Why Denmark Is a Strong Player in Europe’s Biotech Industry

denmark biotech industry

Denmark is a rapidly growing hotspot for biotech. During the BIO-Europe conference in Copenhagen, I talked to Mette Kirstine Agger, Managing Partner at the life sciences investor Lundbeckfonden Ventures, to learn more about how the industry is evolving in Europe and Denmark.

The US has traditionally been the leader in biotech, but that seems to be changing. “The capital market is bigger in the US and it’s a more consolidated market, more experienced investing in biotech,” said Agger. “But we also see an increasing number of European biotech companies reaching out to the US… and American investors are coming to Europe to invest.”

Agger believes that the high quality of science is one of the strengths in Europe. “The DNA helix, the antibody invention, the CRISPR technology is European.” She also pointed out that getting a company through the early stages comes at a lower cost in Europe than in the US.

Europe is starting to catch up with the US, with VCs raising bigger funds and the number of companies that pass the billion-euro mark growing every year. However, there are still challenges ahead.

In a plenary session at the conference, Onno van der Stolpe, CEO of Galapagos — one of the biggest biotech companies in Europe — said: “The ecosystem is not there yet. We don’t have the real big successes like Celgene or Amgen. Everything big in Europe gets acquired and eaten up by pharma.” A perfect example is Actelion, the biggest biotech that Europe has seen. Last year, the company was acquired by J&J for €28B.

Kirstine agreed with van der Stolpe that, both in Europe and the US, every company is up for sale on the right offer. In the Danish biotech ecosystem, however, many big biotech and pharma companies are owned by a foundation, which ‘protects’ them against acquisitions.

“It originates from family-owned businesses that have developed to a stage where the family decided to maintain and protect the ownership,” said Agger. “That foundation’s responsibility is to be a good, qualified owner of the company. That’s a unique Danish structure, and that simply means that without approval of the foundation — and in some cases the foundation won’t even consider a sale of the company — the company is never for sale.”

Lundbeckfonden Ventures itself is part of the Lundbeck Foundation, which is also the majority owner of Lundbeck, a pharma company focusing on the central nervous system. Another well-known Danish foundation is the Novo Group, which owns the big pharma Novo Nordisk, the industrial biotech Novozymes, and various venture arms.

“That long-term strategic ownership gives the company a solid investor base,” she added. “That creates a whole hotspot for R&D in the country that stays in the country. And based on that we then can build the biotech companies and you actually see investors, both local like us and international investors coming to the region.”

Among the success stories in the Danish biotech ecosystem, there are the antibody maker Genmab, now the most valuable biotech in Europe; the cancer vaccine developer Bavarian Nordic; and the diabetes firm Zealand Pharma.

Agger concluded that, for any biotech company to succeed, independently of its location, it’s important to have a global approach. “We have a focus on building internationally from day one, so we have to address the US market very early on, have to get to FDA and start the conversation with the regulatory authorities in the US. Likewise in Europe,” she said. “We always try to work in international syndicates, because I think that simply gives the best of both worlds. Pharmaceuticals are a global business, it has to be a global product.”

European biotech should keep growing towards the level of the US. In the next decade, Agger expects e-health and big data mining to grow substantially and play an important role in the development of the next generation of treatments.

“I think we have a unique position in Europe with our data records on patients, in particular here in Scandinavia,” she said. “Mining this data will provide a lot of information… increasing understanding of the disease, biomarkers, diagnostic markers. I think we will continue to create much better and much more focused treatments that are tailored to subgroups of patients with specific characteristics. That’s going to be big the next 5 to 10 years.” 

Image via Shutterstock

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