The approval of Bimervax, the booster COVID vaccine from Laboratorios Hipra, has been one of the most celebrated news this year in business and biotechnology networks in Spain. For sure a well-deserved recognition of a great job. And since the first vaccines against COVID19 made Biotechnology visible to all, we all react with joy to any progress related with COVID.
But it is not the only good news that Biotechnology has brought to us in recent months. The ASEBIO report, a yearly classic in business information presented last June 20th, highlights other interesting ones. Before going through them, let’s try to set the perimeter of Biotechnology.
When talking about Biotechnology we refer to industries that put living matter, properly managed, to work for us. If we take this definition in a very broad sense, we could include the manufacture of beer or bread, or perhaps even agriculture. But let’s not go that far. In practice, we call biotech the industries emerged since we learned to directly affect genetic material. Specifically, Genentech is often considered the first biotech company because in 1976 it first used recombinant DNA to produce somatostatin, a human protein, in bacteria.
Recombinant DNA entails introducing a foreign gene into DNA to engineer genetic material. This innovation empowered the cultivation of cells—such as bacteria—in laboratories to produce specific proteins, opening pathways for therapeutic proteins like enzymes, antibodies, and growth factors. Over the past five decades, scientists’ techniques for manipulating living matter advanced rapidly. Beyond recombinant DNA, they silenced genes with synthetic interference RNA and finally edited DNA sequences very precisely using CRISPR technology. The researchers Charpentier and Doudna deserved the Nobel Prize in 2020 for developing this gene editing technology. It is fair to remember that this would not have been possible without a basic science discovery own to the Spanish researcher Francis Mojica. And finally came messenger RNA as a simple method to instruct a cell to make the proteins we want without having to reach its nucleus to manipulate the DNA – as most of us learned with the vaccionation experience in 2020.
Each new tool in biosciences (of which these were just a few simplified highlights) opened up possibilities for industrial application, giving rise to a fascinating landscape full of uncertainty and opportunities, which is the biotechnology sector.
Here and now
According to the report by the business association ASEBIO, last year biotechnology-based companies in Spain made a turnover of more than 13,000 million euros. The growth was close to 8%. They launched 109 new products and services on the market. The sector employs 118,000 people, and invested 1,038 million in R&D, of which 64% is financed with its own funds.
The science behind this technology in the country is responsible for 2.6% of world scientific production. Traditionally, the Spanish scientific productivity is much better than our industrial productivity. We can say that we are better at creating knowledge than converting it into wealth. This problem is still there, although some steps are being taken in the right direction, as shown by both the ASEBIO data and the recent European study of innovative regions, summarized here by Xavier Ferrás.
62 new biotech companies were created last year in Spain, 19 more than in 2021. The average for the last decade is 48 new companies per year. Why are so many companies created? Innovation seems to be led by an ecosystem of scientific entrepreneurs rather than by the R&D departments of large and established companies(1).
This is better understood if we think about some of the particularities of the science behind this technology. This is still emerging knowledge, in the hands of specialized research groups, many in the academic world, contributing discoveries in a not necessarily coordinated way. There is no universal paradigm telling us in which direction the next discoveries should go.There is no way to anticipate what big corporations are going to demand. When those research groups see the opportunity to apply and monetize their discoveries, many assume the risk to become entrepreneurs. This results in a fragmented and highly dynamic fabric of small knowledge based companies, full of opportunities and also challenges.
Challenges
These scientific ideas become companies usually through the creation of spinoffs – knowledge based companies, founded by researchers, which can count on the participation of the University or the assistance of organizations for the transfer of research results. When the University participates in the company, the royalties the company must pay for the knowledge created within the institution are negotiated. These are usually between 3 and 10% of the sales generated during the patent period. Some bioentrepreneurs consider these percentages excessive, raising a debate on how universities should be rewarded for the creation of knowledge and what their role should be in commercializing it.
