2.6 Bioregions and Their Key Characteristics Elsewhere
2.6.1 Economic Geography of Clusters Spawned by
In the three instances under the spotlight here – Sweden/Denmark, Switzerland and Singapore – the influence of big pharma is, as noted, pronounced. Thus the first commercial exploitation of modern biotechnology in Sweden was based on technology from Genentech, licensed by the Swedish company Kabi in 1978. Kabi merged with Pharmacia in 1990. Pharmacia later merged with two US companies Upjohn and Monsanto, to form Pharmacia Corporation. In the spring of 2003 Pfizer, the US pharmaceutical company, acquired Pharmacia Corporation. The other major pharmaceutical company in Sweden, Astra (now a Swedish–UK firm AstraZeneca), has headquarters in Södertälje near Stockholm, with Swedish research based in Södertälje, Gothenburg and Lund started using recombinant DNA technology in the 1980s. From then, and increasingly in the 1990s, new DBFs were founded in Sweden. Most of these new companies were either spin- offs from university research or from existing large pharmaceutical companies.
Swedish biotechnology ranks fourth in Europe in terms of number of companies and ninth in the world according to the Swedish Trade Council in 2002.
The number of Swedish DBFs increased by 35% from 135 in 1997 to 183 in 2001, and the number of employees increased by 48% to about 4,000 (VINNOVA 2003). The two pharmaceutical companies AstraZeneca and Pharmacia Corporation were the dominant large companies engaged in biotechnology activities. Many Swedish DBFs serviced them in the biopharmaceuticals application sector, but also in such industries as food processing and agriculture.9 These DBFs are highly research-led and knowledge-intensive. Between 10 and 20% of employees in these companies have doctoral degrees. Of company presidents responding to VINNOVA’s questionnaire, 93% stated that their companies collaborated with academic research groups. From our earlier results, this appears to differentiate Swedish DBFs somewhat from those in the USA and UK, where research interactions are more among firms or distinctively among PROs. This is possibly an indicator of the relative immaturity of many Swedish DBFs, formed as we have seen in the 1990s for, according to the VINNOVA study, a majority of companies were small in 2001, that is, they had fewer than 200 employees. Almost 90% of the companies had less than 50 employees, and a good half had less than 10 employees. However, the category of small and medium-sized biotechnology companies is growing such that in 2001 Swedish DBFs totaled about 4,000 employees, a 35% increase since 1997.
These are mostly found clustered in Sweden’s metropolitan regions and in cities with large universities conducting substantial medical research. Fifty-six DBFs are located in the Stockholm region, followed by the Lund/Malmö and Uppsala regions, with 36 and 31, respectively; 24 are located in the Gothenburg region. The smallest cluster is in the Umeå region, with fewer than ten biotechnology DBFs. The Swedish pharmaceutical industry annually spends around 25% of its revenues on R&D, higher than the global standard of 17.5%.
This high percentage by international standards mainly reflects AstraZeneca’s large expenditures in its Swedish research centres, with around one third of the group’s total R&D investments, $3.1 billion, occurring in Sweden. Of this some 20% or $540 million is spent extramurally in Sweden (Benner and Sandström, 2000). Stockholm–Uppsala, in particular, contributes to Sweden’s relative strength in biotechnology research, mainly through the Karolinska Institute, Uppsala University, Stockholm University, SLU10 and the Royal Institute of Technology.
9 ‘Swedish DBFs are noted suppliers and R&D partners to leading foreign pharmaceuticals firms (e.g. Carlsson Research and Merck; BioVitrum and Amgen; Kario Bio and Wyeth).
However, the official http://www.sweden.se website notes that the following: ‘Both AstraZeneca and Pharmacia collaborate with numerous biotech companies, some of them Swedish…. The pharmaceutical companies Astra (now AstraZeneca) and Pharmacia (today part of Pfizer) have stimulated the growth of the Swedish biotech industry, not only in the pharmaceutical and medical sub-sectors but also, for example, in biotech tools and supplies. Examples are Prevas Bioinformatics contract solutions for AstraZeneca, Biovitrum and GE Healthcare while blockbuster drugs like Losec (AstraZeneca) and Celebrex (Pharmacia) were clinically trialled by Swedish clinical research organisations as were many others originating abroad (e.g. Lipitor, Norvasc and Zoloft for Pfizer;
Lipovas for Merck; and Paxil for Glaxo SmithKline).
