Biotech Boom in Europe's BioValley

The BioValley of Alsace, the Northwest of Switzerland and the Southwest of Germany is one of the fastest-growing biotechnology regions in Europe. Even before the BioValley project began, there were more than 300 life sciences companies and institutions, including two global players, 40 private and university institutions and four universities in the region.

The vision of the BioValley was conceived in 1996 by the entrepreneur Georg H. Endress in the wake of the merger between Ciba and Sandoz to form Novartis and the consequent loss of 3000 jobs in the life sciences. Endress saw that a horizontal network of equal partners in the region would produce more jobs. No new structures had to be built, it was simply the coming together of scientists, entrepreneurs, politicians, banks and venture capital companies from this region of Europe. This led to a boom in creativity and innovation.

As Dr Endress (left) puts it, “It is not from a combination of entities which are essentially the same that (positive) chaos and thus new ideas are formed, but it's the bringing together of widely differing elements that fosters innovation. Different mentalities, languages, and disciplines bring about a cross-pollination that bears new fruit, as we have seen for example in the shape of more than 80 new biotech companies starting up in the last three years”.

BioValley - Why is it the new center for life sciences?

It is widely felt that the unique asset of the BioValley is its exceptional quality of life at the heart of Europe, which links a heritage of vineyards, forests and ancient history with top molecular biology and several Nobel Prize winners in medicine, chemistry and physics. But this is only part of the truth. Entrepreneurs are not so easily seduced. They will look first at the hard facts. And these too show the BioValley region in a very positive light:

Powerful science base with world-wide recognition

There is a large and solid base for life sciences within the BioValley region. This base encompasses more than 10,000 researchers in the various universities, namely Strasbourg and Mulhouse in France, Freiburg in Germany and Basel in Switzerland. centers of scientific excellence include immunology, neurosciences, transplantation, oncology, nanosciences, plant biology, agrochemistry and pharmaceutical basic research.

Strasbourg has a strong background in molecular biology. For example Pierre Chambon's Institut de Genetique et de biologie molecularie et cellulaire.

The University in Freiburg recently opened its center for Applied Biosciences (ZAB), where Ralf Reski leads a DM30 million joint research programme on plant biotechnology in collaboration with BASF, a global player in life sciences. Another center of excellence is the University Clinic of Freiburg with its departments of tumour biology and tissue engineering. The university's latest spin-off is BioTissue Technologies - a company set up to market tissue engineering products. The University of Basel is home to the world-renowned Biozentrum, where Prof. W. Arber did his Nobel Prize-winning research. The Biozentrum has achieved a world-wide reputation as a leading research institution for molecular biology: Life science research enjoys a stimulating environment in the Upper Rhine Valley. For 10 years the regional universities have collaborated in a confederation called EUCOR (European Confederation of Upper Rhine Universities). Its trinational study curriculum in biotechnology concentrates on fundamental and applied research in molecular and cellular biology.”

One research focus for the Biozentrum over the next 10 years will be neuroscience. The recent trinational founding of Neurex - a network for applied and basic research supported by Biovalley - has created one of the most important networks in neurosciences, comprising more than 1000 scientists from universities, clinics and industry. For more information please see www.neurex.org

One research focus for the Biozentrum over the next 10 years will be neuroscience. The recent trinational founding of Neurex - a network for applied and basic research supported by Biovalley - has created one of the most important networks in neurosciences, comprising more than 1000 scientists from universities, clinics and industry (for more information see www.neurex.org). Two more famous institutes are located in Basel - the Friedrich-Miescher Institute (Novartis), which is doing research in plant biology, and the Basel Institute for Immunology (Roche). In addition, the region has more than 40 research institutes, all of which attract young scientists from all over the world for doctoral or postdoctoral research.

Today, the BioValley area is home to the headquarters of five global players in the life sciences - Aventis, Ciba Specialty Chemicals, Clariant, Novartis, and Roche.The forthcoming merger of the Novartis and Astra-Zeneca agribusiness divisions to form Syngenta will bring the number to six. And the region also hosts research labs and production facilities for other important companies, such as Sanofi-Synthélabo, Pharmacia-Upjohn, Eli Lilly or Du Pont.

Networking of biotechnology companies

Rapid growth in the BioValley also comes from the networking activities of the biotech companies themselves. The virtual company Myocontract, dedicated to neuromuscular diseases, was formed as a collaboration between a German, Swiss and a French company. According to Ulrich Birsner, Chairman of the Board of Genescan Europe:

“BioValley has the necessary resources to become one of the world's most important regions in biotechnology. It is relatively easy to get specialists for most scientific projects. For example, our biochip projects required scientists to be brought together from the areas of measurement instrumentation and microsystems as well as molecular biology."”

Today, the BioValley area is home to the headquarters of five global players in the life sciences - Aventis, Ciba Specialty Chemicals, Clariant, Novartis, and Roche.The forthcoming merger of the Novartis and Astra-Zeneca agribusiness divisions to form Syngenta will bring the number to six. And the region also hosts research labs and production facilities for other important companies, such as Sanofi-Synthélabo, Pharmacia-Upjohn, Eli Lilly or Du Pont.

Being situated in the BioValley means being very close to potential clients. The BioValley organisation is a perfect platform to introduce our company and provides us with important contacts”. The availability of suppliers and services is also an essential asset for the global players in the region: Roche is currently building the world's largest Vitamin B2 fermentation plant in the BioValley with an investment volume of DM130 million.

