Although the global biotech sector is currently struggling with equity and debt financing, Swiss biotech is on the up. 2023 saw the Swiss biotech sector hit record revenues of CHF 7.3 billion (EUR 7.8 billion) with capital investments surpassing CHF 2 billion. While funding inflows still did not reach the levels seen during the extraordinary COVID-19 period, it did mark a significant 50 percent increase from 2022. Switzerland continues to top the Global Innovation Index and leads the world in biotech patents, but what is behind this momentum and how can it be maintained?
Talent, Expertise & Infrastructure
Europe boasts several biotech hotspots, from the Oxford-Cambridge-London ‘Golden Triangle’ in the UK to Belgium’s ‘Pharma Valley,’ and the ‘Medicon Valley’ straddling Sweden and Denmark. Switzerland more than holds its own against these countries, although the reasons why biotech companies are springing up in, or relocating to, the country have evolved over the years. “Switzerland’s attractiveness as a biotech hub used to be based on favourable economic conditions like competitive tax rates and flexible labour markets,” explains Christof Kloepper, the CEO of investment promotion agency Basel Area Business & Innovation. “While these still exist and remain important, companies are now looking for more. They want a robust ecosystem that fosters collaboration and growth. Today’s entrepreneurs are looking to be part of a community where they are not isolated but instead surrounded by a network of talent and research institutions.”
The concept of a biotech “ecosystem,” while somewhat overused, does seem to be a genuine draw for start-ups in Switzerland, with the country perhaps unmatched in Europe on this front. “With two of the world’s largest pharma companies based in Basel, alongside others in places like Lac Léman, Zug, and Zurich, we have a tremendous concentration of expertise,” says Lars Nieba, CEO of EngImmune, a spin-off from ETH Zurich working on T-cell therapies for cancer.
Not only do biotech leaders themselves emerge from these institutions, but existing companies can lean on the expertise of those working in academia and medical practice. Kari Sarvanto, CEO & founder of Cancer Research and Biotechnology AG (CRAB), a preclinical oncology company focused on non-toxic cancer treatments, adds that “CRAB has been fortunate to collaborate with leading specialists in toxicology, microbiology, and regulatory sciences here in Switzerland. Their contributions have been pivotal in moving our work forward. Many of these experts have supported us pro bono, providing critical guidance on areas beyond oncology, including drug safety and regulatory pathways.”
Dominik Escher, managing partner of venture capital fund Pureos Bioventures also sees a strong link between Swiss physicians and the country’s network of biomedical start-ups. “Companies in Zurich often have strong ties to clinicians at the University Hospital, which helps expedite patient recruitment and clinical trials,” he notes. Despite an overall drop in clinical trials from major industry sponsors in Switzerland, Escher perceives a true willingness from Swiss healthcare professionals to engage in biotech-sponsored clinical research. “While US based clinicians may be motivated by financial incentives, the personal and emotional connection that clinicians here have to their patients can result in more enthusiastic participation in clinical trials.”
Access to talent is another key selling point. “Switzerland is home to top-tier universities like ETH Zurich, EPFL, the University of Zurich, and the Universities of Basel and Bern, which provides access to an incredible talent pool,” says Nieba. ETH Zurich, for example, ranks sixth in the QS World University Rankings for Engineering & Technology, behind only MIT, Stanford, Oxford, Cambridge, and UC Berkeley.
Regulatory Support
New initiatives within Switzerland’s regulatory body for medicines, Swissmedic – profiled extensively elsewhere in this report – also play an important role in bolstering the country’s biotech sector. Swiss Biotech’s Altorfer highlights three key updates in this regard:
“Firstly, recognizing that regulatory bodies have historically been slow to adapt to innovations like cell and gene therapies, Swissmedic has established a dedicated division for Advanced Therapy Medicinal Products (ATMPs). They realized that they needed to catch up with the rapid advancements in these areas and have proactively worked to build the capacity and expertise required for these new approaches.
“Secondly, Swissmedic has also opened an Innovation Office aimed at being closer to research and innovation. They actively engage with innovation hubs, providing mentorship and gaining a firsthand understanding of emerging developments from both academia and industry. This close interaction allows Swiss startups and SMEs to collaborate with regulators early in the process, shaping their products in ways that align with regulatory expectations. By the time these products reach the point of needing approval, the groundwork has been laid, making the approval process smoother.