10 SLU is the Swedish University of Agricultural Sciences.
These produce annually some 8,000 publications, co-host some 4,000 PhD students and employ some 2,200 scientists.
However, on publication interactions, Sweden’s collaborations revealed that 70% of co-authorships (1986–1997) were with other Swedish PROs, while 12%
were with US institutions and an equivalent share with UK and German co- authors together. Regarding R&D projects, McKelvey et al. (2003) found the opposite, that is, of 215 collaborations made by 67 actors (firms, universities and research institutes), 52 were between Swedish institutions and the rest involved overseas partners, these again being mainly with the USA and UK. This undoubtedly reflects the relative thinness of the pharmaceuticals and DBF market, particularly the former, in Sweden, which perforce stimulates links for industrial research with larger economy incumbents. This is underlined to a limited degree for patenting where Swedish biotechnology patents registered in the USA involved 62 jointly with US inventors. However, 202 were products of Swedish- only collaborations: a similar pattern prevailed for pharmaceuticals joint-patenting (VINNOVA 2003).
Hence, Sweden may be said to display a relatively typical European introversion in much of its exploration or basic research activity, including to some extent patenting, but is more outgoing where applied research with industry is concerned. Stockholm–Uppsala is the stronger with 56 firms and 1,126 employees, at least five strong research universities and around 1,640 employees in smaller biotechnology businesses in four Science Parks. However, Lund–
Malmö is a larger concentration at 104 than Stockholm–Uppsala. Medicon Valley is well placed in this respect, being home to 11 universities, 70 biopharmaceuticals companies (60% of the turnover of the Nordic pharmaceutical market) and 26 hospitals. Its academic institutions include, among others, Copenhagen and Lund universities, The Danish University of Pharmaceutical Sciences, and The Royal Veterinary and Agricultural University, as well as centres for diabetes and stem cell research, and a multidisciplinary centre for stem cell biology and cell therapy.
There are also 135,000 students in the area, more than 300 research groups, 4,000 Life Science employees and 27 local venture capital firms (Dorey 2003).
Pharmaceuticals firms have been key to the growth on the Danish side through the likes of Hansen Laboratories, Carlsberg Laboratory and Novo Nordisk, a global insulin supplier and partner of Biogen in early bioengineering of human insulin.
Medicon Valley Academy was formed in 1997 to ‘create, transfer and exploit knowledge’ with the aim of making it the most attractive bioregion in Europe by 2005. This academy is largely responsible for creating a sense of identity in the region, arranging networking events and also building relationships with other clusters in Scandinavia such as the Stockholm–Uppsala region.
Singapore’s government biotechnology initiatives started in 1987 with the establishment of the Institute of Molecular and Cellular Biology at the National University of Singapore, but became industrially serious within the 2000–2004 period. The aim was to build a biotechnology cluster around FDI, a policy that worked well in previous developmental stages, such as the policies in support of petrochemicals, electronics and ICT. Four new institutes in bioinformatics, genomics, bioprocessing and nanobiotechnology now exist at a cost of $150 million
to 2006. Public venture capital of $200 million has been committed to three bioscience investment funds to fund start-ups and attract FDI. A further
$100 million is earmarked for attracting up to five globally leading corporate research centres. The Biopolis is Singapore’s intended world-class R&D hub for the georegion. The Biopolis is dedicated to biomedical R&D activities and designed to foster a collaborative culture among the institutions present and with the nearby National University of Singapore, the National University Hospital and Singapore’s Science Parks. Internationally celebrated scientists, such as Nobel laureate Sidney Brenner, Alan Colman, leading transgenic animal cloning scientist from Scotland’s Roslin Institute, Edison Liu, former head of the US National Cancer Institute, and leading Japanese cancer researcher Yoshaki Ito, have also been attracted.
