out of the University of Leuven in Flanders, which is launching a Phase I trial of a vaccine for type 1 diabetes it developed with the French National Institute of Health and Medical Research (INSERM). Also, Celyad, based in Mont-Saint-Guibert, in May received the FDA’s Fast Track designation for its C-Cure cell therapy, which uses a patient’s own stem cells to treat ischemic heart failure—a distinction the company hopes will help it attract a partner enabling it to launch a Phase III trial.

  • #7. Sweden

    Sweden has built on a history of pharmas such as Astra (now AstraZeneca) and Pharmacia, acquired by Pfizer in 2003, to create a strong base of biotechs, which explains why the nation is fourth in jobs (40,764 as of 2014, according to Sweden’s R&D funding agency Vinnova) and sixth in companies (596, according to Swedish Life Sciences Database, whose partners include the government-funded life-sciences strategic innovation program SWElife). Sweden is also sixth in venture capital; Invest Europe recorded €34.384 million ($38.7 million), although Aprea Therapeutics, which is based in both Stockholm and Boston, completed a €46 million ($51.8 million) Series B financing.

    Aprea made news in March when it announced a collaboration with Memorial Sloan Kettering Cancer Center to evaluate and characterize the preclinical efficacy of the company’s lead program, the Phase II ovarian cancer candidate APR-246, in combination with multiple other anticancer agents and across multiple tumor types. Sweden ranks further behind in research funding (eighth with 1,198 grants) and patents (10th with 91 approved and 125 applications), notwithstanding a strong research base that includes the Karolinska Institute as well as Lund, Uppsala, and Göteborg Universities.

  • #6. Switzerland

    Swiss Biotech Day on May 4 offered some reasons for celebration: the sales of homegrown biopharmas jumped 11.7% last year over 2015, while employment rose 3.2% year-over-year. Switzerland’s biopharma workforce grew to 15,362, which only ranks the nation ninth in jobs, albeit headed in the right direction. Switzerland is also ninth in research funding (1,105 grants), and 10th in number of companies (281 according to Swiss Biotech).

    Yet one of those companies, Allschwil-based Actelion, has generated the year’s biggest deal to-date, and the only 11-figure megadeal when it agreed in January to be acquired by Johnson & Johnson for $30 billion. J&J announced completion of the deal on Friday, soon after receiving European Commission approval. Switzerland also shines in patents (third with 319 granted and 845 applications), and especially in venture capital, where it ranks second with CHF 399 million ($410 million), according to the 2017 Swiss Venture Capital Report by Startupticker.ch with SECA—Swiss Private Equity & Corporate Finance Association.

  • #5. Spain

    Spain’s best ranking is its number of companies (third with 628), followed by research funding (fifth with 2,140 grants). its lowest was in patents (ninth with 99 granted and 222 applications in 2016), followed by jobs (eighth with 27,578 in 2014, according to ASEBIO data released last year). The nation is seventh in venture capital (€20.96 million [$23.5 million], according to Invest Europe), less than half the combined €56 million ($62.9 million) recorded in two sizeable 2015 deals.

    The largest of those 2015 deals—Spain’s largest-ever biotech financing—was the €36.6 million ($41.1 million) raised by Sanifit in Series C financing. Sanifit’s lead candidate, SNF742, is a first-in-class treatment for calciphylaxis in dialysis patients that advanced last year to Phase II development. The most recent Spanish VC deal had Madrid aptamer-based drug developer AptaTargets closing a €2.7 million ($3 million) Series A financing in May, with plans to advance its lead candidate, the acute ischemic stroke treatment ApTOLL into the clinic. Earlier this year, Derio-based One Way Liver S.L. (OWL) revealed plans to expand to the U.S., into the VABeachBio Accelerator in Virginia Beach, VA, under a partnership with Sanyal Biotechnology in which Sanyal will expand to Europe at OWL’s site.

  • #4. The Netherlands

    The Netherlands ranks highest with fourth-place showings in both research funding (2,147 grants) and patents (162 granted and 259 applications in 2016). Holland finishes fifth in jobs (35,000 in 2016, according to Holland BIO; though Association Innovative Medicines [VIN] counts just 18,000 direct jobs), and fifth in venture capital (€63.5 million [$71.2 million], according to the Netherlands Foreign Investment Agency), but sixth in number of companies (462, also according to Netherlands Foreign Investment Agency).

