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BIOTECH
A Site Selection Web Exclusive, May 2010
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WEB Exclusive story

The Key to Successful Biotech
Clusters in Switzerland and Sweden

Biotech
Patrik Frei (left), and Johan Ohlsson (right)
By PATRIK FREI, CEO and JOHAN OHLSSON, SENIOR CONSULTANT
T

he European biotechnology industry developed significantly over the past 10 years and contributed to the development of all of Europe's industry sectors. Many countries have focused some of their economic development efforts on biotechnology as it represents an industry with high valued-add and is primarily based on knowledge. It provides developed countries a way to compete with manufacturing-focused economies with cost advantages. The industry can be classified into three different sectors: biotech therapeutics, biotech R&D services and biotech other (agricultural and industrial etc.). (Find a definition of each sector here.)

The total number of biotechnology companies in Europe is around 3,600 according to the Biotechgate database, a global directory of biotech and life sciences companies. Not surprisingly, there are significantly more active biotechnology companies in Western Europe (3,375) than in Eastern Europe (251):

The European biotechnology industry

Western Europe

Eastern Europe

Public companies

Private companies

Public companies

Private companies

Biotech therapeutics

128

620

3

23

Biotech R&D services

74

1868

0

161

Biotech Other

42

643

0

64

Total

244

3131

3

248

Source: www.biotechgate.com


This analysis was conducted to compare the Swedish and Swiss biotechnology industries (both having a very strong biotechnology sector and a well-developed infrastructure) with the biotechnology industry of the two leading countries in Eastern Europe – Hungary and Poland. The analysis also highlights cluster trends in these countries.

Key statistics show that Sweden and Switzerland follow the same trend, with most biotechnology companies active in R&D services, followed by companies active in the development of human therapeutics, and the least number of companies in the biotechnology other category (agriculture, industrial etc.). The investigation of Hungary and Poland revealed that R&D services were the biggest sector and the therapeutics sector was the smallest, as described in the table below. It is evident that for the development of a strong industry first the biotech R&D services sector has to be established before therapeutic companies can start being founded. This certainly has to do with the availability of the necessary service and supporting companies for the biotechs, but also with availability of experienced management resources.

Active biotechnology companies in Sweden, Switzerland, Hungary and Poland

Country

Biotech Therapeutics

Biotech R&D Services

Biotech Other

Total

Sweden

83

152

59

294

Switzerland

70

167

50

287

Hungary

10

56

17

83

Poland

5

35

20

66

Source: www.biotechgate.com


All four countries have established clusters. Sweden has four clusters (Medicon Valley, Stockholm-Uppsala Life Science, GöteborgBIO and BioTech Umeå). Switzerland also has four clusters (Greater Zurich Area, BioValley Basel, BioAlps and Biopolo Ticino). Both countries have cross border clusters where Medicon Valley includes Sweden and Denmark and BioValley as well as BioAlps include Switzerland and France. Hungary has four recognized clusters/knowledge centers (Budapest, Szeged, Debrecen and Pécs) and Poland has three clusters (Warsaw, Wroclaw and Krakow). As in most cases with clusters, the common denominator is that the clusters are located in proximity to a university/Institute associated with the life science industry where there has been a link to the industry.

The Swedish and Swiss clusters have been quite productive despite the financial climate the last couple of years, as 10 and 22 biotech companies were founded in Sweden and Switzerland between January 2007 and April 2010. All of the companies in Sweden, Switzerland and Hungary were located in a cluster. Poland was an exception, as 40 percent of the companies were not located in one of the three clusters. The analysis shows that the Greater Zurich Area cluster was the most successful cluster in Switzerland with 12 new companies, and the Stockholm–Uppsala Life Science cluster was the most successful cluster in Sweden. The cluster located around Debrecen was the most successful Hungarian cluster and the Krakow cluster was the most successful Polish cluster.

Foundation of biotechnology companies between Jan. 2007- Apr. 2010

Country

Therapeutics

R&D Services

Other

Total

Sweden

6

3

1

10

Switzerland

15

7

0

22

Hungary

1

1

1

3

Poland

1

4

0

5

Source: www.biotechgate.com


The analysis of the number of active biotechnology companies in the four selected countries shows that it is not only the number of active biotechnology companies that Sweden and Switzerland have in common, but that the distribution of companies between the three biotechnology sectors is also similar (see graphs below).

A closer look at the biotechnology therapeutic companies in Sweden and Switzerland shows that around 259 R&D projects (88 in Sweden and 171 in Switzerland) are in development for the treatment of unmet medical needs. The number of ongoing R&D projects in Hungary and Poland conducted by biotech therapeutic companies only reached around seven, all of them conducted in Hungary.

There are a few therapeutic products in development in Poland, but these products are being developed by biotech R&D services companies.

In summary, it is clear and not surprising that Sweden's and Switzerland's clusters are more developed and productive than the Hungarian and Polish clusters. Two of the reasons for this are that the biotechnology industry in the latter is less mature and has limited access to financial means from national investors and government.

It's not a coincidence that Sweden and Switzerland managed to establish successful clusters. Both countries' clusters actually tick the majority of the crucial boxes that are a prerequisite for a successful cluster. The countries not only have a strong history in technology and life sciences, there are also a number of other significant variables that have contributed to the foundation of the successful clusters, such as

  • Close collaborations between academia and industry
  • Access to national investors
  • Talented individuals (education system linked to industry)
  • Governmental support

Other factors that have been suggested to contribute to the establishment of success clusters are the creation of social networks linking managers, scientists and financiers together as well as heterogeneity within organizations.

Last but not least the presence of big pharma companies also had a very high impact in the development and growth of the industry in Switzerland as well as in Sweden. Hungary and Poland might not be at the level of their Westerner counterparts, put they are in the process of establishing a healthy biotech industry. However, it will still take some years and the support of the government to be able to get to Western numbers.

chart1

Biotechnology companies in Sweden, Switzerland, Hungary and Poland and the ratio of the total number of active biotechnology companies to therapeutics, R&D services and other biotechnology companies




Venture Valuation is a Zurich-based consultancy specializing in the life sciences sector.

Sources

Reports:
Biotech in the new EU member states an emerging sector, Europa BIO and Venture Valuation, 2009

URL:
 
www.Biotechgate.com; www.greaterzuricharea.ch; w.biovalley.ch; www.bioalps.org; www.biopolo.ch;

www.mediconvalley.com; www.suls.se/; www.biotechumea.se; www.goteborgbio.se;


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