Beyond institutional support, in order to function the new company needs to attract capital. This usually comes from venture capital funds, or -increasingly- from corporations interested in forming joint ventures and perhaps eventually acquiring the startup. Venture capital funds are involved in the management of the company, sometimes offering mentoring and support, and are extremely demanding in their selection. The entrepreneur needs to develop communication skills for this competition for funds. Sometimes this effort is taken to almost painful levels. In the last Food for Tech congress held in May in Bilbao, a session of “Get in the Ring” was held and brilliant researchers had to participate in a boxing ring staging.
Winning that fight is not enough. Given the difficulty in finding funds, it is natural to celebrate achievements, but we often misfocus and tend to measure the success of a start-up in terms of capital raised in investment rounds, which in the end only shows expectations created to investors. We should celebrate more when the turnover comes, as that is what will keep the company alive.
And this is another challenge, especially in healthcare segment. In the pharmaceutical industry, the process of taking a new drug from discovery to commercialization can take 15 years. It’s a long time, longer than the time the venture investor usually remains involved. In search of solutions to generate billing to survive this journey, companies develop alliances or sell to third parties a service related to the technique in which they are experts. But to make this business model viable, it is essential to clearly identify which real problem of potential clients our servie solves. Selling highly specialized technical excellence is not enough. Developing and communicating that problem-oriented vision is another of the business challenges of science-based CEOs.
Opportunities
The opportunities are not only in the biopharmaceutical and diagnostic field, but also and increasingly in the agri-food and circular economy. Of the 898 purely biotechnological companies associated with ASEBIO, 50% are oriented to the health sector and 39% to the agri-food sector. Of all the companies that use biotechnology in some part of their processes, 80% are agri-food.
The climate emergency and the sustainable development objectives force us to seek efficiency for food production. This will only be possible, in addition to changing some habits, adopting biotechnological tools. In this context, innovations as laboratory-grown meat emerge, a sustainable food alternative free of animal suffering. At the time of writing this article, this technology already has licenses in the US and Asia, and a Spanish company is preparing to enter that market. Animal cell culture is only possible cost-effectively and efficiently if we have readily available and cheap cell culture components. Agrenvec aims to solve that problem by expressing growth factors in treated plants using mRNA. They have used this technology before to obtain growth factors for research and cosmetics.
In the Healthcare sector, let’s highlight the opportunities related to advanced therapies. These therapies, instead of chemical active ingredients, use genes, cells or tissues to correct diseases that previously had no treatment. The European Medicines Agency has recently approved 18 such drugs, with a similar or accelerated approval rate anticipated. Spain ranks fifth in advanced therapies research, housing 34 biotech companies working across various phases and applications of these technologies. Notably, nine companies possess facilities capable of manufacturing materials or licensing gene, cell, or tissue therapy technologies. CAR-T cell modification therapy, with promising applications in extended cancer types, captivates companies like Lentistem and established lentivirus manufacturer Vive Biotech.
Looking ahead
Looking into the future, we are witnessing the first steps of a hugely transformative technological revolution.
This great potential deserves institutional support. Some initiatives to highlight in this respect are the new law on startups, expected to facilitate some administrative aspects for knowledge-based companies, and the use of Next Generation funds for the development of advanced therapies (PERTE Salud de Vanguardia).
Like any other technological change, it also creates concerns. The least realistic of the concerns that we sometimes see in public opinion is probably the obsession with an alleged danger inherent to genetically modified organisms. We have sufficiently strict sanitary and environmental control measures to know that nothing reaches our body without proving its safety. This is no different when the species has undergone artificial genetic modification, and even less so if it has undergone precision gene editing. More relevant is, in my opinion, the need for a global bioethical consensus related to the human genome. And furthermore, we should be work to avoid the inequality that unfortunately often accompanies innovation. It will be of little use to have new therapies capable of extending life, reducing the symptoms of aging or improving our quality of life, if they are only accessible to an elite within the first world.
These debates should not be reserved for a scientific elite. Society must have a say on the future it wants, and this is only possible with wider culture and information on science and technology.
In any case, Biotechnology has an enormous potential to help us create a more sustainable economy capable of providing food and health for all. A fascinating journey lies ahead.
(1) https://www.nature.com/articles/d41573-023-00102-z?es_id=6ae0edb754