Small and Medium Biopharmaceutical Enterprises in North America and Europe - Biotechnology Clusters, Funding Characteristics and Regulatory Landscape

1 Table of contents 5
1.1 List of Tables 7
1.2 List of figures 8
2 Introduction 9
2.1 Report Guidance 9
3 Small and Medium Biopharmaceutical Enterprises - Overview of the Present Biotechnology SME Sector 11
3.1 Small and Medium Enterprise Characteristics 11
3.1.1 SMEs Across Different Industries and Geographies are Small Enterprises 11
3.1.2 SMEs Have an Entrepreneurial Management Structure in Place with Central Leadership Allowing Quick Decision Making 12
3.1.3 Biotechnology SMEs are Non-Profit Making Companies Due to a Lack of a Marketed Product Portfolio 12
3.1.4 SMEs Lack Commercialization Capabilities and Should Focus on Industry Partnerships and Outsourcing 13
3.2 Lifecycle of a Small and Medium Enterprise 13
3.3 Small and Medium Enterprise and Patents 14
3.4 Biotechnology Clusters and Role in Development of SME 15
3.4.1 European Clusters 15
3.4.2 North American Clusters 17
3.4.3 Success Factors for Clusters 19
4 Small and Medium Biopharmaceutical Enterprises – Market Characterization 21
4.1 Composition of the Biotechnology Industry: Small and Medium Enterprises Dominate 21
4.1.1 Composition of SMEs by Geography: North America has Higher Proportion of Biotechnology Companies 22
4.1.2 Composition of SMEs by Size: The Majority of SMEs are Small, Employing Less than 250 Employees 24
4.1.3 Composition of SMEs by Therapeutic Class: Most SMEs are Active in Cancer Research 24
4.1.4 Biotechnology Drug Pipeline: SME Contribution Important 26
4.2 Drivers and Restraints 27
4.2.1 Drivers 27
4.2.2 Restraints/Challenges 28
5 Small and Medium Biopharmaceutical Enterprises – Funding Scenario 30
5.1 SME Lifecycle and Sources of Funding 30
5.1.1 Pre-Seed and Seed Stage: Angel Investor and Government Grants are the Key Sources of Finances 31
5.1.2 Start up Stage: Venture Capital Firms Provide Major Funding 31
5.1.3 Early Growth and Expansion: SMEs Feel Funding Pressure, Big Pharmaceutical and Biotechnology Companies Take an Interest 31
5.2 Funding Activities of SMEs 31
5.2.1 Venture Capital Firms: In the Absence of Exit Opportunities they are Unable to Raise Sufficient Funds for New SMEs 33
5.2.2 Initial Public Offerings: Slowdown in IPO Market Impacts Availability of Growth Stage Capital 33
5.2.3 Mergers and Acquisitions 34
5.3 The Future Funding Scenario of Biotechnology SMEs Looks Balanced 36
5.4 Gaps in SME Funding 36
5.5 Filling the Funding Gap 37
5.5.1 Government Support: Need to Increase Focus on Growing SMEs 38
5.5.2 Industry Players: Need to Invest Early in SMEs 38
5.5.3 VC and Angel Investors: To Continue their Support 38
6 Small and Medium Biopharmaceutical Enterprises – Regulatory Environment and Government Support 39
6.1.1 Overview of Regulatory Environment 39
6.1.2 Regulatory Environment and Small and Medium Enterprises 40
6.2 The Current State of Support for SMEs – Europe 41
6.2.1 Hard Initiatives: Grants and Funding 42
6.2.2 Soft initiatives – Guidance and Advice 44
6.3 Current State of Support for SMEs – North America 45
6.3.1 Funding and Assistance Structures Present in North America 45
6.3.2 Hard Initiatives: Grants and Funding 46
6.3.3 Soft Initiatives – Guidance and Advice 49
7 Small and Medium Biopharmaceutical Enterprises – Deals Analysis 50
7.1 Mergers and Acquisitions of SMEs in North America and Europe 50
7.1.1 Sciele Pharma acquired Addrenex 52
7.1.2 Celldex Therapeutics acquired CuraGen Corporation 52
7.1.3 Affitech AS merged with Pharmexa A/S 52
7.1.4 Cell Genesys and BioSante merged to form BioSante 52
7.1.5 Johnson & Johnson acquires Cougar Biotechnology 52
7.1.6 Takeda acquires IDM Pharma 53
7.1.7 Merck acquires Insmed's follow-on biologics platform 53
7.1.8 Bristol-Myers Squibb acquires Medarex 53
7.2 Licensing Activities: SME Pipeline Targeted for In-licensing 53
7.2.1 Preclinical 55
7.2.2 Phase I 59
7.2.3 Phase II 61
7.2.4 Phase III 63
7.2.5 Approved 65
7.3 Out Licensing of Biotechnology SMEs to Large Pharmaceutical Companies 67