These are ‘magnet’ appointments meant to attract talent and create cluster conventions and practices among research centres and DBFs. The sector now numbers 38 firms of which 15 are indigenous start-ups and 23 FDI R&D, manufacturing, clinical research organisations and other services. Johns Hopkins, MIT, Duke University, Columbia University and the Indian Institute of Technology have established facilities in Singapore. Singapore’s Bioethics Advisory Committee advised acceptance of embryonic stem cell but not human cloning research, which is also a globally attractive locational factor, shared as we shall see with Israel, among others. Pharmaceuticals firms from overseas manufacturing in Singapore include Glaxo since 1989, Schering-Plough (1997), Genset (now Serono) (1997), Aventis (2000), Merck (2001), Wyeth (2002) and Pfizer (2004). R&D centres of the following firms are also present: Genelabs (1985), Becton Dickenson (1986), Oculex (1995), Perkin-Elmer (1998), Sangui (1988), Cell Transplants (2000), Schering-Plough (2000), Eli Lilly (2001), Surromed (2001), Affymetrix (2001), Novartis (2002), ViaCell (2002), PharmaLogicals (2002). Finally, clinical research organisation services are available from Quintiles (1995), Novo Nordisk (1999), Covance (2000) and Pharmacia-Upjohn (now Pfizer) (2000). Joining ViaCell in stem cells are indigenous DBFs ES Cell and CordLife, a few genomics firms such as APGenomics and Qugen, and a variety of drug discovery, bioinformatics and diagnostics firms mostly established since 2000. In brief, Singapore is host to a large number of mainly US and, to a lesser extent, European R&D laboratories of big pharma businesses. It has strength in public research activity and small signs of growth in stem cells exploration and exploitation activity. The benign regulatory environment allowing embryonic stem cells research is undoubtedly an attraction, which contextuated by Singapore’s celebrated ‘developmentalist state’
capabilities, will stimulate cluster growth as an ‘offshore’ research and production platform targeting the burgeoning Asian market.
Switzerland is another small country in which multinationals generally, and in big pharma specifically, are a notable feature of the economic landscape. Roche (Hoffmann La Roche) and Novartis (formerly Sandoz and Ciba-Geigy) are indigenous Swiss multinationals, the latter in the global top ten by market capitalisation, the former having slipped down the rankings in later years rather like Bayer and, to some extent, Aventis among former European majors. The Swiss government too in 2002 announced in favour of embryonic stem cells
research while banning embryo-creation purely for research purposes. Apart from Novartis and Roche, Switzerland also hosts one of the world’s largest biotechnology companies Serono, which in 2001 had a market capitalisation of $18 billion, ranking it third behind Amgen and Genentech. Serono and Amgen signed a licensing and commercialisation deal for Serono to sell a Multiple Sclerosis drug in the USA it had developed with Immunex, a Cambridge (MA) firm subsequently acquired by Amgen. Other prominent firms are Actelion, Cytos, The Genetics Company, bio-T, CELLnTEC, Debiopharm, GeneBio and Solvias. In addition to Serono, Actelion, Berna Biotech, Debiopharm and Basilea have several pharmaceuticals in clinical testing. Lonza Biologics is also Swiss and one of the largest biosynthesis firms in the world. Debiopharm funds cancer research projects at Tulane University, New Orleans.
Of the 200 Swiss biotechnology companies listed in 2003, around 40 are pure biotechnology firms (DBFs), the others being instrumentation and services firms that nevertheless link to many of the forty. Some 22% of the 200 are located in the Geneva–Lausanne ‘BioAlps’ region, ∼26% are in the Basel ‘BioValley’ region and about 35% are in the Greater Zurich region. Zurich has a Functional Genomics Research Centre. Since 2000, 45 new biotechnology businesses have been established, 15 of which were spinouts from the Swiss Federal Institute of Technology in Lausanne and Zurich and 10 were spinouts from other Swiss universities. The remainder came from domestic and foreign subsidiary industries.
Of the 30 or so public companies, many such as Genedata (Basel), Cytos (Zurich) and GeneProt (Geneva), a proteomics DBF, have long-term collaborative research, opinion and licensing agreements with the likes of Novartis and Roche.
International collaborations extend to the partnership between the University of Minnesota and the Swiss Federal Institute of Technology focused upon medical technology. This arises in part from Minneapolis devices firm Medtronic’s subsidiary located in Switzerland and its collaboration with the likes of Disetronic, a leading Swiss insulin-pump manufacturer. In conclusion, Switzerland is a small, capable knowledge-intensive biosciences economy. It has leaders in big pharma, global DBF capability and numerous smaller DBFs and spinouts concentrating on leading-edge proteomics and other post-genomics treatments. It is highly connected globally, but especially to the US megacentres through big pharma and its leading clusters in Zurich, Basel and Geneva–Lausanne.