#TogetherAgainstCOVID19 - Swiss Biotech
#TogetherAgainstCOVID19 highlights voices from across the European biotech landscape. Read our interview with Swiss Biotech CEO, Michael Altorfer.
Could you please introduce Swiss Biotech?
The Swiss biotech industry represents one of the leading biotech ecosystems globally. Since more than 50 years, Switzerland has built up an external innovation pool that complements the R&D portfolio of the multinational pharma companies and represents one of the most innovative industry segments of Switzerland. Together, pharma and biotech companies generate about 40% of all Swiss exports.
The Swiss biotech companies attract about 1.0- 1-5 billion CHF VC capital each year and invested about 2 billion CHF in R&D projects in 2019. The Swiss biotech hub comprises about 1’000 companies out of which about one third conducts proprietary R&D projects. Together with CROs, CDMOs and specialized advisors, these companies have built up about 50’000 high quality jobs. Many multinational pharma and biotech companies and specialized Swiss manufacturers (such as Lonza or Bachem) have selected Switzerland as their home base for production sites and for their international headquarters. The strong biotech industrial sector benefits from the presence of world-leading universities and hospitals which provide a constant stream of innovative technology transfer and licensing opportunities.
Founded in 1998, the Swiss Biotech Association currently counts 277 member companies and represents the interests of the Swiss biotech industry. To support its members in a competitive market, the Swiss Biotech Association works to secure favorable framework conditions and facilitate access to talents, novel technologies and financial resources. To strengthen and promote the Swiss biotech industry, the Swiss Biotech Association collaborates with numerous partners and life science clusters globally under the brand Swiss Biotech.
The COVID-19 pandemic requires collaboration across many fields, especially in the field of biotechnology. How does Switzerland and its vibrant biotech ecosystem contribute to the European efforts?
Indeed, Switzerland belongs to the most active countries in the global response to the Covid- 19 pandemic. After the US and China, Switzerland is listed with the 3rd largest number of Covid-19 related R&D projects (> 20 therapeutics and vaccines).
Thereby, Switzerland uses all elements of its life science innovation power. The leading Swiss universities and university hospitals are equally involved as the Swiss biotech and pharma companies. Naturally, new approaches to develop Covid-19 specific therapeutics and vaccines are in the spotlight. But biotech companies as well as multinational pharma companies like Roche and Novartis have rapidly launched clinical trials in repurposing efforts to demonstrate that already marketed drugs could be useful in the treatment of Covid-19 patients. Roche has also been one of leading firms in the development and global distribution of test kits, both to test for the virus itself and for antibodies developed after the infection.
Swiss scientists have been among the first to produce virus clones and to provide such information to the global community to support Covid-19 related research and identify potential therapeutic targets. Last but not least, leading manufacturers also teamed up with biotech and pharma companies to support the R&D efforts on the logistics and manufacturing side. An area that is a key constraint as time is of essence and thus not only the discovery and development of novel therapeutics and vaccines is critical but also the global supply chain.
Many biotech companies across Europe have responded and show promising and highly innovative approaches in finding treatment against the virus. How did European-wide collaboration support these developments?
Indeed, it was remarkable to see that while the political collaboration was difficult as nations focused on their borders and national territories during the most pressing period of the crisis, the scientific international collaboration continued and actually intensified.
Switzerland benefits from a long tradition of international collaboration. As the country is so small and has very limited natural resources, science and knowledge based skills and industries have been essential for the well-being, competitiveness and international collaboration.
Also in this crisis, the international scientific network and good political relations helped Switzerland to not only play an important part in the response to the Covid-19 pandemic but to do so in collaboration with international partners that have been able to amplify and complement the Swiss response. As mentioned above, Switzerland has also played an important role in developing an early understanding of the virus, its replication and infection mechanism. Thanks to the open and international collaboration this knowledge was shared globally. Equally, when Swiss based companies engaged in Covid-19 R&D projects they could rapidly count on global partners to secure a global supply chain network that will be able to ensure a rapid delivery once a first vaccine or therapeutic will be approved. Furthermore, it was remarkable to see that during the pandemic the Swiss biotech companies could easily reach out to their partner network. The access to regulatory bodies internationally was smooth and in many instances accelerated. The big pharma companies proved equally open to collaborate or to share advice. Last but least, also the international collaborations through webinars and the multinational associations, such as EuropaBio and ICBA worked effectively and were never interrupted.
