Company Landscape

A different picture emerges depending on which criteria you use to compare the Swedish biotech industry to that of other countries. Sweden’s approximately 220 biotech companies puts it at number nine worldwide for the number of firms (number four in Europe). If the product pipelines in the field of medicine are compared (e.g. in the 2007 global report from Ernst&Young), Sweden ranks behind Great Britain, Switzerland, Germany and France, as well as Denmark. As regards the number of listed companies, with 17 to date, Sweden is in third place, behind Great Britain and Germany.

Geographical distribution of companies in Sweden.

However, it is safe to say that in a small country such as Sweden, which has a population of only nine million, biotechnology occupies an important place in the Swedish economy. This is also shown by the economic growth. According to data from the SwedenBio trade association, the biotech industry was able to show an annual growth rate of ten percent in the years from 1995 to 2003. According to a statement from the foreign trade office in Stockholm from 2007, the biotechnology sector employs approximately 23,000 people and achieved a turnover of around seven billion euros. These figures are largely down to the large pharma concerns, which are playing a significant role in the development of Swedish biotechnology. This applies in particular to the large and highly traditional pharmaceutical firms Astra (now AstraZeneca) and Pharmacia (today owned by Pfizer) as well as KabiVitrum, the predecessors of Pharmacia. These companies have propelled growth in the biotech industry not only in research and development (R&D), but also in the area of the service-provision and supplies.

Likewise, the first commercial application of biotechnology in Sweden was thanks to the efforts of the pharma industry and was based on DNA hybrid technology from the US-American company Genentech. The Swedish company KabiVitrum received a license for this in 1978 and in 1987, in co-operation with Genentech, brought the world’s first recombinant human growth hormone, Genotropin, on to the market. In 1990, KabiVitrum merged with the Swedish enterprise Pharmacia, which was itself taken over by Pfizer in 2003. The second largest pharmaceutical enterprise in Sweden, Astra, began work in the eighties with the technological deployment of recombinant DNA. Astra merged with the British Zeneca PLC in 1999, becoming AstraZeneca.

Source: Astrazenica

Pharma firms such as Astrazeneca have a significant influence on the biotech scene in Sweden. Source: Astrazeneca

More than 70% of the 23,000 employees in the biotechnology sector work for just two medicine firms - Pfizer and AstraZeneca. Taking turnover and employment figures as a guide, the Swedish biotechnology industry is clearly dominated by these pharmaceutical enterprises. Many biotech companies in Sweden have their origins in the restructuring of Pharmacia: Biovitrum, Pharmacia Biotech (today a part of GE Healthcare), Active Biotech or Pharmacia Diagnostics all have this common background. However, Astra has also had a role to play: the Stockholm-residents Medivir emerged from Astra in the late 80s.

The majority of Swedish biotech enterprises are medium-sized, with most concentrated on medical fields such as the development of medicines or diagnostics (54%), followed by the field of food and nutrition and the paper and pulp industry. There is also some activity in the field of green biotechnology.

Aside from heavyweights such as BioVitrum, which employs over 500 and has a market capitalisation of approximately 560 million, the proportion of small and medium-sized businesses (SMEs) in the industry with less than 100 employees is around 93%. The biotech SMEs have a high research and knowledge intensity; in 1999, in a survey for the Swedish Agency for Innovation Systems (VINNOVA), 93% of all SMEs confirmed their cooperation with academic research groups. This can also be seen in the history of some enterprises. For example, the Goeteburg-based Neurosearch (previously Carlsson Research), which was founded by Nobel Prize winner Arvid Carlsson. Angiogenetics Sweden in Stockholm was also founded by a team of young researchers from the Karolinska Institute and Goeteboerger University.

Geographical focus on Stockholm and Lund

Many Biotech enterprises in Sweden are therefore also located near universities undertaking extensive medical research and can be roughly broken down into four clusters: the regions Lund Malmoe, Stockholm Uppsala as well as Goeteborg and Umeå. Nearly half of all Biotech enterprises in the region are located in Uppsala, although South Sweden has also emerged as an attractive location - in particular through its cooperation with Denmark, whereby the Oeresund region has been retermed "Medicon Valley". R&D-intensive companies such as Novo Nordisk, AstraZeneca or LEO Pharma are the main drivers in the structure of Medicon Valley, making the Danish side of the valley moderately more successful than the Swedish.

Altogether, 17 biotech enterprises in Sweden are listed on the stock exchange, putting them at a respectable third place in Europe. After the 2005 IPO from Orexo ended many years of stagnating development in the area of biotechnology at the Stockholm stock exchange, 2006 brought four new primary offerings, including BioVitrum, which, with 562 million euros, is still the highest market capitalisation of all European IPOs on the biotechnology market (Ernst & Young, Global Report 2007). In recent years, the stock exchange landscape in Northern Europe has established a set of uniform standards: thus, for example, the Stockholm Börse OM merged with the Helsinki HEX stock exchange to create the Northern Europe-wide operating Börse OMX, which offers special lists/registers for each country. Since 2005, the similar Alternative Investment Market (AIM) at the Londoner Stock Exchange, under the name First North and which requires less strict conditions, has also offered new young companies the possibility to carrying out an IPO. This was first set up in Copenhagen but since June 2006 has also been possible in Stockholm under the title "Nya Marknaden". In the meantime, 111 companies are listed in the register (?), among them a number from the Swedish Biotech industry. The company Genovis first moved in 2006, and Tripep are also using this opportunity to change from the ' normal' Stockholm stock exchange to a less regulated market.

Biotech pipeline well stocked

According to a study from SwedenBio from April 2007, the Swedish biotech pipeline contains 110 products in clinical development, including 59 from AstraZeneca alone. The most important indication field are cancer, followed by illnesses of the central nervous system and metabolic illnesses. The speciality of 61% of all developments of Swedish Biotech companies is the chemical synthesis of ‘small molecules’; the remaining third concentrates on the development of larger molecules such as anti-bodies.

Source: SwedenBio, April 2007

In 2002, seven Swedish biotech firms - Active Biotech, Amersham Bioscience, Biovitrum, KaroBio, Medivir, Melacure and Pharmacia diagnostics created the trade association SwedenBIO, which is aimed at better communicating and coordinating the interests of the Swedish biotechnology industry with government, the scientific community and investors. Meanwhile, SwedenBio, with more than 60 members, represents over 80% of the biotech industry in Sweden. Within Northern Europe, the Swedish Biotech cluster has also affiliated ScanBalt, the network of every Life Science networs within the Baltic Sea states, which was initiated in 2001.