Life Sciences Outlook 2012 Dutch biotech companies ... - NautaDutilh

However, the government could become more
effective by making a longer-term commitment to
the industry, for instance through the creation of an
‘NIB’. The entire sector has a long-term investment
horizon; short-term policies can easily lead to
mismatches.
• Capital scarcity for VCs. In the Netherlands
there is a relatively large base of venture capital
investors in both the seed and growth stages.
Currently, however, they face a very unfavourable
climate for raising new capital. This may result
in a consolidation or even cause some of them
to retreat from the market, potentially posing a
significant threat to the country’s biotech sector.
Government co-investments in the seed and
growth phases and participation by family offices
and charities can only go so far to compensate for
this reduction of available funds.
• Closely-knit ecosystem biotechs, VCs and Big
Pharma. VCs are perceived to be an important
driving force behind the forging of ever-closer
relationships between Dutch biotechs and Big
Pharma; a true ecosystem is developing.
- At an increasingly early stage of the life cycle of
biotechs, they are groomed for a partnership
with or acquisition by Big Pharma. According
to 60% of the respondents to our survey this
is the predominant strategic goal of biotech
companies. Given the increasing costs and
complexity involved in the development of new
drugs, most industry professionals no longer
consider it a realistic option to do this as an
independent company funded only by VC
investors.
- A contributing factor is that IPOs are not
considered to be a realistic exit route for
most biotech companies either now or in the
foreseeable future. This is due mainly to the
market climate, but also to a lack of specialized
institutional investors.
- Big Pharma is increasingly outsourcing R&D
activities (usually via a corporate VC arm) to
early-stage biotech companies, in an attempt
to boost overall productivity in this area.
• The Netherlands as ‘feeder’ nation? The current
trend is for biotech companies to be taken over by
or otherwise become part of Big Pharma, often at
or near the stage of the phase II clinical trials. The
Netherlands may well become a breeding ground
for valuable new medicines, medical devices and
technology which at some point in the biotech
company’s life cycle are passed on to Big Pharma.
Subsequently, the biotech’s management and
researchers become available for new start-ups.
• Creation of Dutch champions? Particularly in view
of the funding situation, it is considered unlikely
that a large, independent and profitable biotech
company will develop in the Netherlands. In the
current scenario, the creation of a new Dutch
champion such as Crucell is likely to be the
exception than the rule.
Life Sciences Outlook 2012 Dutch biotech companies: from start-up to exit
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