A Nation as a Biotech Cluster


Switzerland is home to some of the world's leading pharmaceutical companies and a rapidly growing number of innovative smaller and start-up companies. Its strong research base, highly educated workforce and close relationship with the EU all help to make it an attractive location. “Anchored by the world-class research of domestic multi-nationals such as Novartis, Roche, Serono and Syngenta, the Swiss biotech industry is among the largest and most diversified in Europe,” notes Dr. Reinhard Glück, CSO of Berna-Biotech and president of the Swiss Biotech Association.

This enviable position is reinforced by cutting-edge research carried out in a large and growing network of small and medium-sized biotech companies throughout the country. Switzerland with about 7.1 million people inhabiting some 40,000 square kilometres has developed into a serious player of biotechnology over the past few years. Switzerland has always been a good location for European business development. The country's mixture of cultures and languages means that an outward-looking approach to business comes naturally. In addition to the population's language skills, there is a company-friendly infrastructure and regulatory base. Switzerland is also known for short product registration cycles and easy access to markets for medical devices and innovative drugs. Market entry is facilitated through the Swiss agency for therapeutic products, Swissmedic, the centre of competence for the approval process of the pharmaceutical industry. Swissmedic is responsible for the authorization and market monitoring of pharmaceuticals and grants licences for manufacturing, wholesale and retail operations.
Enviable Tax Environment
“The tax environment is a key factor in deciding on a business location. Switzerland offers a favourable tax environment with moderate overall taxation. The average rate of corporate tax on profits was 24.5% last year, one of the lowest in Europe,” states Martin Howald, CEO of BioConcept and Member of the Board of the Swiss Biotech Association. The fair and stable tax system provides competitive advantages.
Switzerland has one of the world's highest levels of research expenditure, at 2.6% of GDP, having spent CHF8 billion (a5.3 billion) in 2004. Innovation is promoted by the Commission for Technology & Innovation (KTI/CTI), which is funded by the Federal Office for Professional Education & Technology (OPET). Promoting innovation is the leitmotif of OPET. As far as biotechnology is concerned, Switzerland offers fertile ground for R&D and the subsequent formation of promising biotech companies. It has a wide and competent scientific network based on prestigious institutes of higher education and both world-scale companies and innovative smaller enterprises. The industrial biotech sector has created some 7,000 to 8,000 jobs and the number is growing. KTI/CTI wants to speed up the transition from science to market, exploiting the high potential in scientific expertise and commercialization capacity that can be found in the country. KTI/CTI has various industry and technology focuses. Of most relevance are: KTI/CTI Life Science Funds innovative projects carried out by higher education in cooperation with industrial partners eager to exploit the results and contribute to the growth of the sector. KTI/CTI funds half of the project costs in the form of project contributions to employees of the academic partner. The remaining costs are borne by the industrial partners.
Optimization of Technology Transfer
KTI/CTI Biotech promotes the Swiss biotech industry by further optimization of know-how and technology transfer, facilitates and optimizes the economic exploitation of innovative techniques and products emerging from basic and application-oriented biotech R&D. “A good example of a successful biotech start-up is Prionics”, winner of the European Biotechnica award in September 2004, notes Prof. Dr. Oreste Ghisalba, Member of the Board of the Swiss Biotech Association. “In 1996, the University of Zurich launched a research project financed by the Swiss National Fund. The objective was to develop a rapid test for Bovine Spongiform Ence phalopathy (BSE) - a challenge for Bruno Oesch's research team. They successfully developed a prototype for a rapid and reliable test. Armed with an exclusive licence, Oesch, Markus Moser and Carsten Korth founded Prionics as a spin-off company.” Today Prionics is a world leader in fast and reliable BSE tests and employs more than 100 people.
Academic Structure
The academic structure of the country reflects the federal system of government. The two federal institutes of technology in Zurich (ETH Zurich) and Lausanne (EPF Lausanne) and the research institutions PSI, WSL, EMPA and EAWAG ensure that the institutes play a leading role in basic and applied research, teaching, innovation and services in the public sector. These institutions also achieve world-class results in the promising, future-oriented disciplines of life sciences, nanotechnology and communications technology. The universities are funded by the 26 Swiss cantons. Not every canton has its own university, mainly because of historical developments or the short distances between the universities. The universities vary in size and in their faculty programmes. The universities of Basel, Bern, Geneva, Fribourg Lausanne, Neuchâtel and Zurich offer extensive curricula in life sciences, medicine and biotechnology. Five universities of applied sciences are today more active than ever in the field of biotechnology and enjoy close integration with the universities and federal institutes of technology. This results in a better vertical technology transfer programme and faster product innovation cycles. The universities of applied sciences work together through BioteCHnet, a competence network between the Universities of Applied Sciences.
Sources of Finance
The Swiss financial community has responded as the biotech sector has grown. The past four years have seen the creation of a number of funds focusing on private equity and venture capital financing. Many explicitly seek opportunities in the life sciences. Although the financial community is prudent with investments in economically difficult times, the financing sector remains strong. With more than 40 venture capital firms and sector-specific investment funds, Switzerland offers an excellent climate for biotechnology and other life science companies. Venture capital specialists note that a number of companies are attractive for investors, including Actelion, Basilea, Berna and Cytos in the public sector and Arpida, Prionics, Glycart and Debiopharm in the private sector. With 133 private and seven public companies, Switzerland has the highest number of biotech companies per capita in Europe and the Swiss biotech industry has the second highest valuation in Europe, after the UK's (April 2004). The financial community has rewarded the generally high quality of Swiss biotech industry over the past years by considerably and constantly investing into companies with promising projects under way. In its recent Swiss Biotech report, Ernst & Young notes that even in difficult investment times, significant amounts of venture capital has been invested in Swiss biotech companies - CHF106 million in 2001, CHF132 million in 2002, CHF125 million in 2003 and CHF194 million in 2004. The report was produced jointly with KTI/CTI, the State Secretariat for Economic Affairs (seco), SWX and Swiss Biotech.
The Swiss Private Equity & Corporate Finance Association (SECA) is the representative body for Switzerland's private equity, venture capital and corporate finance industries, with about 200 members. SECA aims at promoting private equity and corporate finance activities in Switzerland. Private equity refers to equity investments in privately held, non-quoted companies. Corporate finance services are advisory services related to mergers, acquisitions, buyouts and the financing of companies. Members of SECA include equity investment companies, banks, corporate finance advisers, auditing companies, management consultants and private investors.
Going Public
A stock market listing in Switzerland is highly attractive. The SWX Group, already home to the shares of a host of Swiss blue-chip life-science companies, such as Roche, Novartis, Serono and Nestlé, is also a very alluring marketplace for other public companies. Listed companies benefit from the influential role played by institutional investors and the substantial presence of foreign participants. The SWX Swiss Exchange provides innovative international companies with access to the Swiss capital market. A public offering in one of its segments affords issuing companies a high degree of global visibility among investors, especially those with a heightened interest in specific sectors. An IPO in Switzerland is an attractive means of obtaining equity financing, especially for companies in medtech, biotech, pharmaceutics and micro- and nanotechnology. The most recent successful IPO was executed at the Swiss Exchange in mid-September 2004. Medtech company Ypsomed of Burgdorf, Bern, with more than 700 employees, issued 3 million to 3.3 million shares, raising more than CHF220 million. The listing requirements of the SWX's various market segments and their requirements for maintenance of listing are designed to meet the needs of both investors and issuers. While the legal requirements for initial public offerings reflect European standards, listing costs in Switzerland are well below the international average. In the Swiss financial marketplace, it takes less of an effort to attract investors. Communication is much easier in small geographical areas. The biotech companies Arpida and Speedel announced recently that they are planning an IPO soon.



