With slightly more than 2,000 biotechnology companies, a number rivaling figures in the United States, Europe as a whole is showing that its life sciences industry is alive and well. Averaging about 100 new startup companies annually, Europe seems to have no problem as far as entrepreneurial innovation goes.

But the success of the life sciences industry depends on far more than innovation.

It needs monetary resources to sustain long-term growth, and nurture future idea generation and subsequent product commercialization.

This may be where Europe faces its greatest challenge.

According to a report in May 2006 by Critical I, a United Kingdom-based consultant firm specializing in the biotech industry, the United States has about 2,000 biotech companies. However, the United States also has twice as many people employed in the sector, spends about three times as much on research and development as its European counterparts, and raises more than twice as much venture capital.

Perhaps not surprisingly, the report stated that the U.S. biotech industry also earns twice the amount of revenue that European biotech companies can earn.

In fact, there are plenty of life sciences companies that are striving to take Europe to new heights of success. And chances are good that opinions gleaned from European life sciences companies about their experiences on the continent would be, more often than not, positive.

Company Chooses Germany Over the United States

Europe is home to several hot spots where life sciences companies are clearly flourishing. One of the more established areas is the German region centered around Cologne, Aachen and Dusseldorf, known as “Bioriver.”

A variety of companies, including lab technology supplier DASGIP AG, are enjoying success in this lucrative region.

Founded as an information technology company with biotechnology as one application field, DASGIP AG has pursued its development of bioreactor technology in the city of Juelich, located within a half-hour’s drive of Aachen and the Netherlands.

From its roots in the small town of Zulpich, west of Cologne, the company moved to Technology Park Juelich, and it also now has a U.S.-based subsidiary, DASGIP Biotools in Shrewsbury, Mass.

The company is actively involved with the stem cell community and was the industry’s first provider of bioreactor technology to stem cell researchers during the past several years.

The company recently decided it would maintain its European headquarters in Juelich, as opposed to somewhere else.

“Despite making half of our revenues in the United States, we decided to stay in Germany, and if in Germany, then in the “heart of Europe,” where you can reach each major city within a few hours,” said Jennifer Vogt, a spokeswoman for DASGIP AG. “This is of great value for a small company such as ours, which has to calculate both the service requirements of our customers and the costs for staff, traveling and delivery very carefully.”

Biosite Finds ‘Neutral’ Image in Switzerland

Outside of Germany, other European hot spots for life sciences success include the Medicon Valley, spanning the Greater Copenhagen area in Denmark and the Skane region of southern Sweden.

“The key in both cases is the combination of industrial infrastructure and capital,” said John Hodgson, director of Critical I Ltd. “In Switzerland, they haven’t created that many companies, but the ones that have been created have been well funded from the start, both from the venture capital community and the Swiss Exchange stock market.”

Switzerland was the location of choice for Biosite Inc., a research-based provider of novel, rapid medical diagnostics. The company recently relocated its operations from France and opened its new European headquarters in Morges, near Lausanne.

The facility will be responsible for Biosite’s sales, marketing and customer support activities.

“Multilingual Switzerland gives us a ‘neutral’ image – it is more multilingual than other countries and facilitates building cross-border business,” said Gary King, vice president of international operations for Biosite. “The Swiss tax regime is decidedly business-friendly and the country’s quality of life makes it easy to attract talent from other locations.”

The company selected Switzerland for other reasons, as well, including its proximity by express trains to Geneva’s international airport.

Life Sciences Companies Choose Spain’s Catalonia Region

Catalonia is know for its research groups in hospitals and universities and its infrastructures, including the Barcelona Science Park, the Biomedical Research Park and Biocampus.

The pharmaceutical industry has traditionally been one of Catalonia’s strongest industries. For many decades, it has held firm footing in the sector compared to Spain as a whole. In fact, most of Spain’s pharmaceutical activities take place in Catalonia, where 50 percent of the pharmaceutical laboratories in Spain are located, 60 percent of turnover is produced and 66 percent of companies working in fine chemistry are to be found.

The four largest pharmaceutical companies in Spain — Almirall Prodesfarma, Esteve, Ferrer Internacional and Uriach — are currently based in Catalonia. In 2005, these four companies spent more than 152 million euros on research and development.

