A few years ago it was not uncommon for US biotechs to focus entirely on their home market. In more recent times cost controls have led these companies to seek additional returns by taking a more global route. Europe with over 20% of the world healthcare market becomes a key target for expansion, although successfully launching a product there is complex;¹ in addition to time zone and language issues, each country has its own rules and regulations that need to be navigated.

Routes to European success

There are 3 possible ways forward: licencing out the product; partnering with another company; or going it alone.

The first of these is the lowest cost, lowest risk approach but can mean sacrificing 60-75% of the asset value.¹ The second option means a company deciding what it wants to do for itself and finding a partner to help do the rest. The final route of going it alone is potentially the riskiest but also the one that if successful will deliver the highest returns. Perhaps unsurprisingly, the first or second options have historically proved most popular with companies whose products require a traditional marketing approach. However, with a new wave of targeted and personal medicines coming on stream – 50% of FDA approvals are drugs with an orphan designation – the risks of going it alone have been reduced.  These drug launches do not need the scale and infrastructure previously associated with success in Europe. Instead they may be handled by a central multifunctional team with very small number of people in each local market; examples of companies that have adopted this type of approach are Vertex, Intercept, and Alnylam.²

For these go-it-alone biotechs an important decision is where to locate their European HQs. The largest biotech hubs in Europe are located in France, Germany and the UK, which account for half of the continent’s biotech companies. However, Switzerland has also experienced strong growth and has done particularly well in attracting US biotechs.³

The rise of Switzerland

Undoubtedly, favourable tax regulations and an established financial reputation have helped to make Switzerland attractive but there are many other reasons why it has proven so popular. It is a stable, democratic country situated in the middle of Europe and has been ranked as the world’s most innovative country for 10 years in a row by the UN Global Index. Particularly important for biopharma companies is that life sciences figure prominently in the country’s economy.  Two of the world’s pharmaceutical giants, Hoffman-La Roche and Novartis, are Swiss and based in Basel, whilst there is also Vifor Pharma in Zurich and Lonza in Valais. In addition, 90% of the biggest biopharma and biotech companies have a significant presence there, many of which have been attracted by the infrastructure, including great universities and Institutes of Technology.⁴

The potential for R&D collaboration and growing talent pool reinforces Switzerland’s position as a biotech stronghold and helps it attract the new wave of go-it-alone biotechs, as evidenced by these examples of US start-ups in the greater Zurich area, including Zug: Apellis, Reata, Deciphera, Global Blood Therapeutics, Stemline and Arvelle.⁴ Last but not least is the collaborative vision of the country itself

“We want to be the location of choice for forward thinking companies and talent from Boston and other regions of the US and the world when they want to expand internationally’ ⁴ Relo Sidler, Head of Communications and Marketing, Greater Zurich Area

There’s nothing like a warm welcome!

1. Case A. Routes to European Commercialisation in Europe. Alacrita.
2. Shorthouse J. From US TO EU: Young Biotechs Going It Alone. PharmaIntelligence.
3. Tordjman R. France’s biotech system is poised for growth – it’s time to feed it. PharmaPhorum. 2021
4. Arthur R. Building a biotech hub: Switzerland puts the focus on personalised medicine, mRNA, CGT and more. Biopharma Reporter.com. 2021.