8 Small and Medium Biopharmaceutical Enterprises in North America and Europe – Competitive Landscape 69
8.1 Competitive Benchmarking 69
8.2 Key Player Profiles 70
8.2.1 Clovis Oncology 70
8.2.2 Pacific Biosciences 70
8.2.3 ActoGeniX 71
8.2.4 Aileron 72
8.2.5 BioVex 73
8.2.6 AC Immune 74
8.2.7 Avila Therapeutics 74
8.2.8 Chroma Therapeutics 75
8.2.9 KaloBios 76
8.2.10 Achaogen 77
9 Small and Medium Biopharmaceutical Enterprises in North America and Europe - Conclusion 79
10 Appendix 80
10.1 Market Definitions 80
10.2 Abbreviations 80
10.3 Research Methodology 81
10.3.1 Coverage 82
10.3.2 Secondary Research 83
10.3.3 Primary Research 83
10.3.4 Expert Panel Validation 83
10.4 Contact Us 83
10.5 Disclaimer 84
10.6 Sources 841.1 List of Tables
Table 1: Definition of Small and Medium Enterprises in Key Countries 12
Table 2: Country Break-up of Healthcare Biotechnology SMEs in North America and Europe, 2009 24
Table 3: Biotechnology SMEs, Key M&A activities in 2009 51
Table 4: Biotechnology SMEs, Licensing Agreements for Drugs in the Preclinical Stage, 2009 56
Table 5: Biotechnology SMEs, Licensing Agreements for Drugs in the Phase I Stage, 2009 59
Table 6: Biotechnology SMEs, Licensing Agreements for Drugs in the Phase II Stage, 2009 61
Table 7: Biotechnology SMEs, Licensing Agreements for Drugs in the Phase III Stage, 2009 63
Table 8: Biotechnology SMEs, Licensing Agreements for Approved Drugs, 2009 65
Table 9: Benchmarking of Key Biotechnology SMEs, 2009 691.2 List of figures
Figure 1: Lifecycle of an SME, 2010 14
Figure 2: Number of Clusters and Networks by Country in Europe, 2010 16
Figure 3: Key Biotechnology Clusters in Europe, 2010 16
Figure 4: Key Biotechnology Clusters in the US, 2010 18
Figure 5: Key Biotechnology Clusters in Canada, 2010 18
Figure 6: Factors for Success of Biotechnology Clusters, 2010 19
Figure 7: Composition of the European and North American Biotechnology Industry, Number of Companies, 2009 21
Figure 8: Composition of the European and North American Biotechnology Industry, 2009 22
Figure 9: Number of SMEs by Geography, 2009 23
Figure 10: Break-up of SME Sector by Country, 2009 23
Figure 11: SME by Size of Companies, 2009 24
Figure 12: Number of SMEs by Therapeutic Areas, 2009 25
Figure 13: Therapeutics Areas of Focus for SMEs, 2009 26
Figure 14: Number of Drugs in the Pipeline in the Biotechnology Industry, 2009 27
Figure 15: Sources of SME funding at Different Stages of its Lifecycle, 2010 30
Figure 16: Financing Activities: Biopharmaceutical and Pharmaceutical Industry, 2006-2009 32
Figure 17: Financing Activities: Biotechnology SMEs, 2006-2009 32
Figure 18: Number of Companies Receiving VC Funding, Biotechnology SMEs, 2006- 2009 33
Figure 19: Number of IPOs/Offerings, Biotechnology SMEs, 2006-2009 34
Figure 20: Number of Companies Acquired, Biotechnology SMEs, 2006-2009 35
Figure 21: Trends in Funding, 2008-2009 36
Figure 22: Filling the Funding Gap for SMEs, 2008 37
Figure 23: Decline in NME Approvals by the FDA, 1996–2008 40
Figure 24: European Union Funding for the Development of SMEs and Innovation, 2010 42
Figure 25: FP7 Funding Activities, 2008-2013 44
Figure 26: Government Support for SMEs, the US, 2010 46
Figure 27: Government Support for SMEs, Canada, 2010 46
Figure 28: SBIR Program Grants for Different Stages of Development of Innovation, 2010 48
Figure 29: Licensing Activity by Licensor Type, 2008-2009 54
Figure 30: Licensing Activity of Biotechnology and Pharmaceutical Companies, 2009 55
Figure 31: Licensing Activity of Biotechnology SMEs by Stage of Development, 2009 55
Figure 32: Licensing Activity of Top Ten Pharmaceutical Companies, 2004-2009 67
Figure 33: Licensing Activity of Top Ten Pharmaceutical Companies, 2004-2009 68
Figure 34: Clinical Trials Analysis for ActoGenix, 2008 72
Figure 35: Clinical Trials Analysis for BioVex, 2008 73
Figure 36: Clinical Trials Analysis for AC Immune, 2008 74
Figure 37: Clinical Trials Analysis for Chroma Therapeutics, 2008 76
Figure 38: Clinical Trials Analysis for KaloBios, 2008 77
Figure 39: Clinical Trials Analysis for Achaogen, 2008 78
Figure 40: Methodology 82