This tradition and activity has attracted major foreign investments to the region, including seven of world’s ten main pharmaceutical companies: Pfizer, Bristol-Myers Squibb, Merck, Sanofi Aventis, Novartis, GlaxoSmithKline and the Roche Group.

Most of the 200-plus companies that make up the biotechnology sector in Catalonia have been established during the past five years.

The recent creation of the Bioregion of Catalonia, a joint project between the administration, public research and development institutions, and businesses in the sector, is a new regional development model whose mission is to consolidate the biotechnology sector.

Its aim is to focus on the strategic development of scientific and industrial infrastructures, and to establish relations between investors and innovators in Catalonia that will benefit both parties. Its work specifically addresses biomedical and biotechnological research in the region in an attempt to create an environment conducive to knowledge and technology transfer. It is expected that this will serve to make an overall contribution to the development and commercialization of innovative biotechnology products and to consolidate a strong business sector.

In addition, Barcelona Science Park and Madrid Science Park have signed collaboration agreements with the employers’ association of the biotech sector ASEBIO. These agreements will allow new biotech enterprises in these parks access to services and participation in the association under more favorable conditions, said Cristina Garmendia, president of ASEBIO.

“The objective is that new business projects share experiences with more consolidated companies, improve their network of contacts and benefit from the services that ASEBIO provides to its members, among these the participation of eight work groups,” Garmendia said.

Barcelona and Madrid are the focal points of the development of new biotech initiatives and also host two of the most important science parks in Spain, said Fernando Albericio, director of the Barcelona Science Park.

“Through this collaboration, the parks will increase the quality of the services provided to biotech enterprises and new biomedical initiatives, thereby ensuring that from their set-up business development is done in close contact with leaders in their sectors, which without a doubt will determine their viability and success,” he said.

Cutting-Edge Competition

In the global pursuit of biotech innovation, competition is fierce but collaboration on many levels is also critical. Acquisitions offer one method by which companies can interlock their resources.

Such was the case for France-based Naturex, which recently announced its acquisition of Italy-based Hammer Pharma. Based in Milan, Hammer Pharma specializes in the research and development and production of plant extracts for the pharmaceutical and nutraceutical industries.

The business venture represents a new area of development for Naturex.

“As Hammer Pharma is ideally located at the heart of one of Europe’s key industrial zones, the acquisition affords Naturex another strategic location,” said Jacques Dikansky, CEO of Naturex. “It will reinforce [our] positioning on the German and Italian markets, which rank amongst the highest in Europe and in which Hammer Pharma is a player.”

For other companies, collaboration occurs thanks to a fusion of academic infrastructure and research assets.

With its sophisticated groundwork of educational institutions and intellectual capital, the Czech Republic is home to developments in the areas of immunology, rheumatology and medical chemistry.

A recent example of industry collaboration came in mid-2006 when researchers at the International Clinical Research Center (ICRC) in Brno, Czech Republic, said it would combine forces with the Mayo Clinic in Rochester, Minn.

The entities’ mission is to introduce a clinical and research educational center that meets the challenges of research.

Another recent collaborative effort in Scotland will result in a technological capability that does not exist elsewhere in the world.

Through Scotland’s new publicly funded and commercially driven $18 million research and development ITI Life Sciences program, researchers plan to develop an automated process to produce high-quality human stem cells.

The three-year program will bring together the expertise of Swedish biotech company Cellartis AB and Scotland’s University of Glasgow.

“This very important collaboration is in line with out strategic goal of scaling up our human embryonic stem cell technology,” said Mats Lundwall, CEO of Gothenburg, Sweden-based Cellartis. “Life sciences research in Scotland, particularly in the stem cell area, is recognized internationally and by establishing a research base in Scotland, we hope to contribute to the growth of this sector while expanding our own business and operations in Scotland.”

In the big scheme of things, the life sciences industry is truly still in its infancy. Much remains to be discovered, researched and developed.

According to Hodgson, the outlook for Europe’s life sciences industry is good.

“The United States has a huge lead at present in terms of the commercial status and presence of the companies that are involved in the current generation of biopharmaceuticals,” Hodgson said. “However, biopharma is just the tip of the iceberg when its comes to the healthcare revolution. It isn’t too late for Europe to catch up, because we are all at the very start of the game.”