Catalan biomedical companies attracted €153.1 million in investment in 2016

Catalan biomedical companies were able to attract €153.1 million in investment in 2016, a record figure for the sector. This is the main takeaway from the first Study on investment in the Biomedical industry in Catalonia 2017: Achievements and future challenges presented by CataloniaBio, based at the Barcelona Science Park, and EY at the Cercle d'Economia before some seventy members of the association, entrepreneurs, investors and other professionals.

The study, compiled with an ad-hoc methodology developed by EY, aims to paint an accurate picture of the investment landscape in Catalonia in order to measure and compare it in the coming years.

Funding is one of the key aspects for companies to evolve and for the cutting-edge research and innovation being done by pharmaceutical and medical technology companies to reach the world. In 2016, this investment was raised through 50 operations from a variety of sources, depending on the type of company. In this regard, productdevelopment companies financed most of their operations through venture capital (35%), licensing agreements (33%) and debt (16%). This was rounded out with industrial partners (7%), MAB (4%), business angels and family offices (3%), crowdfunding and others (2%). Service companies did so mainly with funds from business angels and family offices (92%).

In total, the companies surveyed signed 42 licensing agreements in 2016, valued at a total of €65.5 million. However, they believe these agreements could generate potential revenue in excess of €250 million over the next five years.

With regard to the geographical origin of the investors, it must be noted that most of the companies’ capital share is in the hands of investors based in Catalonia (82%). Nevertheless, in recent years’ international investors have gained importance, now controlling 12% of the shares of the companies surveyed, while investors from the rest of Spain own 6% of the capital. According to companies that have closed new rounds of funding, the founders are gradually reducing their participation in each round, falling below 50% by the third round.

Catalan investment companies —including Caixa Capital Risc, Healthequity, Inveready and Ysios Capital— performed a total of 33 operations with €32 million in committed capital in 2016. Approximately half of these resources (48%) was allocated to businesses located in Catalonia, where interest focused mainly on drug-discovery companies (55%).

The growing interest of pharmaceutical corporations in investing in the sector is particularly worth noting. This trend has been bolstered in recent years, with the study showing 60% of laboratories surveyed holds a stake in biotech companies and 45% of the investees are located in Catalonia.

Despite the growing consolidation of the biotechnology ecosystem, it must be noted that many of the projects are still in the early stages, focusing on preclinical validation or product development and prototyping. The five therapeutic areas in which the majority of products being developed are: oncology, central nervous system, infectious diseases, cardiovascular system and respiratory system.

Ignasi Biosca, president of CataloniaBio and CEO of Reig Jofre, highlights the collaborative projects in the sector (157 in total): “57% of pharma companies are working with research centres, and 29% with start-ups; these figures confirm that we are a sector open to innovation and, increasingly, technology transfer.”

The study is available in digital format at: http://cataloniabio.org/en/publicacions

Image: The study was presented by Ignasi Biosca, president of CataloniaBio and CEO of Reig Jofre, and Silvia Ondategui, Partner Global EY Life Sciences (Photo: CataloniaBio)