Swiss biotechnology is growing despite the difficult climate
Zurich, 31 March 2009 – The Swiss biotech sector continued growing in 2008. Although risk capital proved harder to come by than in the record year of 2007, the sector nonetheless managed to expand by achieving higher sales, licensing new products and starting up new companies. These are the main findings of this year’s Swiss Biotech Report, which was presented today as part of ‘Swiss Equity biotech day’.
The latest figures suggest that the biotech sector remains a growth industry. For example, in 2008 Swiss biotech companies generated combined sales of more than CHF 8.7 billion, roughly 7% up on the previous year. Investments in research and development (R&D) by both private and listed companies also rose, totalling CHF 2,070 million (up from CHF 1,755 million in 2007), an increase of 18%.
Licences successfully obtained for new products
One of last year's positive developments was the licensing of various Swiss biotech products in various markets around the world. For instance, Santhera saw "Catena" approved for use in Canada, Basilea saw "Toctino" licensed in several EU countries and "Ceftobiprole" given the green light in Canada and Switzerland, and Nitec is about to launch "Lodotra" in 15 EU Member States. At the same time, there were also some setbacks, including for Santhera's "Catena" in Europe and Basilea's "Ceftobiprole" in the USA. According to Jürg Zürcher, Partner and Biotechnology Leader EMEIA at Ernst & Young, "this can mainly be attributed to higher risk awareness on the part of some licensing authorities. Nonetheless, all in all the sector can look back on a good year", he said.
The trend towards more start-ups of new Swiss biotech companies continued in 2008. There are now 229 biotech companies based in Switzerland (as against 220 in 2007), including 159 biotech development companies and 70 biotech suppliers. The main focus of Swiss biotech business is still on so-called "red" biotechnology, i.e. human and veterinary medicine.
Actelion's success story also reached a new highlight in 2008. In September Actelion was included in the Swiss Market Index (SMI®) and duly became the strongest performing SMI® share over the year as a whole (annual performance, January - December 2008: +14.12%). There was also some M&A activity to report, the biggest deal being Novartis' takeover of Speedel for a total price of more than CHF 1 billion.
Serious decline in the financing boom
At the same time, Swiss biotech companies have not altogether been spared the effects of the crisis on financial markets and economic turbulence in recent months, for it became harder to obtain risk capital or secure loans than in the record year of 2007. As a result, last year the Swiss biotech industry only raised capital totalling CHF 228 million, roughly 75% down on the figure for the record year 2007.
Nonetheless, the biotech sector still managed to attract some major injections of risk capital in the current difficult environment, including the financing of AC Immune (CHF 40 million), Synosia Therapeutics (CHF 32 million), GlycoVaxyn (CHF 25 million) and Nitec Pharma (CHF 24 million). Both foreign venture capital companies and Swiss investment houses were involved in these deals. "This proves the continuing appeal of the Swiss biotech sector to investors", argued Dr Yvonne Gunsch-Wegmann, Head of Issuer & Investor Relations, SIX Swiss Exchange.
Growth driven by a qualified workforce
The continuing success of Swiss biotech companies can be put down to the high quality of the training provided in Switzerland. Being a knowledge-based technology of the future, the fate of the biotech sector hinges on having highly qualified staff who are willing to work hard. Accordingly, human talent is once again a strong theme running through this year's update of the Swiss Biotech Report, which indicates that in a worldwide comparison Switzerland emerges as a very attractive place for top employees to work.
Moreover, joint initiatives by the government and industry are continually improving the situation regarding both the training of budding Swiss scientists and the recruitment of specialists from abroad. "The Swiss biotech sector has set up a number of job exchanges", said Domenico Alexakis, Director of the Swiss Biotech Association, "the hope being that this will enable us to meet the extensive personnel requirements of this booming sector in both the short and medium term".
The Swiss Biotech Report 2009 is published by the project partners Ernst & Young, SIX Swiss Exchange, the innovation promotion agency CTI, OSEC, the Swiss National Fund, the Swiss Institute for Intellectual Property, the national competence network for biotechnology biotechnet Switzerland, the Swiss technology Transfer Association swiTT and the Swiss Biotech Association, a national industrial union. Further support for the publication stems from five regional partners: BaselArea, the Berne Capital Area, Bioalps, Biopolo Ticino and the Greater Zurich Area.
About the Swiss Biotech Report
The Swiss Biotech Report is an annual publication about the biotech industry in Switzerland. It is published every second year as a full version. Every other year, a condensed version (Swiss Biotech Report Update) gives a short update on latest developments.
Swiss Biotech Report – Update 2009 (PDF, 1.37 MB)
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