The BioValley business model: From a high potential in basic research to the creation of new companies

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1 The BioValley business model: From a high potential in basic research to the creation of new companies OECD Workshop on basic research October 2001, Oslo, Norway Sylvie Schott-Reverberi

2 INTRODUCTION BIOTECHNOLOGY : WHERE SCIENCE MEETS BUSINESS

3 Definition: «Biotechnology is the use of living organisms with high technology tools, supported by highly innovative research, with the aim of producing / commercializing either products and or services». The Bio-industry: indissociable from intellectual & scientific excellence. The life science sector is among the outstanding industrial sectors of the new millennium.

4 OVERVIEW OF THE BIOTECHNOLOGY INDUSTRY IN EUROPE Evolution of the biotech sector in Europe Number of biotech companies per country Number of biotech companies in Europe & in the US

5 Number of Biotech Companies per Country Million Euros Number Employees Revenue of companies (in million of Euros) United Kingdom Germany France Switzerland Reste Europe Total Source : Ernst&Young "Life Sciences in France

700 786 France 240 4 500 757 Switzerland 110 5 600 1 313 Reste Europe 590 21 904

6 WHY ARE BIOTECHNOLOGIES CONSIDERED AS A NEW BUSINESS MODEL? (1) The American leadership : strong interconnection between networks of companies (big pharmas and biotech start-ups), financers from risk-capital and public research institutions : Í Easy access to risk-capital Í Facilities for technology transfer

companies (big pharmas and biotech start-ups), financers from risk-capital

7 WHY ARE BIOTECHNOLOGIES CONSIDERED AS A NEW BUSINESS MODEL? (2) The European mindshift : Í New entrepreneurial mindshift in the scientific community ; Í New facilities for the creation of start-ups (European and Governmental measures) Í Outsourcing of R&D programmes of the big pharmas (4% in % in 2000)

scientific community ; Í New facilities for the creation of start-ups

8 Events in Europe in 2000 l l l l l +16% of new biotech companies in Europe. The number of biotech companies in now higher in Europe than in the US. But the number of their employees are still 2.5 time higher. Very young industrial sector with 50% of the new companies created for less than 4 years. High growth in the numbers of pharmaceutical products under trial : + 40% between 99 and Revenue of the sector in Europe in 2000 : 6 billions Biotechnology is made of high scientific performance and will produce high economic added value in the next decades

Very young industrial sector with 50% of the new companies created for less than 4 years.

9 THE 3 KEY FACTORS OF SUCCESS TO MAKE SCIENCE MEETS BUSINESS l l l Companies which are world leaders in the field of biotechnology. High quality higher education and research establishments. Favourable economic climate and facilities for the creation of start-ups Ï SOCIAL NETWORK

High quality higher education and research establishments.

10 PART 1 The BioValley Social Network

11 I.I. The Initiative A tri-national life-sciences network located at the cross-border of France, Germany & Switzerland A network with more than 2,000 people representing over 500 companies, research institutions, technology transfer centers, public institutions for economic development, bankers, venture capital companies, services companies, suppliers,

500 companies, research institutions, technology transfer centers, public institutions

12 Prerequisites in the BioValley The Upper Rhine Valley : Alsace, South Baden, North- West Switzerland. Over 300 companies in the field of Life Sciences million inhabitants in the Upper Rhine Valley. 4 universities which together total some students.

Over 300 companies in the field of Life Sciences. 4.

13 Main objectives of the BioValley Speeding up technology transfer to boost the creation of biotech start-ups Becoming the most attractive European biotech region for new investments Promoting new alliances with international partners

Becoming the most attractive European biotech region for

14 History of the BioValley initiative LATE 80 s : George ENDRESS & Hans BRINER imagine the creation of a «Silicon Valley» dedicated to biotechnology in the Upper Rhine Region : Merger of CIBA SANDOZ into NOVARTIS More than 3000 highly qualified unemployed people Implementation of BioValley concept into a concrete initiative set up by the BioValley Promotion Team : BioValley obtains a budget of euros through the INTERREG II PROGRAMME of the European Union : Creation of the legal structures of BioValley : 3 national associations and 1 central tri-national association : Privatisation of the BioValley initiative

1996 : Merger of CIBA SANDOZ into NOVARTIS More than 3000 highly qualified unemployed people Implementation of BioValley concept into a concrete initiative set up

15 BioValley The network that provides the users with a package of services BioValley-Easy-Access System BioValley Guide (Yellow pages) Internet site BioValley Extranet and technology watch BioValley Roof for participation in trade-fairs and exhibitions (trinational presentations) BioValley Universities Partnership Programme with Award-Programme BioValley Stammtische Scientific and Partnering Conferences Continuing Education Programmes Meeting points (e.g. with capital providers)

com Internet site BioValley Extranet and technology watch BioValley Roof for participation in trade-fairs and exhibitions

16 PART 2 THE BIOVALLEY KEY FACTORS FOR SUCCESS

17 I- HIGH QUALITY HIGHER EDUCATION & RESEARCH ESTABLISHMENTS (1) The entire chain of activities in Life Sciences from basic molecular research to drug production is prominent in BioValley. BioValley has one of the highest densities of Life Sciences related research in the world, totaling more then scientists. In BioValley, more then scientists with a higher academic degree (MS, PhD) work in Life Sciences research in over 160 academic and/or public institutions and in over 400 research groups.

