European drug discovery and development: success stories

Listen to this article on the DDW podcast: As we start to look beyond the pandemic, which areas of Europe's drug discovery community should we take note of? Lu Rahman highlights some of the key players. The European drug discovery sector is buoyant. Valued at $14.8 billion in 2020, the sector is expected to grow by 8.3% until 2030. This growth is due to factors including a rise in speciality medicines, an increase in lifestyle-driven diseases and a growing population1. With key players including AstraZeneca, Bayer, Novartis and Pfizer pushing the boundaries of drug development, the reason behind this growth is evident. The biotech sector is particularly noteworthy. According to McKinsey & Company: “Europe’s complex biotech landscape comprises hundreds of companies, dozens of countries, and multiple paths to innovation and financing… "While innovation is strong, it varies by country. France, Germany, and the United Kingdom (home to the largest biotech hub) stand out as the top three biotech centres in Europe, and together account for half of all European biotechs. France, Switzerland, and the United Kingdom have seen the fastest growth, accounting for 63% of the biotechs founded between 2018 and 2020.”2 Hotspots Accounting for 20% of the total global pharma market, Europe is a key market for biotech business, particularly those looking to bring new products to market3. While no longer in the EU, the UK remains one of the strongest pharma and biotech hubs in Europe. Data from the BioIndustry Association (BIA) and Clarivate4 shows 2021 was the highest year on record for investments into UK biotech and life sciences companies. £4.5bn was raised in public and private financings, £1.7 billon (60%) more than in 2020. According to Steve Bates OBE, Chief Executive of the BIA: “The UK is a global hub for life sciences, with a world leading academic base, global pharmaceutical players, an increasing manufacturing footprint and a thriving pipeline of innovative SMEs and entrepreneurs.” Switzerland too has long been recognised for its biotech success. This year’s Swiss Biotech Report5 shows that in 2021, the Swiss Biotech industry reached a new high in terms of a revenue which hit CHF 6.7 billion (In 2020: it was CHF 4.9 billion). Michael Altorfer, CEO of the Swiss Biotech Association6, outlines why the country is faring well in this sector: “Given the small size of their domestic market, Swiss-based biotech and pharma companies have always focused on the global market and invested heavily in international collaborations and R&D networks. It is therefore not surprising that Switzerland played an important role in the global effort to combat the pandemic, and that two Swiss based companies were successful in developing treatments to combat Covid infections (Humabs BioMed/Vir Biotechnology and Molecular Partners/Novartis).” In Germany the development of the Covid-19 vaccine, largely due to the achievements of BioNTech, raised the country's biotech profile. According to Ruth Bender, The Wall Street Journal7: “Now more German and international investors are looking to invest in the search for the next hidden gem in German biotech, venture capitalists, executives and analysts say.” She adds: “In 2020, German biotech companies raised a record of €3.05 billion, equivalent to $3.7 billion, through venture capital, share offerings and convertible bonds, triple the amount for 2019, according to Ernst & Young. While half of that went into BioNTech and CureVac, companies working on non-Covid-19 related treatments also got important financing rounds.” According to Christian Lang, Rechtsanwalt, Senior Associate, Pinsent Masons, Germany is the world’s leading medical biotech nation behind the US measured by scientific research. However, the commercialisation of research could improve8. Lang notes: “The opportunities extend beyond coronavirus vaccines. Scientific and technological breakthroughs are on the horizon in areas such as targeted protein degradation, cell antigene therapies to customise drugs and monoclonal antibodies being modified in new ways.” Volume 23 – Issue 4, Fall 2022 References https://www.businesswire.com/news/home/20211214006163/en/Europe-Drug-Discovery-Market-2020-to-2030---Trend-Forecast-and-Growth-Opportunities---ResearchAndMarkets.com https://www.mckinsey.com/industries/life-sciences/our-insights/infographic-biotech-hot-spots-in-a-fragmented-european-landscape https://www2.deloitte.com/us/en/insights/industry/life-sciences/expanding-into-european-biotech-industry.html https://www.bioindustry.org/policy/finance-tax-and-investment/finance-report-2021.html https://www.swissbiotech.org/listing/biotech-report-2022-facts-figures-2021/ https://www.swissbiotech.org/listing/biotech-report-2022-editorial/ https://www.wsj.com/articles/biontechs-covid-19-vaccine-success-sparks-investments-in-german-biotech-11620644401 https://www.pinsentmasons.com/out-law/analysis/biotech-investments-in-germany