Tech Review

A small country bets big on biomarkers

01.02.2010

Luxembourg has appeared from nowhere with an initiative to set up a European center for diagnostic biomarkers, while it’s government has set aside EUR140m to reach some ambitious goals. To speed up development, Luxembourg looked for – and found – well-known partners in the field from both the US and Germany. The major offensive is part of a strategic change in the Grand Duchy’s economic planning, an attempt to wean itself from dependence on the banking business that made it vulnerable during the financial crisis.

Jeannot Krecké is a busy man these days. Luxembourg’s Economics Minister is pulling every string he can to put the little country on the biomedical map in Europe. In total, his government has earmarked EUR140m in funding until 2013 – money that will be used to set up a complete new research infrastructure. “If we want to attract life sciences to Luxembourg, then we need an academic background,” Krecké told Euro­BiotechNews.
In terms of research, the Grand Duchy has a lot of catching up to do. Its three Centres de Recherche Public (CRP) – Santé, Henri Tudor and Gabriel Lippmann – were only founded at the end of the 1980s. Luxembourg didn’t even have a Research Ministry or a research budget until 1999. Six years ago, the University of Luxembourg was born. “Back in the old days, the philosophy was that young people don’t need a university in Luxembourg, they have to study abroad,” explains Research Minister François Biltgen. But that attitude has changed in the last few years. Now Biltgen is proud to have a university that offers Bologna-conform studies right from the start. And research has joined higher education at the top of the country’s wish-list. The Luxembourg Centre for Systems Biomedicine (LCSB) and the Integrated Biobank of Luxembourg (IBBL) are the visible signs of that new strategy. They were both built from scratch. “We have to provide credibility,” Krecké says.
Even before the onset of the financial crisis, the minister was lobbying for more diversity in the country’s economy and a move away from the banking sector. More than 150 financial institutions have offices in Luxembourg, and almost a third of the country’s gross domestic product is earned with financial services – the result of beneficial regulatory conditions and an attractive tax environment. But Krecké says this strength also hides a weakness: “The strong concentration of growth toward a single sector makes our country vulnerable.”

Biomarkers as a niche strategy

Since Krecké took office in 2004, the government has been looking for alternatives, and one sector of interest was biotechnology. In 2006, the CRP-Santé published a report with an interesting conclusion. The biomedical research landscape is small, it said, and the majority of the 56 companies active in the field are pharma firms.
Since 2008, the path has grown clearer.Luxembourg doesn’t want to pursue expensive drug development, but instead diagnostic biomarkers and personalised medicine. This goal was firmed up in June 2008 with a strategic partnership deal involving three renowned US-research institutes.
In concrete terms, this means that both of the new research centres have established a close relationship with the US research community. Whereas the Translational Genomics Research Institute (TGen) under Jeffrey Trent in Phoenix has been helping with the start-up of Luxembourg’s biobank, the LCSB has been working closely with the Seattle-based Institute of Systems Biology (ISB) under Leroy Hood, the founder of a number of biotech companies – among them Amgen, Rosetta and Applied Biosystems. One of the biobank‘s first customers will be a lung cancer project from the Partnership for Personalized Medicine (PPM) in Phoenix, which was initiated by Nobel laureate Leland Hartwell. The overall goal of this project, in which the CRP-Santé is also taking part, is to identify biomarkers for lung cancer. “With these three cooperations we have already received a lot of publicity,” sums up Krecké when discussing the first phase. “In the long run, we will also benefit from it economically.”
And the minister has provided the regulatory basis to do so. In 2007, he passed a law that is not only attractive for Luxembourg’s companies. It states that anyone who creates intellectual property in Luxembourg or in cooperation with one of its research entities can receive tax rebates of up to 80% on the revenues generated by this IP. Another law was passed granting companies generous support for R&D activities. A majority of the millions reserved for the biomedical offensive will be channeled into technology transfer. Spin-offs derived from the partnership with the US institutions are to be started as bi-national firms, with a consequent division of patent rights. There are also incentives for researchers to patent first and publish later. In spite of the rosy description though, there are still a few prospective pitfalls. This is especially true for the labs.

Critics from private laboratories

“To date, laboratories are only allowed to register as a non-incorporated firm in Luxembourg, not as an incorporated entity,” criticises Jean-Luc Dourson, the President of Luxembourg’s Federation of Medical Analytic Laboratories (FLLAM). The major problem is a laboratory law that falls under the purview of the Ministry of Health. Initiated in 1984, it places medical analysis firmly in the hands of doctors. Based on that, a range of clinical laboratories have emerged that are proving a lucrative source of income for the clinics – due to the fact that laboratory analysis is directly reimbursed by health insurance schemes. For private sector competitors, it’s an attractive market. To date, three companies are active in the area: Ketterhill, Laboratoires Réunis and Laboratoires Les Forges du Sud. Nevertheless, the laboratory law inhibits cooperation with international partners, and limits its working radius. “We are allowed to take blood and urine samples, but not to analyse tissue,” says Dourson. Possible solutions are currently the focus of talks between Krecké and Health Minister Mars Di Bartolomeo. For the Economics Minister however, the situation is clear: “We have to cut a fire break between the national insurance and economic development in the health sector.”
Meanwhile, the establishment of research infrastructure is in full swing. In March of last year, international biobank expert Robert Hewitt, President of the International Society for Biological and Environmental Repositories, was appointed Chief of the IBBL. The biobank only recently moved into its new facilities. Hewitt is aiming to establish the IBBL as a centre with high technical expertise when it comes to storing and analysing bioprobes – one that will cooperate with others under the roof of the European biobank-network BBMRI. Last summer, an LCSB-head was found in German science manager Rudi Balling, former chief of the Helmholtz-Center for Infection Research in Braunschweig. “During the next four to five years I will have up to 100 employees,” Balling claims. The first will initially settle in the US before coming back when the infrastructure is ready.
The close US-relationship offers advantages. In 2009, Eric Tschirhart, the administrative head of the University of Luxembourg, told a local newspaper “that we will get a push in terms of knowledge during five years of cooperation with the ISB that would take 25 years to acquire on our own.” The first projects have already begun.
But the American connection also increases pressure. “If an initiative of this stature goes wrong, we can forget biotech in Luxembourg for the next 30 years,” Tschirhart believes.
Researchers aren’t worried. They feel lucky to be setting up an infrastructure in a special environment. “I already received a request from a banker who is thinking about donating to research,” says Balling.

Good support for start-ups

Luxembourg’s big advantage is the nearby banks, which will also aid future start-ups. Last year alone, the VC Fonds Vesalius Biocapital (EUR75m) – which has an office in Luxembourg – began a partnership with the CRP-Santé to support young bio­tech companies. Krecké is also planning his own risk-capital funds with a focus on companies in the field of personalised medicine. This fund will be established in a close relationship with the German Hopp BioTech, the investment company set up by former SAP founder Dietmar Hopp. “We only have to clear up the final details,” according to Krecké, who added that “Luxembourg will do its share, but I also negotiate with partners.”
Djalil Coowar has already gone a step further. In 2006, the neurologist at the University of Luxembourg founded Axoglia Therapeutics S.A together with French colleagues. Since then, he’s been able to count on Kreckés financial and political support. Axoglia is not just the young university’s first spin-off – it’s also the first in biotechnology.

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