Spain's Biotech Revolution

Challenges

As players in an emerging biotech market, Spanish companies still have some challenges ahead. The first and most significant one, many observers say, is access to financial resources. Spanish investors are only now beginning to understand the potential of biotechnology and make a long-term commitment. And those same Spanish investors are crucial in getting companies to a place where they will be attractive to international investors.

That’s the position Cellerix, the Genetrix spinoff, has already reached. Genetrix is working on finding partners in Europe, Japan, and the United States. “When you turn to outside venture capitalists, they always want to have a Spanish local investor who takes the lead, and that’s been difficult in the past,” says Claudia Jimenez.

The small (though growing) amount of funds available for new companies means that many are underfunded, according to Alec Mian, the CEO of ­Genmedica in Barcelona.
Mian, a Canadian who ran a biotech company in Cambridge, MA, for eight years, had been living in Barcelona and was considering moving to London to head another biotech company when he was contacted by Antonio Zorzano at the IRB to head a company based on Zorzano’s research into an oral replacement for insulin.

This was a high-risk project, but “if successful, such a discovery and development would put Barcelona on the international biotechnology map,” says Mian. “So even though the risk of the compound was high … I decided to stay and give it a shot.”

Another bottleneck is “how you manage the knowledge, more than in the creation of the knowledge,” according to Luis Ruiz of Advancell. “We’ve already learned a lot, and we all have more experience now.”

Joan Guinovart, director of IRB Barcelona, takes the management issue one step further. “We don’t yet have any biotech millionaires,” he says. “I think that would be a good incentive” to young scientists and business entrepreneurs starting out in biotechnology.

Taking on the Challenges

Despite the challenges in accessing investment, funding opportunities for biotechnology companies have increased dramatically in recent years as venture capitalists in Spain have learned more about the sector, and as companies start to mature and attract investment from outside the country. Many companies describe recent large-scale investments from Europe.

Genetrix is initiating the first venture capital fund specializing in biomedicine, named Vanguardia BioFund 1. It expects to fund startups and expanding companies, with about 70 percent of the investments to flow to Spanish companies.

In terms of management, the latest crop of CEOs now have years of ­experience and are beginning to bring their know-how to a new generation of ­startups. In addition, the infrastructure to support technology transfer is ­growing ever stronger thanks to government, academic, and industry commitment, both on a national and a regional level.

The change in the last five years illustrates this growth. Guinovart is one example. Ten years ago he patented a potential antiobesity drug—and licensed it to Bayer. The drug is now in phase II clinical trials. “Now it’s the other way around,” he says. “You try to exploit the patent yourself.”

PRBB in Barcelona is tackling many issues in business skills development with a devotion nearly equal to its focus on world-class scientific research. “We’re focusing on developing companies in the future, but first, the most important [thing] is to have the best science,” says project director Reimund Fickert. To develop the knowledge base in the region about issues related to patents, finances, management, and similar issues, the research park has developed a series of executive courses geared to biotech executives and managers, venture capitalists, business students, and others. The courses attract lecturers from the top ranks of biotechnology around the world; for three days at a time, the programs provide a combination of serious education and equally serious networking.

The Spanish government has demonstrated its commitment to technology transfer through Ingenio 2010, a program that includes more than $1 billion in grant money for research and for efforts to encourage collaboration between the public and private sectors.

Spanish pharmaceutical companies are joining together to advance the industry. Zeltia, Rovi, Faes Farma, Lipotec, and Dendrico have formed an alliance and a common investigation project called Consorcio Nanofarma, a multidisciplinary research project on nanomedicine and drug delivery systems.

The rapid growth of the industry, coupled with the investment in world-class research centers, has increasingly called Spanish researchers home from around the world to contribute to the country’s, and the world’s, focus on the next wave of biotechnology.