High entrepreneurial potential for start-ups

Even though the growth rate of biotech start-ups is already currently running at somewhere between 20 to 30 new firms per year in the BioValley, the region still harbours enormous untapped potential for the creation of new life science companies. Dr Henri B. Meier, chief finance officer of Roche, says “This region has an unique substrate of entrepreneurs and scientists which will help to foster a new biotechnology research industry.” J F Carmier, Vice President of Transgène (F) concurs. "The lower Rhine region has enormous potential and I am convinced that BioValley will spread the taste for entrepreneurship and encourage risk taking in order to transform that potential into reality.”

One source of this potential is to be found in the universities and public research institutes. Technology transfer offices help to establish start-up companies. Pharmapass, Neurofit, Prestwick, Entomed, SynthE163 for example started off as laboratories of the Louis Pasteur University in Strasbourg. Neurofit, working on experimental and clinical neurosciences began in 1996.

Its director, Monsieur Gouillon, believes that “The BioValley gives high visibility and credibility to the development of Biotechnology in this region. For us it was also helpful in building up contacts to other laboratories outside of this region.”

EntoMed - an emerging research company founded by J Hoffmann from CNRS - has established a significant number of research collaborations “benefiting from the concentration of first-class scientific teams in the BioValley.”

The BioValley has already spawned large life sciences companies such as Actelion and Gene Data in Basel. These start-ups are often very business-driven and set out with a highly professional approach to management. The growing number of these biotech start-ups is contributing to the ongoing creation of a region with one of the highest densities of life sciences companies in the world.

Access to venture capital in the BioValley

“As a result of the BioValley project, the local pharmaceutical industry was able to offer employees the opportunity of establishing start-up firms to develop research projects on their own”, says Rolf Studer, investment manager at New Medical Technologies (CH) “This is a big chance for start-ups,” he points out. “A small to medium-sized biotech company can live well on a US$ 50 million drug”. Actelion (CH), for example, was set up in December 1997 by four former Roche scientists who started by licensing two drugs from Roche in 1998. Both drugs are now in the final phase of development, and the company is planning to announce an initial public offering (IPO) later this year. These new-generation biopharmaceutical firms are holding on to innovations until they can command a US$ 40-60 million partnering deal. This is possible thanks to the relatively easy access to venture capital in the BioValley. Four new venture capital companies have established headquarters here in the last five years: The Biomedicine Group was founded in 1998 and has invested CHF100 million into one public and 12 private equity biotech companies of which four have announced their IPO this year. New Medical Technologies (NMT) set up a fund in 1997 for health sciences companies. Sixty percent of its CHF150 million (US$101 million) is intended for start-ups in Switzerland and neighbouring countries. The Novartis Venture Fund was set up in 1997 and manages CHF100 Million. Valley Invest (CH), a venture capital company dedicated to life science companies, is now being set up.

Strong trinational political support

The BioValley project would not have been possible without strong political support. Funding of the BioValley project was borne by the EU on the one hand and the member regions (CH/F/D) on the other. To smooth the way for start-up companies, technology parks with state-of-the-art infrastructure are available in all three regions: The Biotech Park Freiburg is being extended and offers favourable start-up conditions on its 28,000 m2 site. The Parc d'Innovation Illkirch, Strasbourg Technopôle covers an area of 170,000 m2 for a wide variety of high-tech fields. The Innovation Center in Allschwil/Basel, offers 26,000 m2. In Lürrach, a new Innovation center has just started and will be geared to biotech and software. At the Ecole Supérieur de Biotechnologie, which offers a trinational biotechnological training, a “Bioincubator” is to be opened by the year 2001.

The BioValley Promotional Organisation

The BioValley was conceived as a lightweight structure built mainly on the networking of the parties involved but administrative factors have led to relationships being more formalised. So in 1998 a Central Association and three individual national associations were legally established as non-profit organisations. A trinational BioValley Promotion Team acts as a catalyst for the networking of the dynamic forces in BioValley. Each participating country is represented in the BioValley Promotion Team by five people, each of whom comes from a specific field: trade promotion, academia, technology transfer, and business. A Secretary General acts as co-ordinator. The Promotion Team has been the driving force behind various activities and services:

  • The most important instruments are dialogue and the meeting of minds. To this end, regular round tables of the Biotech SME's and university representatives are held.

  • A BioValley Guide lists all life science companies and research institutions working in the region.

  • Potential start-up companies can call on expertise and financial support in the seeding phase.

  • A BioValley University Award Program has been established to promote cross-border projects

  • The BioValley home page and the BioValley Newsletter, a journal which is published every two months, provide information on everything you need to know about the region (delivered free of charge on request from pressoffice@biovalley.com)

A unified communications strategy has been developed, and a press office has been set up with responsibility for media information.

This networking of existing structures offers a new approach to the stimulation of economic growth. An important pillar of this model is the inclusion of non-specialist people. Only broad acceptance of new technologies by the public at large can lead to long-term economic success. The BioValley Promotion Team organises public forums, guided by the humanistic principle of tolerance and respect for dissenting views.

The members of the Promotion Team sum up the mission and success of the first years of BioValley: “We have come a long way in three years and the networking has provided excellent results: The readiness to take part in cross-border and multicultural collaborative projects in the three countries of the Upper Rhine is blossoming. The many new start-up companies encourage others to form their own small enterprises. The public acceptance of biotechnology is growing as the result of a serious and constructive dialogue between its opponents and advocates. The BioValley not only promises economic success, but also generates momentum for socio-political developments. All in all, we are well under way to form a European trinational region of excellence in life sciences and gaining global recognition.