The current health crisis has highlighted the resilience that Belgian companies have shown to accelerate research and allow the development, in record time, of multiple therapeutic solutions to counter the Covid-19 pandemic. This social responsibility is the proof of the value that an innovative biopharmaceutical industry could bring with its expertise in dealing with an epidemic.
Belgium continues to achieve a solid performance for every aspect of the biopharmaceutical value chain, i.e., research and development, clinical trials, production and logistics, and exports. The indicators below show the strong position of Belgium, compared with other EU countries:
It took 15 years for Belgium to build a well-developed ecosystem in its southern region – Wallonia – thanks to a highly-skilled workforce and support from public authorities all combined to foster and boost research and innovation. Today, these SMEs are bought out, go public, produce for foreign groups, … making Belgium the biopharmaceutical valley of Europe.
“Today, the biotechnology sector in Wallonia is showing such growth that it is disproportionately large compared to its actual size in Europe or in the world.” (WBI, 2021)
Walloon Region has made life sciences one of the axes of its redeployment from 2005, by focusing on new forms of medicine, including cell therapy and gene therapy. Today, Walloon biotechs have significant figures:
- 190 companies
- 16.500 direct employees
- 35.000 indirect workers
- Pharma sector accounts for 27% of regional exports (this is the number one sector)
And news about the Walloon pharmaceutical sector has been flourishing for the last two years:
- January 2020: PDC*line Pharma raises 22 million dollars
- February 2020: MaSTherCell is acquired by Catalent for 315 million dollars
- October 2020: iTeos Therapeutics (ULB spin-off) successfully enters the Nasdaq
- December 2020: Univercells raises 70 million euros from Belgian and foreign investors
- January 2021: Henogen is sold by the French Novasep to the American Thermo Fisher for 725 million euros
- February 2021: Imcyse raises 21 millions euros and opens its capital to its new American partner, Pfizer
- February 2021: Delphi Genetics is acquired by Catalent for 55 million dollars
- March 2021: Diagenode is taken over by another group, Hologic, for 130 million euros
This Walloon success is worth globally. Even if Wallonia started this revolution a little later than many other regions (such as the United Kingdom with its London-Oxford-Cambridge triangle, Germany, France, the Netherlands, Flanders, …), it has caught up and is now experiencing the same growth rates, with comparative advantages. One of these advantages concerns R&D spending. According to Essenscia, they amounted to 2.6 billion euros in Wallonia in 2019. This is more than Flanders (1.9 billion euros), and more than other regions, if we compare this amount to the number of inhabitants or to the added value created.
The reasons for success according to UCM:
- Wallonia has a developed health system (20.000 hospital beds) and good university research (2.400 researchers). It was therefore possible to find skills, conduct research and test these on patients. Belgium is a specialist in clinical trials.
- University research served as a spur. Soon they left the labs to take commercial form. These are the spin-offs (or “detachments”). One of the first was Eurogentec, separated in 1985 from the University of Liège, which became a leader in genomics, then acquired in 2010 by the Japanese Kaneka.
- The biotech sector then experienced a boost from 2005 with the creation of competitiveness clusters by the Walloon Region, including one devoted to health: Biowin. Budgets have been made available for R&D, partly overlapping those of the administration (SPW Research). Special feature: these funds are only awarded after selection by an independent jury. Only the most promising initiatives are therefore funded.
- To obtain these Walloon funds, projects must also correspond to specific areas. Success requires specialization. There are four: biopharmacy (which brings together cell therapies, gene therapies and immunotherapies), equipment (medical and diagnostic), nuclear medicine and big data applied to health. Initiatives independent of universities, start-ups, have appeared in turn.
- To support research, conduct clinical studies and consider production, other financial resources are necessary. However, they do exist. The universities have set up their funds: Theodorus at ULB, Vives at UCLouvain, Spinventure at ULiège. Regional invests have become very active, like Noshaq and Sambrinvest. The financial arms of Wallonia (SRIW) and the federal (SFPI) participate. And then there are venture capital funds: Belgian (Fund +, Eden Biocapital, Newton Biocapital) or foreign.
- Federal tax incentives play a role. In particular, the 80% exemption on professional withholding tax for researchers and the low tax on income from patents (Patent Box).
- Finally, the role of entrepreneurs should be emphasized. Some remained in the industry after retiring or reselling their business. They then advised or invested in young shoots. Such as Jean Stéphenne (ex-GSK), François Blondel (ex-IBt), Jean Combalbert (ex-Ogeda)…
UCM listed some examples of success Walloon pharma & biotech companies (in bold the companies which beLean.net have supported):
- MaSTherCell (Catalent)
- Delphi Genetics (Catalent)
- Henogen (Thermo Fisher)
Credible medical innovations have been developed, but one of the strengths of Walloon biotechs has been to launch into production quite early, and not to be satisfied with research alone. This stage of industrialization is vital because it creates real added value and because global pharma operates more and more with subcontractors for production (referred as CDMO for “Contract Development and Manufacturing Organization”).
In a nutshell:
- A biotech company designs a bio-drug and conducts clinical trials
- Another biotech CDMO is responsible for the manufacture of one or another substance used in the new product (i.e. stem cells, modified DNA, viral vectors… in the case of cell and gene therapies)
- Finally, a pharma giant is using the technology and/or the production process for global commercialization
A recent example is striking. In one year, three Gosselies-based SMEs were taken over by the American Catalent: MaSTherCell, SCTS (a subsidiary of Bone Therapeutics) and Delphi Genetics.
The entire pharma sector operates through mergers and acquisitions: the big laboratories (which occupy the markets) buy out the SMEs (which carry out innovation). This wave of buyouts and fundraising is indicative of a new stage in the development of biotechs in Wallonia, a phase of consolidation: SMEs integrate large groups, which will allow them to continue to grow, to access new resources, and to target important markets.
Today, Belgian biotechnology companies are worth 27 billion euros. Those biotech companies have won over investors from all over the world. In Wallonia only, 687 million euros have been invested in the Walloon life science industry recently.
There are still challenges for the future: simplifying legislation to allow new innovations, improving logistics for easier exporting, automating production, or even boosting training efforts.
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