The country’s industrial heritage allied with strong government incentives to help it play a leading role in the race to develop Covid vaccines, say Business Development Manager Brecht Guldemont and Managing Director Christophe Tans, of Intertrust Group
Belgium, whose population numbers just 11.5 million, punches well above its weight in the biotech and pharmaceutical industries. In 2020 Belgian companies accounted for 24% of the stock market value of all public biotech companies in Europe.
Belgian-based UCB, Solvay, Galapagos NV, Biocartis, Argenx, Celyad and MDxHealth are among Europe’s leading pharma companies. UCB, Solvay and Galapagos NV are listed on the Bel20 stock market index of the country’s largest companies.
At the heart of the Belgian biotech success story are synergies between academia, Big Pharma, SMEs and the government.
The country is now home to several global biotech giants, including UCB, with its roots in Wallonia, which has transformed itself from a chemical company into a pure bio-pharma enterprise now worth €16.9bn, and Flanders-based Janssen Pharmaceutica, a Johnson & Johnson company that has become a template for the Flemish economy.
Companies such as Novadip, Flamingo Therapeutics and PharmaFluidics are among those involved in advanced research that have recently successfully secured foreign investment.
With universities providing the research foundation and expert human capital, the government weighs in with tax incentives. These include the R&D Investment Deduction, the R&D Payroll Tax Exemption and the Innovation Income Deduction, which applies an 85% tax deduction to “self-developed intellectual property (IP) rights”.
These exemptions represent a generous constellation of tax allowances that are combined with a regulatory framework that fosters efficiency and safety. The Walloon government now has similar incentives for companies undertaking substantive research and development as it increasingly seeks to replicate Flanders’ biotech success.
Contributions from the private sector complement public capital. Private equity and venture capital funds often have a strong appetite for life sciences and biotech. This capital market environment provides entrepreneurs and SMEs with flexible and accessible options for raising capital.
For example, in May this year biotech-focused venture capital firm Droia Ventures raised €220m for a new fund targeting investments in developing therapeutics to fight genetic diseases.
And in October this year, Belgium-based start-up Rejuvenate Biomed raised €15.7m in a Series B funding round led by venture capital firm Vesalius Biocapital Partners; the funding will be used to develop therapies to promote healthy ageing.
The role of big pharma in incubating biotech start-ups is also significant. For example, Janssen Pharmaceutica’s parent company Johnson & Johnson established its first European-based science incubator and accelerator lab – JLABS – in Belgium in 2018.
The story of Covid-19 vaccine production illustrates how success breeds success in Belgium’s biotech sector: the Pfizer vaccine was developed by BioNTech in Germany, but the company used its Puurs plant in Belgium for crucial manufacturing work, and Puurs is now the main production facility for the jab.
In July this year, the European Investment Bank (EIB) signed a €30m loan agreement with Charleroi-based Univercells to build a production facility for Covid vaccines.
Investors seeking growth and high returns will find that Belgium’s robust government support for the biotech sector, allied with its abundance of specialised partners, university knowhow and key position in Europe’s transport network, all combine to create a uniquely attractive opportunity.
Intertrust Group can add value for our clients through our knowledge and expertise of local networks and specific governmental, regulatory and corporate aspects.
Our Brussels office brings together an unrivalled team of professionals in fund administration, providing an invaluable point of access for private capital seeking exposure to the Belgian market.
Intertrust Group has connections across Europe and beyond that enhance service solutions by relating to all major jurisdictions and language profiles. For capital seeking to invest in Belgium, Intertrust Group has the essential multilingual skills to enhance our domain expertise.