“Thirdly, perhaps the most notable development is Swissmedic’s role in establishing the Access Consortium, an alliance with the UK, Canada, Australia, and Singapore. This partnership expands access to a combined market of about 150 million people. Five years ago, Swissmedic mainly catered to companies looking to access the Swiss market, which is relatively small. Now, through this consortium, companies can target a much larger market, making the Swissmedic pathway far more attractive.”
“A massive benefit of being part of this vibrant life science hub is access to talent,” agrees David Veitch, CEO of Basilea. “Thanks to the presence of all types of companies, from big pharma to startups, there is a strong and diverse talent pool. As we continue to grow at Basilea, particularly with our pipeline expanding, we need more people in R&D, manufacturing, and other technical areas.” One of the few profitable companies in the notoriously challenging antifungal and antibacterial space, Basilea – a 170-person operation based out of Basel – recently secured a USD 268 million contract with the US government agency BARDA. Under the terms of the deal, BARDA will fund around 60 percent of Basilea’s future development costs.
For its part, Blueprint Medicines, a US headquartered biotech in the allergy/inflammation and haematology/oncology space which generated USD 250 million in revenues last year, has chosen to base its international operations out of Switzerland. “This decision was partly driven by local access to highly specialised talent and a competitive market that challenges us to remain an attractive, purpose-driven workplace,” says the company’s SVP & Head of International Georg Pirmin Meyer.
Not only do the country’s higher education institutions consistently churn out graduates with the scientific and business chops to succeed in biotech, but the country is also an appealing destination for early- and mid-career professionals looking to relocate. “Switzerland’s appeal as a destination for talent is bolstered by factors beyond the industry’s control, like over a century of political stability, a robust legal framework, and a reliable government,” lays out Michael Altorfer of industry association Swiss Biotech. “For talented professionals, knowing they can provide their families with a high-quality education, efficient public transport, and a safe living environment are significant factors that make Switzerland an attractive place to live and work.”
Altorfer continues, “Looking at our talent pool, it’s notable that in R&D, 70 percent of professionals are non-Swiss, and 78 percent of founders of successful “unicorn” companies are also from abroad. This highlights how international talent finds Switzerland to be a stable environment where they can innovate and take risks without the added concerns of instability or safety.”
Then there are the cohort of retired (or semi-retired) alumni from Switzerland’s leading pharma companies, Roche and Novartis. These well-seasoned professionals are often tapped up to serve on the executive board of Swiss biotechs, helping make them even more appealing to potential investors.
Beyond individuals, the physical infrastructure available to Swiss biotech start-ups is also crucial. “Switzerland has invested heavily in infrastructure, which provide valuable resources and support the growth of smaller biotech companies,” says EngImmune’s Nieba. Kloepper adds that the Basel region provides options for every type of company, even one-man-band university spin-offs making their first steps toward the commercial space. “The Basel Area also offers excellent infrastructure. For instance, its tech parks allow companies to start small, perhaps by renting a single lab bench, and gradually expanding as they grow. Some, like Idorsia, have even reached the point where they’ve built their own facilities. This flexibility, combined with access to critical resources, makes this region an ideal place for biotech startups to flourish.”
Some Big Pharmas, such as Boehringer Ingelheim, are already taking note and snapping up the cream of the crop in Swiss biotech. “Boehringer Ingelheim Switzerland has expanded into the biotech sector with the acquisition of three companies specializing in oncology therapies: NBE and T3 in the Basel area, and AMAL in Geneva,” explains Country Head Daniel Weber, who lays out the company’s distinct approach to working with these acquisitions. “Rather than fully integrating them, we strive to preserve their innovative and entrepreneurial drive. By minimizing interference, we allow these companies to maintain their agility and “start-up” mindset to progress swiftly, while offering support in areas like Finance and HR to reduce their administrative load.”
Finding the Funds
Whether a biotech lives or dies, however, is heavily influenced by its ability to attain funding. Swiss companies have tended to look abroad – especially to the US – for VC funding and eventually public listing, although the picture is slowly shifting.
“Swiss companies continue to favour NASDAQ as the primary exit route, as it remains the gold standard in the sector,” explains Pureos Bioventures’ Escher, a man with first-hand experience of looking internationally for biotech financing having sold his firm ESBATech to Alcon (later acquired by Novartis) in 2009.
He does see some nuance in the landscape though. “Some Swiss biotech companies have successfully pursued dual listings, and there have been a few instances where companies have chosen to list exclusively on the Swiss Stock Exchange. For the Swiss Stock Exchange to become a more attractive option, it will need to reach critical mass, with a well-performing index and a few high-profile success stories that demonstrate its potential.”
