This Thursday, Biocat, the organization that coordinates and promotes the healthcare and life sciences sector in Catalonia, presented the 2015 Biocat Report, which covers the status of the sector between 2013 and 2015. The report shows the positive evolution of key economic and research indicators for the BioRegion of Catalonia and clearly demonstrates that "Catalonia is still among the top regions in Europe in terms of quality and quantity," stresses Biocat CEO Albert Barberà.
Catalonia is the most dynamic bioregion in Spain and one of the most active in Europe. With a population of more than 7.5 millions and territory comparable to Finland, Belgium, the Netherlands and Israel, the BioRegion of Catalonia brings together 734 companies: 221 biotechnology, 46 pharmaceutical, 94 innovative medical technology, 208 suppliers and engineering firms, 130 consulting and professional services and 26 active investment organizations.
With these figures, despite being one of the smallest countries in Europe by population, Catalonia is among the top four European countries in terms of number of companies in the healthcare sector per inhabitant. Specifically,it has more pharmaceutical companies per capita than any country in Europe except Belgium. Catalonia is also ranked fourth among European countries in terms of biotechnology companies per inhabitant(behind Sweden, Switzerland and Israel) and fourth in medical technology companies (behind Israel, Sweden and Switzerland).
Between 2013 and September 2015, 75 new companies were created in the BioRegion, mostly biotechnology firms (27). Between 2005 and 2015, there were a total of 337 new business projects in the BioRegion and, over the same period of time, only 9% of projects were terminated (compared to the mortality rate of innovative companies in Spain and Catalonia, which is nearly 50%).
“In terms of business growth and entrepreneurship, these two years, and in fact the past 10 years, have been positive on balance," highlights Biocat CEO Albert Barberà. “The increase in the number of companies, their size and the investment attracted and large business operations is proof of the progressive consolidation of our ecosystem.” However public and private R&D investment in the sector dropped nearly 11% between 2009 and 2014.
Industry: Key facts
The companies in the sector post yearly turnover of €14.36 billions, 7% of the GDP of Catalonia (2014 data) and employ 42,133 workers. 48% of turnover in the sector (€6.852 billions) comes from pharmaceutical companies, while biotechnology firms – the segment that posted the highest growth compared to 2011 – have a joint turnover of €2.910 billions. Medical technology companies account for €3.092 billions and the rest (€1.514 billions) is from other sorts of companies, including the €16 millions from digital health firms.
Regarding size, 88% of companies in the BioRegion are SMEs. Of these, nearly half are microenterprises with fewer than 10 workers and turnover under €2 millions a year. Over the past two years, the number of medium-sized companies (between 50 and 250 employees and annual revenue between €10 millions and €50 millions) has doubled and now makes up 22% of all companies in the BioRegion, a sign of the progressive consolidation of the sector.
Between 2013 and 2015, companies in the BioRegion attracted more than €100 millions in investment, more than half over the past year, with large operations like the Oryzon-Roche and Palobiofarma-Novartis deals or the Minoryx Therapeutics and Sanifit rounds of funding, led by the main Catalan venture capital funds Ysios and Caixa Capital Risc.
The main market for Catalan life sciences companies continues to be Spain. Europe is the focus of international exports or marketing (mainly Germany, Italy and France) along with the United States.
The BioRegion of Catalonia has 89 research bodies: 41 research centers, 15 university hospitals (of a total of 101 public and private hospitals), 11 universities with degrees in the life sciences, two large science facilities, seven technology centers and 13 science and technology parks with activity in the life sciences. Some of these bodies are among the most prestigious in the world, including CRG (ranked 9th in the top 100 biomedical centers in the world), ICIQ (ranked 1st world institution in Chemistry) and ICFO (ranked 1st world institution in Physics).
