How European biotech has emerged from the US shadow in the past quarter of a century.
In 1994, the European biotech sector was still in its infancy and struggling to raise the sums of money needed to build robust businesses. While many of the breakthroughs that underpinned biotechnology were discovered in Europe—most notably the creation of monoclonal antibodies—the continent lacked a critical mass of venture capital and what existed was more likely to be put to work in the US. The London Stock Exchange had only just modified its rules to enable entrepreneurial biotechs to complete initial public offerings and tap into the public markets.
One answer was to turn to the pharma majors for support. In the 1990s, pharma companies were much smaller than they are now. Indeed, at the start of the 1990s, Merck & Co was the world’s largest pharma company with revenues of $5.4bn, while Glaxo was Europe’s largest at $4.7bn. Many of them, especially in Europe, were just the drug arms of multinational chemical businesses. The focus until then had been to use synthetic chemistry to create new medicines.
Importantly, as the first generation of biotech drugs—recombinant human insulin, human growth hormone, tissue plasminogen activator and erythropoietin—were winning approval, pharma executives began to look more closely at biotechnology to fill their innovation deficits and started to hook up with the biotech upstarts.
Originally, in the early 1980s, when the US biotech sector began to make waves, the ambition was to create competitive fully integrated pharmaceutical companies (FIPCOs). By the mid-1990s, the FIPCO model was being usurped by a virtually integrated pharma co model which saw biotechs tap into other companies to provide expertise and resources. Big pharma had both the drug development and regulatory expertise and the financial muscle to support fledgling biotechs, while in return, the biotechs were able to provide pharma companies exposure to cutting edge bioscience discoveries.
In 1995, EBD Group, today part of Informa, launched BIO-Europe® in Hannover, Germany, to catalyze this pharma:biotech symbiosis, especially showcasing European opportunities. The first meeting attracted 97 delegates who conducted 60 company meetings. At the 2018 edition of BIO-Europe, held in Copenhagen, Denmark, more than 4,300 delegates conducted over 26,000 biopartnering meetings.
Since the first edition of BIO-Europe, the European biotech sector has matured beyond recognition. Science, technology and products developed by European biotech companies now underpins much of the global pharma industry. Pharmaceutical companies, through biopartnerships and acquisitions, are creating new precision medicines based on an enhanced understanding of the biological roots of disease. Humira, the world’s best-selling drug at $20bn a year, was first created in the laboratories of a UK biotech startup, Cambridge Antibody Technology. The next generation gene sequencing platform that transformed Illumina was originally developed by Solexa.
With biotech now delivering breakthrough drugs—many of which have transformed acute and often fatal diseases into chronic conditions—entrepreneurs now find investment capital more readily available. In 2018, European biotechs were able to raise $3.3bn from venture capitalists and other private sources and $7.6bn from public market and debt sources to support the next wave of innovation.
The upcoming edition of BIO-Europe, taking place in Hamburg, will commemorate the past 25 years, highlighting many of the key events that have shaped the industry and contemplate how we expect the sector to develop in the forthcoming years. As part of the celebration, we've published an e-book containing a number of articles and interviews from In Vivo, Scrip and Pink Sheet that highlight the evolution of the European biotech sector over the past quarter of a century. Look out for our interview with EBD’s founder Carola Schropp, as she reflects on BIO-Europe’s role in the development of European biotech, a timeline of key events that have shaped the sector, as well as a dip into the Informa Pharma Intelligence archive.
Mike Ward is currently head of content for the EBD Group and is the former global director of content for Pharma Intelligence’s Insights portfolio that includes Scrip, Pink Sheet and In Vivo. He is an award-winning commentator on the life sciences industry with 35 years of experience which included roles with BioCentury, BioBusiness, Nature Biotechnology and European Chemical News. He has also in the past been a contributor to The Economist Intelligence Unit and the Financial Times as well as industry reports published by EY, Deloitte and Arthur Andersen. He is a regular keynote speaker and moderator of panels at leading industry conferences.