BioValley has one of the highest densities of Life Sciences related research in the world, totaling more then 15 000

18 HIGH QUALITY HIGHER EDUCATION & RESEARCH ESTABLISHMENTS (2) More than out of those scientists (60%) in public research in BioValley are active in Basic Research. Focus areas in public Life Sciences research institutions in BioValley are : Chemistry, Physics/Nanosciences, Genomics/Genetics, Neurosciences, Cell & Development Biology, Oncology, Immunology/Hematology, Pharmacology and Infectious Diseases. The quality of the scientific work is best demonstrated by the fact that, in the last 25 years, 5 Noble Prizes for research in Chemistry, Immunology and Genetics have been awarded to scientists working in BioValley. The combined state-of-the-art knowledge in chemistry and biology is a unique competitive advantage of BioValley in Life Sciences research.

Immunology/Hematology, Pharmacology and Infectious Diseases.

19 There are more scientists active in Basic Research in BioValley than in Applied Research. This reflects the main objective of publicly funded research namely to provide fundamental skills and knowledge for a wide variety of potential applications, rather than supporting specific applications-oriented needs.

This reflects the main objective of publicly funded research namely to

20 II - HIGH DENSITY OF WORLD LEADING LIFE SCIENCES COMPANIE & START-UPS

21 Main world-wide «Big Pharmas» represented in the BioValley area 8QLTXH(XURSHDQFOLQLFDOUHVHDUFKFHQWUH (XURSHDQUHVHDUFKFHQWUH

22 START-UPS 121 companies created from 1997 until 2000, 41 of them supported by the BioValley expertise fund France : 20 projects Euroclide MY 68 GeneScan France Prestwick Chemicals Sediag Synth E163 Bioclavis Proteogenix Phitools InOmics PolyPlus Transfection Neuro 3D Germany : 15 projects BioTissue Technologies Diarect AG Genovac Greenovation Myocontract Recovax Stürken VivaCell Switzerland : 6 projects OncoScore Screening Cnter DiaGene Swiss Transgene Mimetica Neutris

23 III - FAVORABLE ECONOMIC CONDITIONS lbiotech-parks in Allschwil (CH), Freiburg (D) and Illkirch-Strasbourg (F). lcreation of a BioValley Fund. leasy access to risk-capital companies in the 3 countries. lgovernmental support.

24 PART 3 The BioValley Business Model

25 1. Privatising BioValley Main Goal of the new structure : «wearing it self from governement support and becoming a self sustaining organization while at the same time continuing to promote the growth of life sciences companies and jobs» BioValley Central Association (Interreg III programme) Association Alsace BioValley BioValley Deutschland e.v. BioValley Platform Basel (F) (D) (CH) 51% 51% 51% x % BioValley Company Alsace BioValley Company BioValley Company Basel Deutschland 49% 49% 49% The BioValley Company AG

26 The BioValley Company AG : sustainability of the BioValley initiative. Trinational private holding company. Will coordinate the business activities in the 3 national BioValley companies. Interaction with the BioValley central association and the 3 national BioValley associations.

27 Missions of the BioValley Company AG Communication tools & strategy Organization of conferences and public debates Creation of technological plate-forms E-business services Start-ups coaching (business plan, marketing strategy, legal advices, industrial property) BioValley monographs Human resources management

28 Developing the creation of new companies & new jobs Phase 1 Phase 2 Phase 3a Phase 4 Phase 5 Detection of projects or skills relating to technology and worth promotion Promotion and pre-incubation Platform including funding for pre-start off phase Bio-incubators including starting off funds. Bio-nursery or biotech companies hotels including venture capital funds. Development of real estate projects specific to biotech companies. Actual or virtual common technological platform Phase 3 b Development of private/public Scientific partnership and/or transfers of technologies. Expected achievement : new firms (spin offs of public research institutions & big pharmas) to new jobs within 10 years.

The NEXT Biotechnology

Bernhard Fuhrer The NEXT Biotechnology Beyond the Attempts at Cloning Biotech Clusters Hamburg 2005 Table of Contents 1. Introduction 1 2. An explorative look at biotech clusters 9 2.1 Definition of biotechnology