Given the sheer amount of media coverage BioNTech and a handful of other EU biotechs have seen in recent months, it is fair to say the COVID-19 pandemic has raised the profile of the sector. Public interest in the contribution drug research companies make to societal health and well-being, as well as its value to the economy, has grown. The European Commission has put forward a calendar of policy initiatives for 2021, to strengthen the proposal to set up a biomedical research modelled on the US Biomedical Advanced Research and Development Authority. Within the industry itself, the need for more collaboration and broader communication has been validated. But questions remain about the durability of this buzz and what still needs to be done to build on this progress and facilitate additional growth.
In advance of BIO-Europe Spring® Digital 2021, we talked to conference attendees about recent changes in the sector and in their own companies to gain a glimpse of what the future might hold. As you would expect from this crowd, we got some very insightful answers and are happy to share them here.
“Attitudes are changing,” said Dr. Matthias Kromayer general partner at Munich-based venture capital investment firm MIG. Kromayer was addressing the cultural attitudes toward investment and risk in Europe – Germany in particular – which are often associated with the relatively small size of the sector compared to more established industries. “At least half-a-dozen factors are driving this,” he added. MIG, through its closed end funds, MIG Fonds, was a founding investor in BioNTech.
One important factor Kromayer sees contributing to cultural change in Europe regarding biotech innovation is a greater flexibility in career tracks and more fluidity between industry and academia. “It used to be that Germans wanted to be academics or work in industry exclusively,” he said.
“Now more scientists are feeling capable of entrepreneurial work. Academic institutions are moving away from licensing restrains and becoming more supportive of entrepreneurial activity. This may not result in a new Kendall Square but there will be more development here and across Europe. There will be larger companies and financing rounds. We will attract more talent,” he said.
Eva Prieschl-Grassauer, chief scientific officer of Austrian respiratory and allergy specialist Marinomed (VSE:MARI) agreed that attitudes and perceptions are changing. She credits this to the sector’s “fast reaction to the pandemic and focus on the development of vaccines”.
The speed and flexibility recently demonstrated by the sector has proven attractiveness for investors, Prieschl-Grassauer added. Marinomed is listed on the Vienna stock exchange and its share price has increased substantially over the last 12 months.
Marinomed takes on the pandemic with a therapeutic rather than a vaccine. The company’s OTC nasal spray Carragelose has shown 80% protection from COVID-19 infection in a RCT trial that was designed to protect healthcare workers, with a product that everyone can already buy in the pharmacy without needing a prescription.
“Of course, vaccines are important but additional prophylactics and therapeutic innovations are necessary to beat the pandemic,” she said.
Dror Ben-Asher, CEO of our Israeli and U.S.-based and NASDAQ-listed paying client RedHill Biopharma (NASDAQ:RDHL), a specialty pharma company with several gastroenterology and infectious disease drugs on the market as well as an advanced development pipeline, pointed out that the pandemic has presented a rare situation where the disease affects both those who have it and those who do not – albeit in different ways.
“We are all in this together,” he said. “The COVID-19 pandemic has clearly shown that there is a fundamental need for rapid and bold strategies to protect public health.”
RedHill is at the forefront of global research for novel COVID-19 therapies with two Phase 2/3-stage development programs of orally administered treatments. Together, the compounds cover a spectrum of disease severity including both hospitalized and non-hospitalized patients with the potential to tackle both existing and emerging mutations.
“RedHill has so far undertaken its development programs without governmental support and EU investment in securing the health of Europe is to be welcomed – and that investment should be timely and significant,” he said.
Dr. Cora Kaiser, Senior Director of Corporate Communications at Rentschler Biopharma said she thinks the COVID-19 pandemic has changed the way people, especially the general public, look at the biotech industry.
“I think our sector has not communicated the contribution we make to society and the opportunities we bring to the economy well enough,” she said. “We still focus too much on speaking to our peers and neglect the wider public, often simply because we have trouble finding easy explanations for what we do,” she emphasized.
Kaiser agreed that the pandemic has also paved the way for a new class of drugs - mRNA vaccines - with huge potential in other indications, such as cancer. As a CDMO, Rentschler Biopharma is “exploring the long-term opportunities of mRNA manufacturing,” she said.
Dr. Rainer Lichtenberger, CEO of Atriva Therapeutics, added: “COVID-19 has created an unprecedented increase in awareness for infectious diseases and especially viruses but that there is still a lot of work to be done.”
“The recent biotech success stories of BioNTech, CureVac, and others have demonstrated that biotech is the driving force for innovation,” he said. “These companies have taken a leading position in translating scientific innovation into urgently needed products - ahead of big pharma.”
Atriva is specialized in developing new therapies against severe respiratory viral infections with a high unmet medical need, such as influenza and COVID-19. Although investors rarely include infectious diseases in their portfolios, Atriva successfully completed its fundraising in 2020: €8.6 M in equity and a €24 M loan from the European Investment Bank.
Atriva and the other three members of the BEAT-COV initiative, Aicuris, InflaRx and Immunic, have confronted the public and political circles with the fact that significant public funds are needed to accelerate the development of therapies and their timely availability. Also, the initiative has pointed out that vaccines should never be the only line of defense against a virus.
“Vaccination is of uttermost importance and had been rightfully funded – but we also need funding for therapies to accelerate development in a way similar to that of the vaccines. SARS-CoV-2 most likely will not have been a one-time incidence. There will always be mutations of known viruses or completely new viruses appearing and we need effective means to conquer those,” he concluded.
Heinz Lubenau, CEO and co-founder of Swiss-German cancer immunotherapy specialist VAXIMM agrees that European biotech companies have demonstrated their value to both health care systems and the economy. He anticipates the appreciation will last. “In the light of the mutations, competition for effective medicines will continue and public awareness of the biotech sector will be maintained,” he said.
VAXIMM is developing an oral, bacteria-based DNA vaccine for the treatment of patients suffering from solid tumors. “We have seen an increased interest in investment,” Lubenau said. “With regard to speed of manufacturing and production costs we are in an excellent position compared to other technologies,” he added.
For Christian Pangratz, CEO of chronic inflammatory disease specialist sterna biologicals, the pandemic has opened the door to a higher level of interest in science originating in Germany and Europe more broadly.
“I think this is the beginning of a longer trend which will hopefully help close the wrongly perceived quality gap between science coming from the U.S. and Europe,” he said.
In 2020, sterna benefitted from an increased level of activity in the investment community as “many investors needed to allocate funds and were aggressively looking for high quality investment opportunities,” he underlined.
Denis Bedoret, CEO of Belgium’s autoimmune disease specialist Imcyse mentioned he thinks interest in biotech was starting to steadily increase even before the pandemic. “COVID-19 and the achievements of the industry have further encouraged this trend toward greater interest in biotech from industry partners, professional and non-professional investors,” he said.
“We are finding more and more companies approaching us for updates and expressing interest in our programs,” he said. “With this momentum, we are keen to extend our series B with an additional €10-15 M which would help us accelerate our existing programs and initiate new activities with an increased focus in the U.S.”
Overall, it appears that investors have become more sensitized to the impact research-based companies can have on economies and society at large in the face of devastating disease outbreaks. Not to mention how biotechnology and life sciences contribute to the modernization of European industry and medicine. The next step is to develop investment tools agile enough to respond to the next outbreaks before they happen.