The European landscape for life science/healthcare is vast and can be complicated to navigate, but it provides access to a wide range of opportunities for foreign companies. We’ve asked our leading life science and digital healthcare partners to provide insights on the market in their respective country. The overall theme is a push towards preventative digital healthcare – which is a big reason large tech companies are showing more and more interest in health – and cutting-edge healthtech.
As a long-time base for many multinational pharmaceutical and biotech companies, Belgium continues to be a site for investment, R&D and commercial opportunities for life science and digital health ventures. The Belgian economy has traditionally been characterised by high foreign direct investment and the Flemish-speaking province of Flanders attracts the majority of foreign investors, followed by French-speaking Wallonia and then Brussels. Around 140 companies are active in biotechnology in Belgium and Belgian biotech companies comprise 23% of the total market value of all public European biotech companies. Universities and research centres have forged strong links with economic players and biotech innovation and research is largely centred around five industrial hubs and five universities. The Belgian market for medical equipment and supplies was estimated at EUR 2.3 billion in 2018 with annual growth of 4% (over the past five years).
As more stakeholders in the Belgian health sector are looking for ways to digitally transform their operations, there is increased collaboration and data sharing between healthcare providers. Earlier this year, the Belgian federal government rolled out a new eHealth action plan 2019-2021. Key areas of technological development include (bio)pharmacy, radiation in healthcare, cell therapy, medical devices and in vitro diagnostics, biomanufacturing and data science.
The market in Germany is large. Digital health products alone are projected to be 8% of the overall spending in the healthcare industry in 2025, amounting to EUR 38 billion in Germany.
There have be a few key developments in the market recently. First, the Digital Healthcare Act was approved by the German parliament in November 2019. The Act aims to improve healthcare through digitalization and innovation. It will give patients access to healthcare apps more quickly, which can now be prescribed by doctors and will be paid for by the health insurance. It will be easier for doctors to offer video consultations. The Act provides for a strengthening of the digital networking of healthcare providers through a connection to a joint telematics service. This new Act is in line with other legislative initiatives aiming towards more digitalized health care system (including e-prescription and electronic sick leave notices).
Second, an electronic patient record will be offered for patients from 1 January 2021 onwards. The patient record will include certain health data of patients (including medical history, medication, emergency data etc.) and the patient may give access to such health data to doctors and others, for example to increase quality and efficiency of medical treatments. It is expected that the health data within the electronic patient record will also be able to be used for additional or supplementary health apps (upon the patient consenting to such use). The details of the new legislation on electronic patient records have not yet been agreed on. Telemedical applications/services are to undergo further tests with the assistance of health insurances in a number of German states. If these tests are successful and the existing regulatory hurdles are (further) lowered, this field will become more important for medical care in Germany. The German regulatory body for doctors has already changed its professional code of conduct to allow for more extensive telemedical care.
Finally, the transitional period of the European Medical Device Regulation ends on 26 May 2020. Companies offering medical devices in the EU/Germany should carefully check if they need to act and/or adapt their strategy (for example, timing for placing on the market in order to use the transitional period instead of new rules). Amongst other changes, the new regulatory classification system for health care software/health apps within the Regulation could lead to stricter classifications and more regulatory obligations.
With a high concentration of life sciences companies, world-class universities and a long history of strategic partnerships linking science, industry and government, the Netherlands continues to be an attractive location for biopharmaceutical innovation in Europe. The Netherlands offers an appealing business climate with plenty of room for innovation. It has a competitive and stable tax regime, attractive incentives that support R&D and it is highly regarded for its well-educated, multilingual and dynamic workforce. Recent success stories include the rising biotech company Galapagos, Philips’ evolution into a major medtech player, and the relocation of the European Medicines Agency (EMA) to Amsterdam. We have also seen the launch of several stimulation initiatives, an example being PharmaInvestHolland – a public-private partnership to attract R&D investment. The Netherlands is home to 726 life sciences companies, of which 571 are biotech, 114 medtech and 41 pharmaceutical businesses, reflecting the country’s strong biotech credentials.
The Netherlands is home to several seed, early stage and international well known venture capital investment firms that specialise in life sciences and healthcare. In the past few years, these investment funds have raised record amounts from their investors to invest in innovative drug development, biotechnology and medical technology companies and to bridge research and development. Life sciences companies often also look internationally (including to the US) for funding, especially in later stages and if the investment exceeds EUR 50 million, given that Dutch life science investors are often seeking diversified portfolios, rather than sinking a significant proportion of their funds into one business.
However, there are signs of potential for larger ticket funding, as demonstrated by biotech company AM-Pharma which recently raised EUR 116 million, mainly from three Dutch investors, LSP, Gilde Healthcare and Forbion. We have also seen a number of successful exits in 2019 of life sciences companies to strategic buyers, such as the sale of Breath Therapeutics to Italian pharmaceutical company Zambon for up to EUR 500 million.
The United Kingdom continues to have one of the most productive health and life sciences sectors in the world, employing almost a quarter of a million people (two-thirds of which are outside London) and generating in the region of £74 billion of turnover per year.
The UK government consistently invests heavily in R&D sector and private investment is also increasing, signaling a bright and innovative future. UK-based biotech companies raised a record £2.2 billion in 2018, and a further £869m for the year up to 31 August 2019. AstraZeneca has moved its global headquarters and strategic science hub to Cambridge, UK; a state-of-the-art strategic R&D centre and global corporate headquarters located at the heart of the Cambridge Biomedical Campus.
The UK is the third largest single producer of pharma R&D after the US and China (by reference to the number of pharma companies headquartered). Advances in and increasing use of genomics and bioinformatics techniques continue to drive a personalised medicine approach to treating diseases, such as the recent development of CRISPR technology. R&D in anti-cancer therapeutics continues to dominate over other therapeutics areas, with over one third of drugs under development in 2019 directed towards the treatment of cancer. In particular, therapies which use the body's own immune system (immuno-oncology agents) are becoming increasingly popular; for example, 2018 saw the first EMA approvals granted for a new class of therapeutic agent (CAR-T therapies) for treating blood cancers and this continues to be an active area of research.
In addition, the UK continues to be an attractive forum for life sciences patent litigation with an increasing amount of originator v originator patent litigation in the courts (particularly in the context of antibody therapies and other biologics).