The Spanish biotech industry is booming, but from my conversations with industry players elsewhere in Europe, it seems the country’s biotech industry keeps being a mystery for many. I caught up with experts at the Biospain conference to draw an overview of how biotech in Spain is doing in 2018.
When we talk about biotech in Europe, most think of the UK, France, Germany and Switzerland. Spain is not one of the first to come to mind, but the biotech scene in the country has dramatically changed in the last decade.
Most people I spoke to seemed to agree that Spanish science has always been of high quality. The main difference seems to be that more of this science is being translated into business. With the first generations of biotech entrepreneurs boasting several success stories in Spain, experience is growing and international investors are starting to take notice of this untapped location.
International investment is growing
International investment is marking a before and after in the Spanish biotech ecosystem. A great example is Sanifit, which despite its unusual location in the island of Mallorca raised over €36M in 2015. To date, it is still the highest funding round for biotech in Spain, and one of the first to attract international investors.
“All of them were first-time investors in Spain,” said Sanifit’s CEO Joan Perelló. “Some of these funds are now doing second investments in Spain.”
Since then, private equity rounds have been increasing significantly along with the participation of international investors. Just last week, Barcelona-based Minoryx Therapeutics raised €21M, the largest round in Spanish biotech this year. The round was led by Fund+, a Belgian VC which first ventured into Spanish biotech by investing in Aelix Therapeutics, a biotech developing an HIV vaccine, in 2015.
“Investing in Aelix was for me a first very good experience to work in the Spanish biotech environment. Thanks to that network, I was introduced to Minoryx,” said Philippe Monteyne, Partner at Fund+.
Local investors seem to be the best option to get access to that network. In Spain, Ysios Capital has long been dominating the scene. “Without Ysios presenting the investment opportunity of Aelix Therapeutics, we wouldn’t have spotted it,” said Jeanne Bolger, VP of Venture Investments at J&J Innovation.
But in recent years the number of private funds that specialize in biotech in Spain has multiplied, with key names like Alta Life Sciences, Asabys Partners (founded from previous Ysios partners) and Caixa Capital Risc. There is even a crowdfunding platform, called Capital Cell, that has already helped raise over €13M for 25 companies.
“We should encourage all CEOs to be part of very active networks, make sure to have the right connections that can be coached by those who succeeded,” emphasized Monteyne.
Entrepreneurial experience is accumulating
As Spain has starting maturing later than other European countries in the biotech field, entrepreneurs tend to have fewer years of accumulated experience, but the situation is changing.
“In terms of the cycle of experience, in the UK there are way more people that have created several companies already,” explained Daniel Oliver, CEO of Capital Cell. “We’ll get there in 3 to 5 years.”
“Unlike 15 years ago, now there are several clinical-stage companies,” said Perelló. “You can have conversations that unfortunately I did not have when I founded Sanifit.”
The area where the country seems to still be lacking more experience is public markets, with just a dozen public companies, all of them listed on national stock markets.
“In Spain it’s difficult to find companies with a valuation above €500M,” said Susana de Antonio, Spain Representative at Euronext. She believes that by listing on European stock markets, Spanish companies could grow further by getting access to investors globally, as many US investors (said to invest more generously in biotech) are already coming to European markets.
TiGenix was the only one to have listed on the international stock market Euronext, through a reverse merger. Although it has been delisted after Takeda acquired it in January, the company has proved that it’s possible for a Spanish biotech company to go public on an international stock market and land a lucrative exit.
All in all, it seems like Spain is rapidly bridging the gap that used to be between it and other European countries with a strong biotech industry. With more and more success stories, such as the acquisitions of TiGenix and STAT-Dx earlier this year, the country is proving its worth.
Not everything is perfect. For example, companies and investors seem to agree that bureaucracy and other legal matters can sometimes be challenging. But, as Perelló pointed out, “that doesn’t prevent investors from coming to Spain.”
In terms of opportunities regarding the science, investors seem to agree that Spain is at the same level to other European countries such as France. And the country has some additional benefits, such as a lower cost of living and, of course, fantastic weather!
Images via Shutterstock