Regardless of the funding route chosen by Swiss biotechs – and it should be remembered that a full 96 percent of the sector remains privately financed – it seems that a challenging last few years has shaped how these companies approach the market for the better.
“Over the past two and a half years, securing VC funding felt like navigating a barren landscape. Many investors, especially in regenerative medicine, were focused on supporting their existing portfolios rather than making new investments,” admits Deana Mohr-Haralampieva, the CEO & co-Founder of MUVON Therapeutics, which focuses on diseases related to skeletal muscle damage.
“That said, the landscape has shifted recently, and our clinical progress has made us a more attractive and less risky proposition. Preclinical assets still face challenges in securing investment, but with our advancements and the strong network we’ve built over the years, we are now in a much better position. We’re no longer starting from scratch, and our experienced team and well-established connections have certainly made us more appealing to investors.” Mohr-Haralampieva is now looking to raise EUR 65 million to support upcoming pivotal trials and the company’s commercialisation efforts.
EngImmune’s Nieba, currently busy preparing for a Series A fundraising round, tells a similar story. “The decline in risk capital over the past two to three years has forced us to sharpen our focus. It is no longer enough to just have compelling science; we have had to think carefully about what truly differentiates us in the market. Thanks to our investors [EngImmune is backed by the Danish firm Novo Holdings and Pureos Bioventures – Ed.], we have prioritised understanding the market potential and the patient populations we are targeting so we can present a clear and complete story to future investors.”
Professionalisation is the watchword for Swiss Biotech’s Altorfer, who has seen a significant change in companies’ successful fundraising strategies. “There is a clear shift towards fewer and larger fundraising rounds and a preference for professionally managed companies,” he notes. “Investors now expect companies to establish a professional board, bring in experienced management like part-time CFOs with prior biotech experience, and present a strong advisory board. The traditional model of scientists managing their spin-offs is no longer sufficient to secure financing; investors demand a level of professionalism and proven business acumen before committing their support.”
The European Context & Challenges Ahead
In an uncertain world, looking too far ahead is never advisable. While Swiss biotech has performed well in recent years and clearly has the talent, expertise, infrastructure, regulatory framework, and financing in place to thrive, its future success is by no means guaranteed. This is especially true when the country is considered in its context within Europe – a continent that is rapidly losing ground in terms of innovation to the US and China.
A greater focus on translating science into application is one key area. “While we in Europe excel scientifically, often leading the US in research publications, we lag in translating that science into commercial products,” points out EngImmune’s Nieba. “The US dominates in patent generation and venture funding, and that is where Europe, including Switzerland, needs to step up.”
“The main hurdles to Europe translating its research and scientific excellence into application seem to be financial rather than cultural,” adds Susan Gasser, director of the ISREC Foundation at the AGORA Cancer Research Center in Lausanne. “The mindset around innovation is shifting, and Europe’s talent pool and university systems are excellent. Sustained funding and constant investment remain critical factors to ensure that this progress continues. The ecosystem is being built, but to fully realize its potential, the availability of capital must catch up with the innovation emerging from research institutions.”
Former Novartis cell and gene lead Emanuele Ostuni, now heading up radioligand therapy focused biotech ARTBIO agrees that Europe boasts excellent science but lacks some of the elements that he saw while working in Boston. “A successful biotech ecosystem hinges on several factors,” he says. “First, access to risk capital; second, an entrepreneurial culture that thrives in small, high-risk ventures rather than large corporate environments; and third, an academic ecosystem that not only produces groundbreaking research but also fosters the mindset that fundamental discoveries can be applied in real-world contexts. While there are pockets of excellence in Europe, the region still has significant room for improvement in these three areas.”
Nieba also calls for more collaboration between Europe’s biotech hubs. “Within Europe, we sometimes compete with each other, rather than thinking collectively about building global hubs for biotech and other industries,” he states. “This fragmentation prevents us from reaching the critical mass needed for long-term success. Switzerland has made strides, and we see strong hubs like Paris, Copenhagen, and the UK’s Cambridge-Oxford-London triangle. Still, there is room to think more broadly about collaboration across Europe.”
Despite these potential bumps in the road ahead, Altorfer remains hugely positive about the future trajectory of Swiss biotech. “As it stands today, I am very optimistic,” he concludes. “I see a significant growth in the industry, the emergence of new companies, a strong influx of capital, continuously high levels of patent applications, and an expansion of interest into new areas such as health tech, AI-driven solutions, and companion diagnostics.”
