Barcelona: A Life Sciences Hub in Southern Europe
By Lluís Esquerra
Posted: 13th July 2017 09:45Barcelona is one of the fastest rising European cities in recent years, which for different reasons every reader of this article can identify in their own particular way. Health professionals are also familiar to a greater or lesser extent with Barcelona’s current status and potential in the life sciences sector, which have made it one of the most promising European centres in this field, especially in southern Europe. This article briefly describes the factors underlying this affirmation.
Manufacturing tradition in the chemical and pharma industries
Barcelona is the capital of Catalonia, one of Europe’s most dynamic regions from a business standpoint, and traditionally the most industrialised region in Spain. In Barcelona the industrial revolution took place as early as in the 19th Century similarly to the other European industrial poles. This revolution occurred unevenly in Spain.
Catalonia now accounts for about a quarter of all Spanish manufacturing output, and a large part of this output is in the chemical and pharma industry, by local and multinational firms.
This is why, since as early as the beginning of the 20th Century in certain cases, some of the large European multinationals in the chemical and pharma industry, including, among many others, Bayer, Basf, Novartis, Boehringer Ingelheim, Sanofi, Pierre Fabre or Merck, have established their headquarters in the Barcelona area. These live alongside Catalan companies Grifols, Almirall, Esteve, Ferrer, Kern Pharma, Lacer or Uriach (one of Europe’s earliest pharmaceutical companies), to mention a few prime examples.
The Catalonia BioRegion
All in all, the so-called Catalonia BioRegion had 734 companies engaged in the life sciences sector in September 2015. That number broke down into 221 biotechnology companies, 46 pharma companies, 94 innovative medical technology companies, 208 providers of engineering, 139 professional and consulting services firms and 26 active investment organisations.
The BioRegion companies obtained in 2015 revenues amounting to €14,360 million, and employed over 42,000 employees.
According to the OECD, in 2013 Spain had 554 biotechnology companies, which placed below only France, the US and Germany (there are no data for the UK and Japan) and ahead of countries such as Italy or Israel. Catalonia is home to 22.45% of all the Spanish biotechnology companies.
The Catalan biotechnology sector is broadly supported by two local institutions: BioCat, a public-private foundation promoting the BioRegion’s activities, and CatBio, the business association for companies in the sector. Asebio is the business association for Spain as a whole.
Any account of recent success stories among the biotechnology companies based in Catalonia, in terms of either investment transactions or of licensing agreements would have to mention Oryzon Genomics, AB-Biotics, Reig Jofre, Minoryx Therapeutics, Palobiofarma or Aelix.
Public and private healthcare infrastructure
It is widely acknowledged that Spain has a very advanced health system. Barcelona in particular has a longstanding tradition of public and private clinics operating to extremely high standards of quality. These are frontrunners in healthcare and for their intense research activity. Barcelona has made its health services into one of its best-known signs of excellence.
Catalonia has 15 university hospitals and nine research institutes, providing workplaces for some 5,000 researchers.
An example of a recent initiative is the Barcelona Clinical Trials Platform (BCTP), aimed at attracting more clinical research to Catalonia. With its sights set on positioning Catalonia as one of the top five European territories in the conduct of clinical trials, it brings together the most important centres in Catalonia by trial volume, to improve the coordination, integration, quality and speed of clinical research.
As of January 2015, unofficial statistics showed that there were more than 2,500 on-going clinical trials in the hospitals of the BioRegion, mostly in the field of oncology.
University and knowledge infrastructure
The BioRegion has 89 research institutions (including, besides the 15 university hospitals mentioned above, 11 universities offering life sciences courses, 13 sciences and technology parks with activities related to life sciences, seven technology centres and two large science facilities).
As many as three Catalan universities appear in the top 200 in the Times Higher Education ranking for 2015, and three universities in the QS Top 50 under 50 in 2014. Barcelona is the second city worldwide in the number of universities on this ranking. The highest number of universities in the Top 50 under 50 is held by Catalonia.
In 2013 Catalonia attracted the second highest number of grants per inhabitant from the European Research Council, largely due to the success of the biomedical industry, which received 35% of all grants obtained. Catalonia received 53% of all the grants that the European Research Council awarded to Spanish scientists.
On the subject of scientific output in the field of life sciences, Catalonia produces 3.15% of all European publications, contributes 0.99% of the worldwide output and 29% of all publications in Spain.
Added to this, two of the 10 best European business schools (IESE and ESADE) are in Barcelona.
For a range of reasons, Barcelona has established itself as a technology pole for southern Europe. Alongside other already established European cities, it is, so the experts say, fast becoming one of the top places for medical technology and digital health research. Of the 734 companies in the life sciences sector, 200 conduct work in the field of medical technology and employ over 11,200 workers.
The process of convergence of health and technology has opened up excellent prospects for Barcelona. It is a known fact that technology innovates faster than the traditional pharma industry. A large part of specialised investment in traditional technology companies, which mature earlier than biotechnology companies based on therapies, may swiftly be attracted by the medical technology and digital health subsector.
Private equity and investment
Catalonia led private equity transactions in Spain in 2015, by being the venue for 168 transactions out of a 575 total (almost 30%), and experienced sharp increases in the level of investment and transactions in early stage(56 and 33%, respectively). This trend appears to be confirmed in the provisional data for 2016.
Catalonia is home to 26 investment firms in the field of life sciences. Of these, five specialise in this sector (Ysios Capital, Caixa Capital Risc, Healthequity, Inverready and IUCT), eight are private equity firms, seven are business angel networks and five corporate or banking funds.
A BioRegion powered by Barcelona undeniably exists and has all the necessary components to become the largest hub in the life sciences sector in southern Europe.
Lluís Esquerra is a partner of the Corporate Law and Commercial Contracts practice of Garrigues Law Firm in Barcelona, Spain.
He is head of the Garrigues Life Sciences industry and has extensive experience in general advice and domestic and international transactions in the chemical and pharmaceutical industries.
He regularly appears in the main international legal directories, such as Chambers&Partners, The Legal 500, Best Lawyers and IFLR1000, among others, in various practice areas.
Lluís is a member of the Barcelona Bar Association and Vice-chairman of its Corporate Law Committee and is a member of its Expert Group on Corporate Law.
Lluís can be contacted on +34 91 514 52 00 or by email at firstname.lastname@example.org