If the coronavirus pandemic has made something clear, it is that a country that does not invest in scientific research and innovation is at the mercy of others when a crisis hits. In Catalonia, the health sciences sector, and especially biotechnology, has a powerful and growing structure of universities, investment funds and acceleration centers for startups and research projects. But once these companies grow and are ready to make the industrial and commercial leap, they are sold to large foreign companies. The sector calls for a boost to have more production facilities, public support and higher capital investments to consolidate the business fabric and retain wealth.
The life and health sciences sector is one of the key segments for the Catalan economy. It represents 7.3% of GDP and employs 230,000 people, according to the 2020 Catalonia BioRegion Report, prepared by the Biocat and CataloniaBio & Healthtech associations. These organizations measure the pulse of a sector that has grown a lot in recent years, and that needs one more boost to make the final leap. The report highlights that Catalonia is making good progress in the stage of emerging companies: in 2020, a year that was bad for almost everything, the startups health experienced a significant boom. Investment in these emerging companies doubled compared to 2018, and exceeded 226 million, with an important role of venture capital (mostly international), which made more than half of the investment. The startups of biotechnology were the ones that grew the most in investments captured.
The general director of Biocat, Jordi Naval, highlights that Catalonia has several very favorable aspects. “We have a very powerful basic science, with a scientific production that is comparable to countries similar to ours in population and GDP per capita, such as Belgium, Denmark or Sweden. We also have an investment network specialized in biotech. There is also a very important group of professionals and experts in medical development, who work in large pharmaceutical companies such as Grifols, Almirall or Esteve. And we have a great capacity to carry out clinical trials in hospitals: for example, half of the drugs to treat covid have been tested in Can Ruti ”, Naval details.
Investment funds are a crucial actor for the development of the innovation fabric. Funds such as Ysios, Caixa Capital Risc, Invivo, Nina Capital, Inveready, Alta Life or Sabadell Asabys have raised, from their headquarters in Catalonia, up to 700 million euros to support companies in the sector, both local and international, a strategy that allows to grow startups Catalan and at the same time position the region as an investment pole also for foreign companies.
Indeed, Ysios Capital announced last week that it has already closed a third fund with 216 million euros to invest in drug research for rare diseases. “In Spain, a very powerful research park structure has been developed and the funds have helped attract international investors. Our biomedical system has to be among the greats in the world ”, highlighted Cristina Garmendia, partner of Ysios, in the presentation of the fund.
The Belgian example
It is in the second stage, when the startup you already have a prototype or product that you can manufacture on an industrial scale and market, when more powerful tools are missing. “We need stronger instruments from governments in research conversion, not just aid. In Belgium the Government invests, and it is proven that for every public euro invested, the return is multiplied by ten ”, says Naval. The second mechanism that is lacking in Catalonia is “a public-private commitment to have first-rate production facilities”. “We do not have manufacturing plants, and it is a pity because we almost do: in the field of vaccines, here is the blood and tissue bank, very powerful, and companies like Reig Jofré. But it is in Belgium where they have manufactured the vaccines against covid, ”says Naval.
The sector considers that it is “a matter of time”, and that the more startups there are, the more likely some will make the leap to scale-up [empresas ya testadas que necesitan crecer]. This requires even more investment effort in the early stages (the goal is to get 500 million in 2025), and in the more advanced stages to be able to attract international investment or go public.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.