Market Information
Europe

Biotechnology Sector Profile: Switzerland

May 2002

Werner Naef
Commercial Officer
Trade and Investment Division
Canadian Embassy
Kirchenfeldstrasse 88
CH-3005 Berne, Switzerland
Tel.: (011-41) 3135-73206 (direct)
Fax: (011-41) 3135-73210
E-mail: werner.naef@dfait-maeci.gc.ca
Internet: http://www.dfait-maeci.gc.ca/switzerland 

Market Overview

Switzerland has a long tradition of excellence in the chemical and pharmaceutical industries. Along with the multinational giants such as Novartis, Roche, Syngenta and Serono, there is a flourishing bio-industry composed of small and medium-sized companies that are active in the pharmaceutical sector, in engineering technologies, or as suppliers to these sectors and its multinational enterprises (MNEs). There are roughly 500 Swiss companies involved in life sciences, of which 260 are in activities closely related to biotechnology. A total of 130 Swiss firms focus wholly on modern biotechnology, as defined by the European Federation of Biotechnology (EFB). The total number of biotechnologyrelated jobs is estimated at just under 10,000, with substantial clusters in the greater Zurich area (some 80 companies), the Basel area ("Bio-Valley" with some 70 companies) and along the north shore of the Lake of Geneva ("BioAlps" with some 30 companies).

The industry is well-diversified: 16% specialize in therapeutics and diagnostics, 13% specialize in each of platform technologies and engineering, 7% are in contract research and manufacturing, 5% are in bio- and specialty chemicals, 4% are in environmental technologies, 3% specialize in each of food processing and plants/agriculture, while 36% are service providers/suppliers. Today, the Swiss Association of Biotechnology Companies (ASBC) in Zurich has 110 member companies. It is a member of the European Association for Bio-industries (EuropaBio: http://www.europabio. be). In Europe, the Swiss biotechnology industry ranks fifth, with Germany taking the lead.

The use of biotechnology for health-related research and product development enjoys popular backing. In June 1998, the Swiss voted in favour of encouraging research in genetic engineering. Even though this is true, there is still widespread reluctancy within the Swiss population toward genetics in foodstuffs.

With an overall expenditure of 10,675 billion Swiss francs in the year 2000, Switzerland has one of the world's highest levels of research expenditure relative to gross domestic income (2.64%). This ranks Switzerland fifth after Sweden, Finland, Japan and the United States. Since over 75% of Swiss research is financed by the private sector, Switzerland is particularly strong in applied research. In 2000, Swiss companies invested 9 billion Swiss Francs in research and development (R&D) abroad. In Switzerland, 52,260 jobs are directly related to R&D. While public expenditures for R&D have stagnated, those of the private sector have increased by 12% since 1996, both domestically and abroad.

Switzerland is well-known for its first-class universities and technology institutes that are heavily involved in industrial biotechnology and related research. Its public per-capita expenditure on education is well ahead of the United States, Japan, France, Germany and the United Kingdom. In Switzerland, 75% of all students complete an industrial apprenticeship while pursuing their formal studies. Thus, well-trained multilingual staff, the availability of financing, low taxes, excellent infrastructure, sound legislation, a high standard of living and entrepreneurial support programs offer the Swiss biotechnology sector a bright future.

Switzerland also holds the world's top position in scientific publications (all sectors combined).

Opportunities

Biotechnology is tailored to Switzerland, since this technology is based on renewable resources, acquired knowledge and innovation. Having scarce natural resources, Switzerland is committed to further investment in this expanding industry, and has engaged in an extensive government priority program to encourage biotechnology. The Swiss Priority Program (SPP) Biotechnology of the Swiss National Science Foundation, with a funding of 93 million Swiss francs, supports basic research projects in a wide variety of biotechnology subsectors such as pharmaceuticals, process technology, food and plant biotechnology, bio-electronics, biosafety research and neuro-informatics. In 2001, the SPP was incorporated into the National Centres of Competence and Research (NCCR), which are intended to support, over a four-year time frame, 8 to 10 projects in all sectors with funds of 4 to 6 million Swiss francs each. Biotechnology projects are the majority. The other government-supported program, which is administered by the Commission for Technology and Innovation (CTI), provides funding for applied research, as well as funding and coaching for startups and university spinoff companies. There have been 24 startup companies in the life sciences sector within the past two years.