In biotech R&D activities, collaboration and joint efforts come naturally in order to achieve successful outcomes. The European national biotech associations are working together to connect and support these innovative organizations that will find a cure. Where would you see room for improvement in the European response?
Whereas the scientific and private sector collaborations continued to be effective and in many instances were even facilitated by the pandemic (it is easy to liaise via webinars and parties recognize the urgency and focus on the essential topics and needs), the political collaboration has rather been cumbersome. It was obvious that when the individual countries realized that the spread of the pandemic was inevitable, they immediately and exclusively focused on their borders, their people and their internal problems. Neighbors were cut off; logistical problems of others were clearly considered 2nd priority. Often it was not with the intention to harm anyone but it was evident that each country and in particular their politicians almost exclusively focused on their country only. International treaties, dependencies and needs were also of secondary importance.
The longer-term effects of the crisis on biotechnology in Europe will hit small-and medium sized companies and start-ups hardest. What necessary steps need to be taken to prevent this?
The biggest risk at this point in time is that the innovation power of the European biotech R&D companies is diminished. They all face significant delays in R&D projects of at least 6-12 months. Academic partners are “locked-down”, many CROs struggle to keep timelines or to provide services at full scale and most importantly the clinical trials are affected heavily. Naturally, this varies from region to region as the pandemic has not affected all countries equally and at the same time. But in general it has become very difficult to start new clinical trials as planned and the ongoing trials have been slowed down and in some cases had to be stopped altogether. At the same time, many biotech companies are facing a situation in which they have rather more work than before as they try to mitigate the effect of all the delays or as they seek to protect e.g. the patients already enrolled in the clinical trials.
Equally, they find it hard to cut their fixed costs even though all projects are delayed. Thus, they face a difficult dilemma as the liquidity reserves diminish and milestones are missed, they have to return to the investors asking for more financial resources while they are not able to demonstrate the progress.
The big risk in this situation is that they have to lay off highly talented people, cut their R&D spending and suppress innovative projects or they are forced to sell IP, licenses or even the company at poor financial conditions. All these measures, as logic and entrepreneurial they are, will ultimately weaken the innovation power of Europe. That is why it is essential that biotech companies are provided with access to emergency loans so that they can gain time to close the planned financing rounds and complete the delayed R&D projects. Equally, it is essential that additional support is given to public/private partnerships to foster innovation and to strengthen start-ups. Last but not least, it is important to establish an overview of all the Covid-19 R&D projects to assess which projects are the most promising and to ensure that those projects are not delayed due to lack of capital.
We fight #TogetherAgainstCOVID19 – what are the necessary steps that need to be addressed now and for the future?
As we fight the pandemic together it is essential to recognize that the response is multifactorial and follows many parallel objectives. Naturally, the development of effective, Covid-19 specific therapeutics and vaccines will ultimately be the tools that bring the broadest and most targeted relief. However, in the short term, the development of precise diagnostics and their global availability will be crucial to provide the essential information as to how the pandemic is spreading and easing, how immunity is being established and potentially lost and how the virus itself is evolving and altering the infection risk. Equally, the identification of drugs that are suitable for repurposing could provide rapid and valuable support in the treatment of Covid-19 patients in the short-term. It is however less conceivable that an investment in an R&D project that aims at repurposing clinical candidates will pay off. The attrition rate and the timelines of such projects may favor other priorities. As the pandemic is easing it will also become ever more obvious that there will not be sufficient patients to support all currently initiated R&D project.
In this situation it will be on one hand important to continue to monitor carefully all the active R&D projects in this field but we will also have to be careful to support those projects that will have the best chance to succeed and will likely have the strongest impact. As always, the assessment of this portfolio will not be an easy task as projects can fail at any development stage and yet there will not be sufficient financial resources to support all projects. As mentioned above, there will also be other constraints, such as the rapidly reducing number of Covid-19 patients in 3-6 months (assuming that there will not be a severe second wave of the pandemic) and other logistical constraints as we will not be able to provide for manufacturing capacity for dozens or hundreds of product candidates.
Dr. Michael Altorfer is the CEO of the Swiss Biotech Association. He has more than 20 years of experience in the life science industry comprising both big pharma and smaller biotech organizations. As a member of the Executive Committee he supported the build-up of Polyphor Ltd in Allschwil in many different roles (Head BD&L, CFO, COO and CEO). Michael started his career as a scientist in pharmaceutical research at Sandoz, Ciba-Geigy (Summit, NJ, USA), and Roche. From 1996 to 2001 he held program management and line management roles at the investment bank UBS Warburg.