For some time now, life sciences corporations have been seeking to replicate, gobble up or at least cozy up to the startup vibe. So it figures a study of which cities cultivate the best startup environment in the sector would be of interest. Fortunately, Bay Area-based Startup Genome’s new Global Startup Ecosystems Report delivers the business intelligence they seek.
Startup Genome’s research infrastructure includes data on over 1 million companies and nearly 100 ecosystems from sources including CrunchBase, Orb Intelligence and Dealroom, as well as survey data from more than 10,000 startup executives across the globe. Here, with permission, we present an adaptation of the report’s listing of the most important global health and life sciences ecosystems, based on high-performance venture capital activity and special focus in the areas of biopharma, medtech, digital health and healthcare.
Vancouver: British Columbia’s Life Sciences sector contributes around $14.4 billion in GDP, with Vancouver’s right at the heart of it. With a workforce of around 14,000 people, the University of British Columbia (UBC)–Broadway Corridor represents a significant knowledge network. Notable startups are 3D bioprinting company Aspect Biosystems, biotherapeutic platforms company Zymeworks ($125.9 million in total VC funding), and cell research & tools-focused StemCell Technologies.
"Vancouver’s academic institutions have cutting-edge innovation, and UBC is a premier example, able to spin out both the companies and technical talent necessary to grow a robust biotech cluster," says Tamer Mohamed, president & CEO at Aspect Biosystems
Edmonton: The University of Alberta has made a number of medical breakthroughs such as a treatment for Type 1 diabetes known as the Edmonton Protocol, and a new heart transplant protocol for children. The school is also the home of DrugBank, a pharmaceutical knowledge base for machine learning and precision medicine with more than 3,500 academic citations and 12 million page views annually. A new accelerator from TEC Edmonton and Merck is a driving force for future startup creation.
Toronto-Waterloo: Toronto’s Discovery District contains more than 30 medical and related sciences research facilities, with strengths in medical imaging and regenerative medicine. Across the Corridor, 450 ventures raised more than $300 million in 2017. Notable raises include BlueRock Therapeutics ($173 million), PointClickCare ($85.5 million) and Fusion Pharmaceuticals ($19 million).
Quebec City: Quebec City’s strength draws primarily from its high-class education infrastructure with both Université Laval and INRS conducting leading-edge research. Legacy industry in the city counts more than 120 companies, some 6,400 employees, 85 research centers, chairs, groups and institutes, and more than $1.3B in estimated sales. The city also offers lower operating costs for companies in clinical trials and biomedical research. Local success stories include Medicago and GenePOC, whose president and CEO Patrice Allibert says, "We’re based in Québec City because there’s a skilled workforce here. The expertise is just two steps away, so why look any further?"
Silicon Valley: With more than $10 billion invested into biotech startups over the last six years, the Bay Area accounts for more than 25 percent of global biotech VC investments. The local workforce consists of top researchers from all over the world, fueled largely by a talent pool with strong ties to Stanford University, UCSF and UC Berkeley. The two-square-mile patch of South San Francisco is the center of gravity for biotech companies such as Genentech and Exelixis, as well as early-stage startups such as Freenome, which closed a $65 million Series A round in August 2017.
Phoenix: Healthcare provides 60,000 jobs and contributes $8 billion to the Greater Phoenix economy. Success stories include companies like Symphony Health Solutions, the pharma data company acquired in 2017 for $530 million by PRA Health Sciences, and sizable funding rounds like the $18 million raised by Solera, the digital health company serving employers and health insurance plans.
Austin: Healthtech startups leverage world-class learning institutions like the Dell Medical School at the University of Texas or the newly established Merck IT Hub. One prominent startup is Medici, a healthcare application that is reconfiguring the patient-doctor relationship through smartphone technology. The company raised $24 million in Series A funding soon after its product launch. Over 200 life sciences companies are in the region, and a workforce of nearly 12,300 is focused on the highest growth segments and research areas in the industry, including biologics, medical devices, diagnostics, pharmaceuticals and contract research.
Houston: Health startups have the biggest share of VC investment in Houston, bringing in 24.2 percent of the VC money in the ecosystem from 2012 to 2017 — twice the concentration of health investments globally. Healthcare employs over 325,000 people in the city, and is the second biggest employment sector. Rice University is ranked as a top 10 university globally for biomedical engineering. In addition, Houston is home to the Texas Medical Center, the world’s largest medical center. Major exits include Constellation Healthcare Technologies, acquired for $311 million, and Cardon Outreach, which provides tech solutions to healthcare facilities, acquired for $400 million.
Boston: Regarded by many as the pre-eminent global biotech powerhouse, the Boston area is home to more than 1,000 Biotech companies, top academic research centers, universities and life science centers with over 46,000 scientists, researchers, and staff, and over 21,000 students in related fields. For 21 consecutive years, Boston has received the most funding from the National Institutes of Health (NIH) of any U.S. city. Over the past six years, 31 percent of local VC investment went into biotech. RNA therapeutics company Moderna raised $450 million in 2015 and another $500 million in 2018.
