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Vienna is no longer just the city of music or grand palaces; it is rising up the ranks to become a notable hub in the European biotech and life sciences scene. As the industry raked in €22.7 billion ($26.71 billion) in 2023, it has seen a significant increase in innovation, employment, and research infrastructure in recent years.
Around 81% of the city’s life science revenues stem from the biotech and pharmaceutical sectors alone, and it accounts for more than half of Austria’s entire life sciences industry. But this wasn’t the case a decade ago. So, how did it all change?
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Biotech industry in Vienna: “a highly diverse ecosystem”
“In the early 2000s, there were just a few dedicated biotech firms in Vienna,” said Philipp Hainzl, managing director of Vienna’s life science cluster platform LISAvienna. “Vienna’s biotech story spans decades and has grown from a handful of pioneers to Austria’s leading life sciences hub.”
Now, it is home to 754 organizations, including 646 companies and nearly 50,000 employees, according to a report published by LISAvienna last month. By the end of 2023, 119 biotech companies were active, “contributing to a highly diverse ecosystem,” added Hainzl.
“Today’s Vienna is not just strong in drug development, diagnostics, and reagents – it’s also thriving in bioeconomy, contract development and manufacturing organization (CDMO) services, and digital health.”
However, the city’s present-day success in the life sciences didn’t happen in a vacuum. More than 70 years ago, pharma giants like Boehringer Ingelheim and Takeda set up shop in Vienna to expand their global network. Boehringer has even stated that Vienna is the only location that covers the entire value chain for the big pharma, while it initially leaned on the region’s expertise in microbial fermentation and cell culture technology. Hainzl attributes this to Vienna-based university and research center BOKU University’s researching and teaching fermentation technologies as early as 1945.
Moreover, Hainzl explained that the founding of the Institute for Molecular Pathology (IMP) in the 1980s kickstarted the Vienna BioCenter, which brings together research, education, and companies. The research center is now home to six top research institutions, 2800 employees and over 40 biotech companies. The Medical University of Vienna has also become a key innovation hub, where research and clinical application are tightly linked.
Around the same time, Austrian biopharmas like Biomay and other multinationals, such as Octapharma began to sprout up, only to quickly expand in protein and genetic material manufacturing. In fact, now, the region makes up for 20% of blood plasma production globally, with 4 million liters of blood plasma processed annually, mainly by pharmas like Takeda and Octapharma. Around 95% of this is exported, according to a report by Vienna Business.
Although the region has been putting in the work since the 1970s and 80s to become a life science hub, the momentum has picked up over the past five years or so. Hainzl sees a clear reason as to why.
“Vienna’s life sciences sector is powered by outstanding academic research, a densely networked community, clinical excellence, a strong global industry presence, a highly effective public funding system, and an exceptional quality of life,” said Hainzl.
Big pharma investments on a high in Vienna
With 34,000 life sciences students and 8,800 scientific papers published annually, the talent pipeline is strong, he pointed out. Investments have also surged, making Vienna more appealing for researchers as well as a place to do business. In 2021, Boehringer invested €700 million ($823.66 million) in the development of a biotech production facility in Vienna, and a year later, Takeda vowed to spend €120 million ($141.19 million) on a research and development (R&D) center, which is expected to open soon with around 250 researchers working in the field of drug development from the new site next year.
Meanwhile, Takeda had announced two years ago that it would be pouring in a “three-digit million-euro amount” to build a “laboratory of the future” for around 250 researchers in Vienna’s Seestadt district, which is expected to launch next year. The lab is meant to specialize in gene therapies among other areas of biotech research.
Earlier this year, the Swiss pharma giant Octapharma also invested €200 million ($235.09 million) to expand its presence in Vienna. Expected to generate 160 new jobs, the plasma manufacturer wants to meet the rising demand for plasma production. The global plasma market was estimated at around $35.2 billion last year and is poised to hit $62.8 billion over the next eight years at an annual growth rate of 7.5 percent.
This new venture comes after Octapharma doubled plasma production two years ago. All this is partly driven by the global increase in the number of people with bleeding disorders, which rose from around 280,000 to more than 465,000 patients between 2013 and 2023, according to Octapharma.
“We can only succeed in this if we meet the growing demand and continue to increase our production capacities. With the expertise that has been available in Vienna for many years, we have the ideal basis for this,” Olivier Clairotte, chief production officer at Octapharma, had said in a press release.
While pharma investments seem to be growing in the region, Hainzl added that the country’s funding system is what has made it stand out in recent times.
“Austria’s targeted public funding landscape is a key success factor. Tailored funding programs help transform research into life-saving solutions. Key players include Austria Wirtschaftsservice, which supports early-stage ventures with pre-seed and seed financing, and offers loans, guarantees, and equity for scale-ups,” said Hainzl.
