Biotech is entering its next stage of growth as companies work to transform an array of innovations from drug development to gene therapies, stem-cell treatments, mRNA and CAR-T into powerful new therapeutic tools. Yet more scientific and technological breakthroughs are on the horizon. Europe’s role in this industry continues to grow, and the region leads in many ways. Future success, however, will depend on improving the transformation of research into new companies capable of launching high value products in the marketplace, raising more capital, and building entrepreneurial talent.
Europe has a complex biotech landscape
Hundreds of companies, multiple paths to innovation and financing, marked differences among countries all under a strong regulation.
In a majority of European countries, the newest biotech entrants focus on several modalities: drug-discovery tools and services, diagnostic and personalized care, contract research organizations (CROs), and contract management organizations (CMOs). Cell and gene therapies (CGTs) and immunotherapies are the fastest-growing areas—claiming some 40 percent of investment funding, these two have been the focus of almost a third of the companies founded since 2012. As for therapeutic areas, oncology and central nervous system (CNS) lead the field, with 42 percent of the companies and (as of the close of 2018) about half of the investment.
Europe has world-class research institutions, medical centers, and hospitals that provide a strong basis for sourcing and developing scientific and clinical innovations. The region is home to 16 of the world’s top 50 universities for life sciences and publishes roughly the same number of articles in top ten journals as the United States does and three times as many as China. However, Europe’s strength as a global powerhouse for scientific research and publication does not yet translate into patents for new medicines: the United States originates about three times as many as Europe does and China about nine times as many.
Further down the innovation chain, European companies were responsible for originating 13 percent of the new drugs produced by biotechs and approved by the US Food and Drug Administration in 2017 and 2018, while US biotechs were responsible for 78 percent. However, Europe’s share of new drugs could grow if its biotechs are able to attract more investment; they currently receive only 20 percent of the funding their US counterparts do. Europe also shows great promise in emerging treatment areas: 32 percent of all European projects in Phase III or registration for products are based on technologies such as antisense, viral vectors, and siRNA.
If we assess Europe’s performance against that of the United States and index the latter at 1.00, early innovation (measured by publications and patents) stands at 0.73 in Europe. Late innovation (based on drug approvals and innovative candidates) is much lower, at 0.41. Clearly, Europe has some way to go to catch up with the United States in patenting commercially relevant innovations and turning science into drugs.
Biotech experts score Europe highly on its overall level of innovation and quality of R&D talent—just a fraction behind the United States and well ahead of China. The talent base for research is strong however; for drug development, it is smaller but growing. Companies often struggle to attract and retain talented staff who have experience in biotech and in business development. Talent with experience in rare diseases and oncology is also thought to be in short supply. In addition, a third of McKinsey & Company experts think European biotechs lack a sufficiently entrepreneurial mind-set.Not only success in healthcare biotech is without any doubt indispensable to bring effective solutions in uncurable diseases up to now, but also its direct annual global potential economic impact is very high, estimated at $0.5 trillion to $1.3 trillion over the next ten to 20 years (McKinsey & Company).
Having scrutinized this Status Quo with our solution-oriented culture, the European Biotech Venture Builder aims to contribute to this potential and gaps in Biotech by implementing its innovative business model addressing the following three priorities:
Working toward global competitiveness through integration of efficient vertical biotech strategies
Despite this technical framework being common knowledge, we have experienced the status quo as being that each vertical is not maximized to its full potential, leading to ventures that ultimately fail in the marketplace. At the European Biotech Venture Builder, we make sure that leaders think, from the beginning, about how to maximise their innovations for success in global markets. Competitiveness begins with identifying a robust value proposition, defining areas to win by scaling up, and considering how to differentiate products enough from competition to successfully gain access to the global market.
Build a foundation for success, attract the right funding at the right cadence
Despite the framework for obtaining funding being generally well understood, we have seen that following and applying this framework to known public & private capital sources has not always secured adequate funding for biotech ventures.
At the European Biotech Venture Builder we ensure that strategies related to attracting and deploying of funds are considered from the beginning. This robust planning includes avoiding early dilution of company ownership, increasing company credibility through an optimized capital investment strategy, and forging strong relationships with the right stakeholders to attract the right interest.
The European Biotech Venture Builder business model is designed to decrease risk while delivering higher valuations and impact products
At the European Biotech Venture Builder, we build by integrating the different technical and capital raising strategies, derisking & maximising the value of the RoadMap and Equity Story, and consequently, your Corporate Value allowing promotion of the venture’s success in the global marketplace.