    Two recent examples of the strength shown by homegrown biotech companies: Amsterdam-based Norgine last month agreed to acquire Toronto-based Merus Labs for $342 million. Also in May, Rotterdam-based argenx closed its initial public offering, raising $114.7 million in gross proceeds by selling 6,744,750 American Depositary Shares at $17 each. On the pharma front, however, a report issued earlier this month by PwC and Association Innovative Medicines (VIN) blamed Dutch government policies promoting lower-cost drugs for what it said was a shrinking presence of pharmas engaged in drug R&D in the country: “The Dutch Association Innovative Medicines wants The Netherlands to be the location of choice in Europe when it comes to research and development of medicines. This requires that The Netherlands become a more attractive location for Research & Development in this area.”

  • #3. France

    France’s new president, Emmanuel Macron, took office last month after winning election with 66% of the vote. At least some of that result can be attributed to the endorsement Macron received from industry group France Biotech, which said it was “alarmed at the excessive protectionism promoted by the National Front,” the party of Macron’s opponent Marine Le Pen. France Biotech also expressed fears that biotech entrepreneurs would respond to a Le Pen victory by emigrating from France "towards more open countries.”

    The nation is fourth in companies with approximately 600, but third in venture capital with €291 million ($326 million), both numbers according to France Biotech. France is also third in research funding (3,061 grants) and in biopharma employment, with 98,810 jobs as of 2014, according to figures quoted late last year by pharma industry group LEEM (Les Enterprises du Medicament). The nation fares even better in patents, where it ranks second in Europe (387 granted and 909 applications in 2016).

  • #2. Germany

    The Federal Republic is tops in European biopharma patents (570 granted and 1,194 applications in 2016) and in jobs (up to 151,475), despite varying estimates: The German Trade and Investment (GTAI) government ministry records 112,475 pharma jobs and 39,000-plus biotechnology jobs, though EY and industry group BIO Deutschland use a lower biotech job figure of 24,770. The nation finished second in research funding (3,379 grants) and companies (1,305), but dropped a notch since last year to finish fourth in venture capital (€216 million [$242.3 million] in 2016, according to BIO Deutschland).

    Germany faces its own federal election later this year: On September 24, voters will elect members of the Bundestag—and decide whether Chancellor Angela Merkel and her Christian Democratic Union and its Bavarian sister party the Christian Social Union, will win re-election over the Social Democratic Party and its leader Martin Schulz. Last month Schulz lost a state election in his home state, biotech-heavy North-Rhine Westphalia, and Merkel has commanded leads of varying amounts in opinion polls. Under Merkel, Germany sought to maintain European leadership in biotech and other tech sectors through the “New High Tech Strategy” unveiled in 2014. Earlier this month, at the China-Germany Forum: Shaping Innovation Together in Berlin, Merkel and China’s Premier Li Keqiang committed to greater cooperation in biotech and other emerging technologies, as well as “speed(ing) up the efforts of applied research, and the transfer and application of technologies,” according to a transcript by China’s official Xinhua news agency.

  • #1. United Kingdom

    The U.K. BioIndustry Association last month trumpeted that the kingdom was on track to becoming the third global biocluster after Boston/Cambridge and the San Francisco Bay Area. The kingdom is well on its way, finishing tops in European Union–funded research funding (4,921 grants), in venture capital (£681 million [$868 million], according to the UK BioIndustry Association) and in number of biopharma companies (1,857). The U.K. is second in biopharma jobs with 114,000 of a total approximately 235,000 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 April 6 by the U.K. Office for Life Sciences and Department for International Trade. However, the U.K. ranked only fifth in patents, with 236 granted and 409 applications in 2016.

    Uncertainty touched off by the Brexit vote to leave the European Union has lingered for a year, most recently stoked by the June 8 general election that saw Prime Minister Theresa May and her Conservative party lose the majority in Parliament. Should events (still unfolding at deadline) usher in a new government headed by the Labour party and its leader Jeremy Corbyn, the U.K. is expected to explore a “soft” Brexit with some close ties to the EU—and could roll back some biopharma regulations favorable to business, such as the “patent box” framework, which Labour’s shadow chancellor of the exchequer John McDonnell called a “potential tax loophole with limited impact on research.”