Besides, the Austrian Research Promotion Agency – the country’s national funding agency – is covering all technology readiness levels (TRLs) with a €95 million ($111.62 million) Life Sciences Program from 2022 until 2026. TRLs are a measure used to assess the maturity of a technology, ranging from scientific research ideas to the commercialization stage for drugs – in the case of biotech and life sciences.
Similarly, the Vienna Business Agency and the Vienna Science and Technology Fund are “complementing national and European Union (EU) efforts by accelerating business growth and strengthening the research landscape,” explained Hainzl, whose life sciences platform, LISAvienna, is jointly operated by both the backers.
“For nearly 25 years, we have supported biotech, pharma, medtech, and digital health businesses with expert advice on funding, infrastructure and strategic partnerships,” said Hainzl.
Biotech in Vienna faces a key challenge: not enough VCs
However, the funding environment in Vienna is far from perfect. Hainzl pointed out that the capital city experiences many of the same challenges that other growing biotech hubs across mainland Europe face.
“Funding remains the biggest bottleneck. Drug development is high-risk, and promising projects often fail – sometimes after several attempts. Vienna, like much of Europe, is working hard to develop an ecosystem of risk-tolerant investors. The ‘valley of death’ between early research and market readiness is deep, and even successful companies sometimes can’t bridge the gap.”
Moreover, there has been a significant lack of local venture capitals (VCs). A decade ago, the city suffered from a VC shortage and needed a dedicated life science VC of its own, according to a 2015 CNBC report. Much of the investment was coming in from other parts of Europe like Germany, at the time. Although funding has gotten slightly better as the hub has become more recognized, this comes with the challenge of keeping up with the growing fame.
“As the life sciences sector grows, diversifies, and matures, the supporting ecosystem must keep pace. This requires greater resources — more funding, better services, and investment in multitenant lab buildings,” said Hainzl. “Europe also needs to rethink supply chains, local production, and pricing models to secure future markets.”
Moreover, foreign researchers and investors face challenges in complying with regulations, according to Hainzl. He said: “Newcomers in Europe are frequently surprised by the learning journey required to meet European regulations and implement quality management systems. That applies to many young companies in Vienna, where 51% of dedicated biotech companies are less than five years old, and 70% have less than 10 employees.”
But Vienna is not alone in this. Launching startups and scaleups in Europe comes with regulatory barriers, a 2024 report by the European Commission (EC) stated, citing a need to cut the red tape for startups.
Moving with the times: AI and biotech startups launch in Vienna
Still, it looks like Vienna is moving at a quick pace when it comes to integrating artificial intelligence (AI) with biotech and the life sciences industry at large. The global AI in life sciences market size was $2.25 billion last year, and it is expected to hit $14.20 billion in ten years, growing at an annual growth rate of 20.21%, according to a report by Towards Healthcare.
“More than 40% of local life sciences companies are already working with AI, and Vienna is actively supporting developments in this area.”
A notable advancement was the launch of Aithyra in September last year. The Viennese research institute for biomedical AI landed €150 million ($175.86 million) in funding from Boehringer to speed up drug development to treat incurable diseases. To add to that, the Comprehensive Center for Artificial Intelligence in Medicine also came into the picture in January. The center was established to further connect AI expertise from MedUni Vienna with biomedical research.
Meanwhile, startups are steadily pressing ahead in Vienna. HeartBeat.bio and Hookipa Pharma are fairly new players in the industry. HeartBeat was founded in 2021 with a goal to conduct human organoid screening for heart disease drug discovery. By generating induced pluripotent stem cell (iPSC)-derived models of cardiac tissues from healthy donors as well as patients, the designed ‘mini-hearts’ are meant to reproduce the physiology of the human heart with the help of its Cardioid Drug Discovery Platform.
The latter, Hookipa, has a clinical pipeline devoted to treating infectious diseases and cancer with the help of arenaviruses – pathogens found in rodents that can generate an immune response against the desired target. Another cancer drug startup situated in Vienna is OncoOne, which is engineering antibodies to target cancer cells.
Hubs like the Vienna BioCenter want more of these startups entering the space, as it hosts over 30 biotechs, including HeartBeat.bio and Hookipa, and more than 2,000 scientists from over 80 countries.
Now, as Vienna gears up to host Europe’s life science partnering convention BioEurope on November 11th and 12th, it shines a brighter light on the budding biotech hotspot.
Hainzl said: “Vienna has a solid foundation for life sciences – now it’s about unlocking the next level of growth through new funding mechanisms, smarter EU regulation, and bold investments that strengthen the entire life sciences ecosystem.”
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