The number of publications in the healthcare and life sciences sector increased 168% between 2000 and 2015. Catalonia produces 3.15% of all scientific production in Europe and 0.99% in the world, and 29% of publications in Spain. Catalonia is ranked second in the EU in number of grants received from the European Research Council(ERC) and it is awarded 53% of the grants from the ERC to go to scientists in Spain (180), 35% of which go to life sciences. Regarding scientific production in life sciences, Catalonia produces 3.15% of all scientific production in Europe and 0.99% in the world, and 29% of publications in Spain.
The 11 Catalan universities that offer health and life sciences degrees graduate 5,500 students each year. One of these, the UB, is among the 49 most prolific universities in the world in terms of publications, two are among the top 200 in the world (UB, UAB) and three among 50 best with less than 50 years of history (URV, UAB, UPF).
The Catalan hospital system has a total of 195 establishments that employ 89,000 workers, nearly 1/3 of which are at the 15 university hospitals. These 15 hospitals and their 9 associated research institutes employ 5,000 researchers. 11 of the top 20 Spanish hospitals are located in Catalonia, which is also the most active region in conducting clinical trials.
Despite the positive results for most of the indicators, the Biocat Report also shows that there are still challenges to be tackled. First of all, top-notch research doesn't translate into high socioeconomic value. “There is still a gap between the market and research, and between our indicators regarding scientific excellence and those for innovation: the BioRegion doesn't have a science problem, it has a transfer problem,” warns Albert Barberà. For example, between 2010 and 2015 only 286 patent applications in the healthcare and life sciences sector were submitted from Catalonia to the OEPM (Spanish Patent and Trademark Office), 17% of the national total.
Furthermore, public and private investment in R&D in Catalonia dropped nearly 11% between 2009 (the turning point after a decade of steady increase) and 2014. R&D spending makes up 1.47% of the Catalan GDP (data from 2014), above the Spanish average (1.23%). Catalonia leads R&D investment in biotechnology in Spain, with total spending of €416 millions (28.7% of the total – data from 2014). “We must increase support for basic and clinical research, and get the business sector involved," says Biocat CEO. "Between 2002 and 2013, public investment as a percentage of the GDP was 1.7 times greater, while private investment remained unchanged. This trend must be reversed."
Finally, despite the successful investment seen in 2015, access to capital continues to be one of the main hurdles facing Catalan companies. "We need funding vehicles to develop proof of concept; to expand the pool of investors; to attract more private foreign capital; and the legal mechanisms to incentivize a culture of philanthropy, among others," explains Albert Barberà. “We must continue working to address these challenges, focusing on technology and knowledge transfer, as well as support for entrepreneurs and business growth, because we not only have to help people get started, but also help companies scale up."
The Biocat Report 2015- A global life sciences Outlook
The 2015 Biocat Report was compiled by Biocat, the organization that coordinates and dynamizes the life sciences sector in Catalonia, and features articles by international authors including Guy Nohra, cofounder of Alta Partners; Bertalan Meskó, medical futurist; and Nuviun, among others.
“Most US investors don’t know that Catalonia has a thriving life sciences cluster. In order to attract the attention of a foreign investor, Catalan biosciences companies basically need two attributes: world-class science and an excellent well-rounded entrepreneurial management team”, writes Guy Nohra, Co-Founder and Managing Director of Alta Partners, in the Biocat Report. “The BioRegion needs tangible wins at all stages. Money attracts money. That is why I believe that the BioRegion of Catalonia is ripe for larger venture capital funds that can invest across all stages”, adds Nohra.
The Report was presented at an event presided over by President of the Government of Catalonia Carles Puigdemont and also featured Ella Korets-Smith, executive director of TO Health!, the Toronto life sciences cluster. “TO Health! is honored by the invitation to participate in this important milestone for Biocat and we look forward to sharing best practices and building a collaborative relationship between our two biotechnology clusters,” said Paul Lepage, president of Telus Health and co-chair of TO Health!.
 Per million inhabitant
See the full Biocat report: