Last week I enjoyed the BIO-Europe spring 2017 conference in Barcelona. This 3-day event hosted with 120 company presentations with more than 12,500 one-to-one meetings which attracted representative’s from over 1,400 companies within the biotech, pharma and finance segments sector. There are worse things in life than attending this excellent biotech conference in the ‘beach city’ Barcelona!
— Biocat (@biocat_en) March 17, 2017
The 11th International Partnering Conference was organized by the EBD Group, and co-hosted by BIOCAT. BIOCAT is the organization that coordinates and promotes the health and life sciences sector in Catalonia. In his opening speech, CEO Albert Barberà, introduced Barcelona as one of the most vibrant life sciences hubs in Europe. This urged me to browse the internet for some more information and I found out that:
1. The Catalonia region is ranked fourth among European countries in terms of biotechnology and second in the European Research Area in grants per million inhabitants
2. Catalonia has more pharmaceutical companies per capita than any country in Europe, except Belgium
3. Catalonia will be Southern Europe’s most attractive region for foreign investment according to a recent report
I have been in love with Catalonia and the city of Barcelona for a long time because of its beautiful landscapes, the nature, the sea, the food, and the weather. To this list, I can now also add its dynamic healthcare and life science ecosystem!
Another speaker during the welcome session was David Thomas, the Director of Industry, Research and Analysis at the Biotechnology Innovation Organization (BIO). He summarized some facts and figures on biotech’s performance in 2016 in comparison to 2015. In one slide (see figure), he highlighted biotechnology funding and deal making across five areas: venture capital, IPOs, follow-on public offerings, licensing, and acquisitions.
Some explanations for the non-financial experts amongst us:
- Venture capital: is financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.
- Initial Public Offering (IPO): is the first time that the stock of a private company is offered to the public.
- Follow-on public offering (FPO): is an issuing of shares to investors by a public company that is already listed on an exchange. FPOs are popular methods for companies to raise additional equity capital in the capital markets through a stock issue.
- Licensing: A business arrangement in which one company gives another company permission to manufacture its product for a specified payment
- Acquisition: is a corporate action in which a company buys another firm’s ownership stakes to assume control of it. An acquisition occurs when a buying company obtains more than 50% ownership in a target company.
David Thomas explained that the biotech industry has grown massively over the past few years with a record breaking year in 2015, but that appears to have slowed down. In 2016, R&D-stage financing and deal making has gone down both in the US (blue) and Europe (orange).
There is no macro-economic cause for this, but political, regulatory, and social disruption have added complexity to the biotech sector. Think about the election of president Trump, Brexit, but also drug-price anger, science skepticism, and policies to close borders and protect jobs.
Biotech industry has grown massively over the past few years with a record breaking year in 2015, but that appears to have slowed down. In 2016, R&D-stage financing and deal making has gone down both in the US and Europe.
Although 2016 has been the worst financial year for biotech in a decade, David Thomas pointed out that each category also has some silver linings with a respectable amount of activity. Examples are Pfizer’s acquisition of Medivation, Astellas’ acquisition of Ganymed, an increase in preclinical-stage upfront payments, many deals in the field of immuno-oncology. Moreover, 2017 is expected to be a more favorable year already. The atmosphere at the Bio-Europe Spring meeting shows that the industry is very much alive and reaching for the stars!