New York City: Between 2012 and 2017, about 9.2 percent of the VC funding in the ecosystem went to health startups. Unicorns include Oscar, the health insurance startup valued at $3.2 billion; and Flatiron Health, acquired by Roche in 2018 for $2.1 billion in what was the largest VC-backed exit out of New York in the past five years. The ecosystem is supported by major local assets: nine academic medical centers, $1.6 billion in NIH funding research in 2016, and 450,000 local jobs. The sub-sector is also being accelerated by the city’s 10-year, $500-million LifeSci NYC initiative, on top of the state’s $620-million incentives commitment. The initiative includes a $150-million VC fund, wet lab and co-working spaces, and a new R&D center. Toronto-born BlueRock in April announced it was putting its R&D hub at the Alexandria Center for Life Science, and also formalizing a sponsored research collaboration with the Center for Stem Cell Biology at Memorial Sloan Kettering Cancer Center.
Tampa: Life sciences has the highest share of VC investments from 2012 to 2017 (23 percent) in Tampa Bay. Notable startups include CareSync, provider of software and services for chronic disease management, raising $26.5 million in 2017; Peerfit, a digital fitness platform, raising $10.3 million in a series B in 2018; and myMatrixx, a pharmacy benefits solution provider, acquired for an estimated $250 million in 2017. The broader healthcare sector in Tampa includes over 3,000 companies employing 62,100 workers, among them WellCare, with a market cap of $6.3 billion.
Greater Helsinki: FinnGen, one of the most ambitious genetic research efforts in the world, aims to analyze hundreds of thousands of Finnish blood samples to develop new therapeutics and diagnostics. A leading treatment for opioid overdoses was developed in Helsinki, and regional health care institutions are applying AI to identify and treat diseases. Local success stories include Blueprint Genetics, a genetic testing company that raised $17 million in funding last year and already counts customers in 40 countries. "Today we have a great, informal and very active community of entrepreneurs, investors and advisors, and it is extremely easy to connect to European, US and Asian peers," says Tommi Lehtonen, CEO at Blueprint Genetics. "Helsinki has always had very good talent available for with a very reasonable salary level, but I think we are only now starting to see the benefits and power of our talent pool."
London: In the UK, pharmaceuticals, medical biotechnology and medical technology sectors together comprise around 4,500 firms, employing 183,000 staff, with an R&D spend of nearly £5 billion (US$7.1 billion) and an annual turnover of over £56 billion (US$79 billion). The lion’s share is in the Greater London-Cambridge-East of England corridor represented in the sector by the 20-year-old membership organization One Nucleus. Twenty percent of biopharmaceuticals in development in the EU originate in the UK. Among the assets touted by the London BioScience Innovation Centre at the Royal Veterinary College are more investment funds than the other top 10 European cities combined; 98 hospitals and NHS Trusts; numerous headquarters of research councils and bio-regulatory bodies; valuable R&D tax incentives and financial assistance to SMEs; and access to a high-quality labor force from research universities in the metro area.
Amsterdam: Two of the three billion-dollar exits in the Netherlands in the past three years are healthcare companies: Acerta Pharma was acquired for $4.9 billion by AstraZeneca, DezimaPharma was acquired by Amgen for $1.7 billion. About 10 percent of the VC funding from 2012-2017 went to healthcare companies. The underlying assets of the overall Netherlands ecosystem include 12 research universities, 85 hospitals, many research organizations and 2,500 life sciences and healthcare companies. "Tech talent is highly interested to work for startups and the medical community is very approachable due to our flat hierarchical culture," says Eline Vrijland-van Beest, founder and CEO, NightBalance. "Combined with available early-stage funding I would say we have fertile grounds for medtech companies."
Berlin: Three universities rank in the top 50 globally in several medical and life science disciplines, while healthcare giants such as Bayer and Pfizer operate vertically focused labs and accelerator programs. Successful startups benefit from Berlin’s industry expertise as much as the depth of talent mastering disciplines such as data science and software engineering. Emerging health startup Ada Health is leveraging AI to build an innovative medical app with almost $70 million in funding.
Paris: In 2011, France spent 11.6 percent of GDP on healthcare, a figure much higher than the average spent by countries in Europe, making it a good environment for healthtech startups. The most successful one is Doctolib, an online and mobile booking platform that helps to find and book consults with specialist doctors nearby. The platform is used by over 40,000 physicians in Europe and the company raised $42 million in Series D funding in November 2017. Another highlight is CardioLogs, which recently raised $6.5 million in Series A funding.
Munich: Munich’s Healthcare sector consists of some 350 companies that generate more than $5 billion in combined revenues. Fraunhofer Society, Europe’s largest institution for applied research, is just one of many key institutions headquartered in Munich. LMU Munich ranks fifth globally in medtech, while TUM ranks 22nd. Two startup success stories are Sapiens and Definiens. The former is a medical device company delivering solutions for deep brain stimulation therapy, which sold for $200 million in 2014. Definiens provides solutions for digital pathology and sold in the same year for $150 million.