Other private and public initiatives include MedTech, which supports entrepreneurs in medical technology with a budget of 30 million Swiss francs up to 2003; BioValley, which was started in 1997 to foster networking among biotechnology circles in Switzerland, Germany and France; and a national business plan competition that was launched in 1998 by McKinsey and the Swiss Federal Institute of Technology in Zurich, which has more than 20% of submitted projects coming from the biotechnology sector.

In the recent past, two major biotechnology conferences were held in Switzerland. Bio-Bridge, held in Geneva in the fall of 2001, mainly highlighted the biotechnology hubs of Geneva/Lausanne and Montreal/Quebec (http://www.biobridge.ch). Bio-Square, held in Zurich at the end of February 2002, focused on the commercialization and financing of biotechnology (http://www.ebdgroup.com/biosquare). A third event held in Switzerland in May 2002 was called Bio-Equity (http://www.ebdgroup.com).

Some Canada-Swiss events related to life sciences have taken place in the past two years, including "road shows" by Canadian biotechnology companies and venture capitalists to Geneva and Zurich in March 2001 and February 2002, and a Forum for Growth in Life Sciences, which was held in Toronto in October 2001, and involved Industry Canada and the Swiss Embassy in Ottawa. A strong Swiss delegation attended Bio-Contact in Quebec in October 2001, and is again expected to take part in BIO2002 in Toronto in June 2002.

Market Access Considerations

Clinical trials of drugs carried out in Switzerland are recognized by the FDA. Also, with a wide choice of venture capital and private equity funds, Switzerland offers one of Europe's best environments for biotechnology companies. Initial Public Offers (IPOs) benefit from the influential role played by institutional investors and the substantial presence of Swiss blue-chip companies, as well as foreign-market participants. While the legal requirements for IPOs reflect European standards, the related listing costs in Switzerland are well below average. In international comparison, Switzerland is top in terms of stock market capitalization as a percentage of gross domestic product (GDP). The Swiss Stock Exchange SWX (http://www.swx.com), with its 60 members - a quarter of which are foreign banks - represents an important link between international financial institutions. In 1999, SWX introduced a market segment that was particularly designed to meet the needs of young companies, with reduced minimum capital requirements and a shorter operating track record.

Major Competition

Swiss scientists regularly visit the most important conferences and trade shows on biotechnology, such as BIO (2001 in San Diego; 2002 in Toronto), Biotechnika in Hannover, BIO in Munich and ILMAC in Basel, Switzerland. California's Bay Area, San Diego and Boston are the centres of excellence that are best-known in the Swiss biotechnology industry.

Canadian life sciences companies now in Switzerland include Millenium Biologics, MDS Pharma Services/Neurotech, Lymphosign, NeuroMolecular and GenomicsOne.

Other Useful Information Sources/Web Sites

For market reports: http://www.infoexport.gc.ca/ch 

Bioweb, a public information Web site: http://www.bioweb.ch 

Swiss National Science Foundation: http://www.snf.ch 

Commission for Technology and Innovation
(Office for Professional Education and Technology): http://www.admin.ch/bbt/KTI 

Association of Swiss Biotechnology Companies: http://www.vsbu.ch 

Unitectra Ltd., biotechnology transfer agency: http://www.unitectra.ch 

Location Switzerland: http://www.locationswitzerland.ch 

Swiss Embassy, Ottawa: http://www.eda.admin.ch/canada 

Life Sciences Cluster Organizations
(The Zurich Network/ZurichMedNet): http://www.zurichmednet.org 

BioValley, Basel: http://www.biovalley.com 

BioAlps, Geneva: http://www.bioalps.com 

OSEC Business Network (trade promotion/exhibitions): http://www.osec.ch 

Swiss Technology Institutes: http://www.ethz.ch (Zurich): http://www.epfl.ch (Lausanne)

For detailed market reports about this sector, please visit http://www.infoexport.gc.ca