Before the pandemic, Life Science had a lot of challenges to overcome. On the one hand, capital in Europe was scarce compared to the United States and China. On the other hand, the European market was fragmented with particular challenges.
The pandemic has drawn a lot of attention on the Industry globally as scientists helped in all areas to overcome the challenges caused by the novel coronavirus. The speed at which novel diagnostics, vaccines, digital health solutions, and therapeutics were developed was astounding.
Similarly, the speed at which capital was flowing to the life science sector was mesmerizing for public and private funds.
During the last 18 months, I asked myself often the question
Is this a short-lived moment in time, or will it have a lasting effect?
The study by Phystech Ventures
But let’s face reality the U.S. is leading investments 3:1 over Europe, and still, the U.K. is front-running the entire continent.
McKinsey digs deeper into Biotech.
Capital availability is growing. Biotech funding continues to grow at a record rate from both public and private sources. Global venture-capital funding and deals reached their highest ever level of $36.6 billion in 2020, and the amount of capital raised during IPOs in 2020 ($28.7 billion) was more than twice the amount raised in 2019 ($11.8 billion) (Exhibit 1). Some biotechs are also exploring a nascent form of funding: special-purpose acquisition companies (SPACs).
Luckily the funding gap is closing; from the 60 billion mentioned in the Phystech Ventures Study, about 37 billion seem to be allocated in Biotech projects.
But what about the perception of the Pharma Industry? As far as I remember, most of the time, when I mentioned that I work in Pharma, almost nobody was interested. When I stated that I love supporting drug development projects, I had to explain what precisely that is most of the time.
McKinsey found that this changed in 2020:
Industry recognition is increasing. The world has lived through a time of mass education in science research and development because of the COVID-19 pandemic. Public perceptions of the pharma industry have improved, with more than half (54 percent) of respondents to a recent US survey rating it positively, for instance, compared with less than a third (32 percent) before the pandemic.1 Similarly, McKinsey’s industry interviews and analysis of online search data reveal that awareness of the biotech industry has improved since the pandemic, as has pharma brand recognition.
It all seems to point in the right direction, but there are also a few things to look at:
Even though Europe is producing world-class science and leading in the number of publications as well as playing at the top of the field in patents, there is still one particular problem that has many challenges:
Translation remains a challenge. When it comes to transforming research into a pipeline of new medicines, growth has been stagnant over the past six years. Europe scored 0.8 on the translation index—lower than both the United States, with 2.0, and China, with 1.1—and its share of newly funded biotechs represented only a quarter of the total number. Early-stage funding for European biotechs has grown by 13 percent CAGR, but are well below the United States, at 17 percent, and China, at 18 percent—an indication that the gap in early funding is widening (Exhibit 4). With European biotechs, founders, and investors continuing to focus on their home markets, biotechs seeking access to large early rounds of funding may need to involve more investors from outside the region.
Putting it into a picture, McKinsey sums the problematic area up as follows:
According to the consultancy, the major problem in that area is a lack of funding. But is that so?
To gain more insights, I invited Tech Transfer Expert Dr. Saara Inkinen to a conversation to find out how the situation in this area is in Europe and what she thinks the future will look like.
The Speaker - Dr. Saara Inkinen
Dr. Inkinen is a technology transfer and innovation management specialist based in Vienna, Austria. She originally came from Finland and had her first position in the chemical industry already in 2000. Since 2005, she has worked with industry-focused R&D, technology transfer, innovation management, funding, and strategic initiatives in an international environment.
Dr. Inkinen is passionate about accelerating the development and commercialization of scientific technologies, and it is her mission to facilitate the transfer of research to business. She is a strong networker and has, for example, founded the Finnovation Champions technology transfer network in Finland in 2012. What ultimately motivates her in technology transfer and innovation management is the positive environmental, social, and societal impact that new technologies can help us create.
For more details on Dr. Inkinen’s education and professional experience, please have a look at her LinkedIn profile.
Her Company - Nordic Catalyst
Nordic Catalyst is a technology transfer and innovation management company founded by Dr. Saara Inkinen in 2018. Nordic Catalyst is located in Austria, and it works with an international client base consisting of both research organizations and companies.
Do you want to learn more about the European Life Science Industry, Nordic Catalyst, and the situation of Tech TransferEurope?
Then join our conversation:
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Did you know that the successful pipeline of one of the most important pharmaceutical companies in the United States started in Europe, and scientists from Prague played a key role? Did you know that profound expertise in turning deep tech life science into a business, scale it, and go public in the U.S. can be found in Prague since the late 80s of the previous century?
If you want to know which U.S. pharmaceutical companies pipeline started in Prague, listen to this Episode Number 25. I am delighted to host an exceptional guest from one of the most beautiful cities in Europe. I will talk with Karel Kubias, from i&i in Prague.
Karel studied organic chemistry and photochemistry at T.H. Merseburg, Germany, and holds an MBA in Healthcare Management (Auburn University program).
He gained broad professional knowledge and skills during his 24 years in various management positions at the multinational chemical and pharmaceutical company Merck KGaA. Between 2006 – 2015, Karel worked in executive positions – first as Managing Director of Merck spol. s r.o.. Prague and then as Regional sales director for the region EEMEA (Eastern Europe, Middle East & Africa) of Merck Millipore division, where he acquired further experience on the international level. He now supports i&i Prague as Director for Partnerships and Strategic Alliances.
i&i Prague is accelerating the proof-of-concept stage of projects in the fields of Medtech, Diagnostics, and Drug discovery. The company focuses on the discovery, pre-seed, or seed phase, projects with excellent innovative potential, which will benefit from the project-launching experience and networking skills developed by IOCB Tech over the last decade. Furthermore, the financial support provided by i&i Prague should significantly increase the appeal and value of a project for further licensees and/ or investors.
Christian Soschner (https://www.linkedin.com/in/christiansoschner/)
Karel Kubias (https://www.linkedin.com/in/karelkubias/)
CS Life Science Invest (https://lnkd.in/eyhWK7H)
i&i Prague (https://www.linkedin.com/company/iniprague/)
IOCB Tech (https://www.linkedin.com/company/iocb-tto-s-r-o-/)
These companies make the community, this newsletter, and the LSG2G Podcast possible, so go check them out and thank them for their support!
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