Norway NavigatesFinance Bottleneck
In order to place itself on the biotech map, Norway has started a major international awareness campaign last year. Initiated by the country's three leading promoters of life science, the Norwegian BioIndustry Association (NBA), the Norwegian Research Council and the Norwegian Trade Council, the Life Sciences Norway campaign aims to capitalize on Norway's expertise - oncology, neuroscience and the new sector of marine biotech being the central themes - with a view to creating a viable economic sector. But where does Norway's biotechnology stand today and how does the Norwegian Bioindustry Association (NBA) support the sector? The NBA was established in autumn 2001 by representatives of the Norwegian biotechnological industries and the Confederation of Norwegian Business and Industry (NHO). It is an independent member organization with the purpose to promote the development of Norwegian biotechnological trade and research. EuroBiotechNews spoke with Odd Magne Rødseth, Chairman of NBA, about current activities and future goals.
Mr. Rødseth, what is the current state of the biotechnology industry in Norway?
Two major initiatives have been implemented to strengthen the science and knowledge base to support the biotechnology sector. One is functional genomics (FUGE) with annual allocations of NOK150 million - about Euro17,76 million. FUGE has two primary objectives: To raise the quality of Norwegian research in this area to international standards and to promote the Norwegian industrial development. FUGE encompasses three priority areas: Basic biological research including bioinformatics, marine research and medical research. Within each of these areas industrial development is a topic of main concern. The other main initiative was the launch of the “centres of exellence” programme including the Centre of Molecular Biology and Neuroscience at the University of Oslo, the International Centre of the Biology of Memory as well as the Salmon Genome project. This reflects a change in the funding strategy to provide fewer research projects with larger funding to be able to utilise our national advantages and to keep up with the international competition. The new research initiatives have prioritized development within neuroscience, immunology, oncology, marine biotechnology and the conduct of clinical trials.
Which biotechnology clusters are there in Norway?
The Norwegian biotech industry is mainly located around three clusters near the leading universities and research parks in Oslo, Bergen and Trondheim. In the Oslo area the industry is highly focused on healthcare and also constitutes a part of the MedCost Scandinavia cluster which encompasses the Gothenburg-Oslo area. Bergen is the center of marine research and aquaculture.
What are the Norwegian Bioindustry
Associations's goals for the near future?
The NBA has prioritized four areas - financing, tax incentives to invest in biotech R&D, a regulatory environment and industry competence. Firstly the financing includes governmental participation in early stage financing - a pre-seed fund to support “proof of concepts” and intellectual property rights (IPR).
Secondly, Norway has already introduced a refundable tax credit scheme which ensures that also companies with negative cash flow get money back from the government (skatteFUNN). NBA wants to build further on this platform, for instance by including extra incentives to target young innovative companies. Thirdly, there is the regulatory environment. As a non-EU member, its important for the NBA to promote a harmonization of the regulatory framework and to ensure competitiveness of the Norwegian industry. Finally, promoting industry competence comprises the establishing of systems which stimulate mobility between academia and industry. Another goal is to introduce a more business-focused culture at leading universities, including an active IP protection and technology transfer policy.
How does the government support the biotech sector?
The Research Council of Norway implements the national research strategy and acts as a governmental advisor, funding agency and coordinator between R&D and industry. Due to the lack of big pharmaceutical companies in Norway that could act as a drivers for biotech start-ups, both financially and technologically, nine out of ten new biotechnology ventures are spin-outs from research organizations. The government also supports the biotechnology sector through involvement in various schemes. This includes a programme of seed financing to help competitive enterprises on a regional and national level, technology transfer offices connected with the main academic institutions and a network of Norway's science parks to help to commercialize innovative ideas and develop new companies.
How would you describe the financing and funding possibilities for start-ups and established biotechs in terms of venture capital funding and governmental support?
Like in all other countries this is a major bottleneck, too, and indeed the venture capital market is not adequately supporting the growth of biotech in Norway. A combination of lack of “competent capital” and only a few cases of successful exits have made the venture market reluctant to the biotech sector. To remedy this the government is contributing to a co-investment fund that offers private venture capitalists joint investments at an early stage. However, still far too little money is raised.
Mr. Rødseth, we thank you for this interview!
Odd Magne Rødseth