Bern - More than 25 experts from industry, academia and national funding agencies attended the workshop " Cleantech by Biotech - Exploiting the Value of Industrial Biotech in Chemistry and Materials Processing“ aimed at...



Zurich – Pharmacists from the Swiss Federal Institute of Technology in Zurich have found a new way to treat chronic skin inflammation such as psoriasi (J. Exp. Med). In a mouse model for chronic cutanous inflammation, all...



Basel – Swiss vaccine developer Okairos has completed Series B private financing round totalling EUR16 million. The company stated that funds will be used to advance the company’s pipeline of prophylactic and therapeutic vaccines...



Zurich – Tecan has sold subsidiary Remp AG to US-specialist Nexus Biosystems Inc. for CHF12m (EUR9.4m). Remp was in charge of all of the activities involved in Tecan’s sample management business segment. In parallel with the...



Geneva - Allosteric modulation specialist Addex Pharmaceuticals Ltd has observed efficacy of its oral pre-clincal drug candidate mGluR2 NAM in a model of Alzheimer's disease. The allosteric compound specifically inhibits...



Lausanne – Cells present in the thymus can be reprogrammed to form skin stem cells without any need for genetic manipulation, according to a research group headed by Yann Barrandon (Ecole Polytechnique Fédérale Lausanne). When...



The US Food and Drug Administration (FDA) is having to be vigilant on new fronts. The agency has given Novartis a ticking off for its behaviour on the world's largest social network, Facebook. The Swiss drugmaker apparently...

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