Barcelona: Between 2012 and 2017 approximately 15 percent of the VC investment in the ecosystem went to health and life sciences companies, with the number of biotech companies in Catalonia growing by 15-30 percent each year. Today, over a quarter of Spanish biotech companies are located in the region, where there are nearly 100 research centers, universities, science and technology parks, and industry organizations that engage in activity related to biotech and pharma. Catalonia also is home to the five largest pharmaceutical companies in Spain.
Jerusalem: Tel Aviv may be Israel’s high-tech capital, but the heart of life sciences and biotech innovation lies in Jerusalem. The city is home to some 150 life sciences companies that employ more than 3,000 people and accounted for 27-29 percent of local VC investment over the past six years. Nearly half of the biotech and medical research in Israel is conducted in Jerusalem at the Hebrew University of Jerusalem and its affiliate Hadassah Medical Center. This research often translates into successful startups like Oramed Pharmaceuticals, a company developing proprietary oral drug delivery technology which is based on over 30 years of medical research at Hadassah. There is a growing number of platforms for life science entrepreneurs in the city such as BioGiv, BioHouse, Alynnovation and BioJerusalem. Other startup success stories include Gamida Cell, a leader in the development of stem cell therapy technologies and products, with total funding of $98 million.
Taipei: Taipei’s biotech sector is expected to reach around $120 billion in production by 2025. Roughly 18 percent of local VC investment between 2012 and 2017 went into biotech, making it the second strongest sub-sector. Success stories in this space include the Taiwan Liposome Company, which filed for a NASDAQ IPO earlier this year, TaiMed Biologics and JHL Biotech. TaiMed Biologics is a National Research Institute spin-off with $20 million in funding, currently seeking FDA approval on innovative HIV treatments. JHL Biotech is a biopharmaceutical company with $80 million in backing from premier investors such as Kleiner Perkins Caufield & Byers and Sequoia Capital.
Hong Kong: Hong Kong’s healthcare system is more digitized than many of its counterparts, while biotech in the city has seen steady growth over the last few years. Major fundings in 2017 include IDS Medical Systems Group (idsMED), a medical supply-chain solutions company which raised $60 million in a private equity round, and Prenetics, a leading genetic testing company, which raised $40 million in series B funding.
Kuala Lumpur: Kuala Lumpur’s Healthtech startups are primarily focused on connecting patients to medical providers. They include Getdoc, Door2Door Doctor, Teleme, HomeGP, Healthmetrics, and BookDoc — which recently raised $2 million. Known for its medical device sector, Malaysia is one of the world’s top destinations for medical tourism, receiving nearly 1 million foreign patients seeking treatment locally per year.
Singapore: The star of the thriving Singapore scene is Biopolis, which occupies nearly 46 acres (18.5 hectares) located near the National University Hospital and hosts a full spectrum of R&D activities. With access to services ranging from microarray to DNA sequencing, Biopolis is home to public research institutes such as A*Star, Singapore’s lead agency for scientific research, as well as private companies such as Illumina, Takeda and Procter & Gamble. MSD and Roche also have prominent operations, and Pfizer, Novartis, Sanofi, AbbVie and Amgen have global manufacturing hubs there. More than 6,000 people in the skilled workforce are employed in biopharma, a number that has more than doubled since the early 2000s. GSK, which already operates three plants in the Singapore proper as well as Tuas and Jurong, in October 2017 opened its new headquarters for Asia in the city-state.
Melbourne: Since 2014, the city has seen eight life sciences companies go public. Over half of Australia’s publicly listed life sciences companies are based in Melbourne, where approximately 180 biotech companies cluster in the innovation precinct surrounding the University of Melbourne, which ranks ninth in the world for medicine and health. A string of recent acquisitions and public listings have reinforced local biotech growth: In 2015, Spinifex Pharma was acquired by Novartis for $200 million, Hatchtech signed a commercialization deal with Dr. Reddy’s for up to $280 million, and Starpharma entered into licensing deals with Astrazeneca worth up to $450 million. Befitting Melbourne’s title as the world’s Ultimate Sports City, 6 percent of Melbourne startups are in sports tech, with many of those working on health issues. Health startups in Melbourne benefit from the presence of Monash University, which is highly ranked globally for its clinical medicine and pharmacy programs. "Victoria has a global reputation for cutting edge innovation in medical technology including customized 3D-printed surgical implants and the mind-controlled robotic prosthetic arm," says Andrew Wear, director, MedTech and Pharmaceuticals, DEDJTR. "Our medical technology and pharmaceuticals industry employs around 23,000 people and generates over $12.7 billion in revenue."
New Zealand: Fueled by local academic institutions like University of Auckland, University of Olago, and Massey University, the country has the highest density of post-secondary science graduates and Ph.D. graduates in life sciences in the world. Most of the activity in this sector has been in contract manufacturing and in wellness. The government is looking to build on these assets to transform the country into a center for biotech innovation, allocating $40 million in an investment fund dedicated to Biotech opportunities. An interesting startup in this sector is UpsideBio, a regenerative medicine company which recently closed a Series A funding round of $2.3 million.
Look for more insights from Startup Genome in the Regional Startup Ecosystems feature in the July 2018 issue of Site Selection.
