Swedish drug delivery system manufacturer Amarin Development, led by CEO Stefan Olsson (inset), has built a strong presence in its home city of Malmo in large part on the strength of the region's university base.

Europe Weighs In

There is still plenty of biotech R&D going on in Europe, and more regions there are cultivating such clusters all the time. Northern England, for example, is actively making itself known to biotech and pharmaceutical companies in the U.S. and other locations as a prime area in which to embark on a U.K. or European expansion program. Research parks and incubators are in place, as are a major international airport at Manchester and other infrastructure amenities.
        Montreal, Québec-based MDS Pharma Services, a drug discovery and development company, has relocated and expanded its bioanalytical facility to Zurich, Switzerland. The 34,400-sq.-ft. (3,200-sq.-m.) new lab is twice the size of the previous one. The new Swiss facility is part of a broader expansion undertaken in 2002 that included relocation and expansion of three clinical pharmacology units, the building of a new lab for pre-clinical studies and establishment of a new location for central laboratory operations in Asia.
        The city of Leiden in the Netherlands is the location of the first BioPartner Center in that country. The Center, located in the Sylvius Laboratory at the University of Leiden, has incubator space for 75 biotech startups. A Bio Science Park is located nearby.
        Among the largest biotech clusters in Europe is the Medicon Valley, straddling parts of Denmark and Sweden. The area is home to about 100 biotech and about 70 pharmaceutical companies, 26 university hospitals and 12 universities. More than 30,000 people work in the medical industry, including 4,000 researchers.
        AstraZeneca operates a campus of facilities in Lund, Sweden, totaling 1.3 million square feet (120,000 sq. m.). Approximately 1,100 R&D experts work at the location. The Astra side of the recently merged company has been in the city since the 1950s; the late 1980s saw the greatest amount of expansion, according to Lars Hedbys, site general manager. The university was the initial draw, he says.

Lars Hedbys

        "Now that the area is known as Medicon Valley, it has become even more interesting to be based where we are," says Hedbys. Being in the center of a major industry cluster has definite advantages, but one drawback is employees' temptation to seek better opportunities across the street. "We need to be on our toes here, because it is important for us to make sure that we have the right opportunities for people and an innovative climate for people in order to retain them."
        Should a company open a new R&D facility on the Danish or Swedish side of the Medicon Valley? "Currently, 60 to 70 percent of the industry is located on the Danish side, so 60 to 70 percent of the people you could recruit are on the Danish side," says Hedbys. "Given salary and taxes, it's cheaper to live in Sweden; the quality of life in this part of the country is probably better, because it's cheaper to live and not as densely populated as the Copenhagen area, and it's easier to commute."
        Salaries are higher on the Danish side, as are the cost of living and taxes, notes Hedbys. "Right now, we are roughly leveling benefits and costs so that it's roughly worth the same from one country to the other," he says.
        The region got a significant boost in 2000 with the opening of a bridge connecting Copenhagen, Denmark, and Malmo, Sweden. "The bridge has had more of an impact than many of us thought it would," says Hedbys. "It was fairly simple to take a ferry from downtown Malmo to downtown Copenhagen, but with the bridge, it is much easier." The labor pool is larger, now that it is more convenient to move around the region.
        Amarin Development AB, a maker of drug delivery systems, has had a presence in Malmo since 1985 -- well before the area acquired the Medicon Valley moniker. "We have a very dense university establishment here, with a major Swedish university in Lund and one also in Denmark," says Stefan Olsson, CEO. "That, together with a number of large pharmaceutical companies being here in the region for some time, has created an environment allowing for smaller companies to grow in the region."

Peter Fyhr

        Olsson says the region remains attractive to his company and to others because of the strong value for the investment. "Purchasing land and building a facility is very reasonable from a cost perspective compared to other parts of Europe," he relates. "And staff costs are considerably lower, as are R&D costs." According to analysis Amarin Development did in 2002, real estate costs are one-third to one-half the cost of comparable facilities in the U.K.
        Adds Peter Fyhr, Amarin Development's R&D director, "People want to stay in the area, and there are good career opportunities in this area. And it's easy to recruit staff of the correct competence."