A record-breaking 1.6 billion francs of new capital, the role of the Romands and an earthquake: Swiss biotech soars. And surprises.
Of course, I would rather tell you some bad news. Because, as we all know: good news are no news. But bare with me; I promise I will not bore you – and sometimes success stories are a good read, too. Take a few minutes to go with me through astonishing facts of the recently published Swiss Biotech report.
The earth in Biotech shakes
Let`s start with an earthquake: The year 2017 began with monumental news for the Swiss biotech sector. The Board of Directors of Actelion recommended to its shareholders to accept the takeover offer from US giant Johnson & Johnson. The price of 30 billion dollar was globally the largest amount paid in 2017 for a transaction in the life sciences industry.
The offer was also very attractive for Actelion’s shareholder base as the purchase price was not only paid in cash but also included a contribution in kind in the form of new shares for a spin-off from Actelion, named Idorsia. The company started trading at SIX Swiss Exchange on 16 June and was among the best performing life sciences shares trading in Switzerland in 2017.
The Swiss biotech industry generated revenues of 3’791 million francs, compared with 3’314 million francs in 2016. Some of the smaller public companies were able to reduce the overall net loss situation through an increase in product sales as well as income generated from milestone payments from their collaboration partners.
The Swiss biotech sector was able to attract more than 1.6 billion francs of new capital in 2017. This amount was split as follows between the public and private companies:
- Public companies: 978 million francs, mainly follow on financings by Evolva, Idorsia and Santhera
- Private companies: 666 million francs, of which almost 200 million francs was collected by ADC Therapeutics from Lausanne
- The only Swiss biotech IPO was achieved in January 2017 by the Geneva-based company ObsEva which was almost reaching an initial offering of 100 million dollar at the NASDAQ.
C’est les Romands
An interesting observation around the financing is the fact that companies in the French part of Switzerland were able to attract a larger portion of the additional funds invested in Switzerland. This can almost be seen as a trend over the last four years and is also reflected in the fact that five out of the last six Swiss biotech IPOs were done by companies from the Arc Lemanique area.
Yes, Swiss biotech companies are attractive
Swiss biotech companies continued to be an attractive target for acquisitions by pharma or large biotech companies. Besides the Johnson & Johnson / Actelion deal, the Irish Malin plc. acquired privately held Cilatus Biopharma, US based Vir Biotechnology acquired Humabs BioMed, and German Elanix Biotechnologies acquired Inno 4 Cell in a capital increase by way of contribution in kind.
Looking at all the announced, new or extended collaborations in Switzerland in 2017, the list might almost be labelled a ‘Who’s Who’ of the life sciences industry. Some deals to support this statement are the following:
- Anokion with Celgene
- Idorsia with Janssen Biotech and Roche
- InSphero with Charles River Laboratories, NIH and Pfizer
- NovImmune with Shire
- Numab with Ono Pharma and Kaken Pharma
- Piqur with Pierre Fabre
- Selexis with Merck KGA, Sanofi and Takeda
Private equity companies entering biotech
Another interesting development in 2017 was an uptick in ‘portfolio management’ type of deals, with several pharmaceutical companies partnering with private equity firms for assets that may not be ‘top of the list’ from the pharmaceutical company’s perspective, but that could still yield high returns with some investment.
It will be interesting to observe when such private equity firms will also start to approach larger biotech companies as those increasingly face similar portfolio management and Research & Development prioritization questions as pharma companies. To address this new trend, Versant Ventures and Ridgeline Therapeutics opened a new discovery engine with its own laboratories in the Basel Technology Park.
We will keep you posted right here on our EY Switzerland Blog. Stay tuned!