Swedish life science industry on an upswing

The recent growth of the country’s life science industry is for example demonstrated in a new report by the Swedish Agency for Growth Policy Analysis and the fast growth of SwedenBIO, the national non-profit association for the life science industry in Sweden.

SwedenBIO has today 250 member companies and since the year end the association has grown by almost one member per week. This reflect that the industry as a whole is growing, states SwedenBIO, and refers to for example a recent report by the Swedish Agency for Growth Policy Analysis.

Increase and decrease

The report addresses two issues: How has the Swedish life science industry evolved in recent years and what are the prerequisites for innovation-driven growth among Swedish life science companies? And it shows for example that between 2014-2016 the life science companies’ net turnover increased by 27%, exports by 15% and the number of employees by 1.7%.

The most important reason for the increased net turnover is that the 22 companies defined in the report as “large” increased their collected net turnover between 2014-2016 with 33.5%.

“Among other things this was an effect of a favorable state of the market and an increased demand for new emerging markets, like China,” commented Carl Wadell, analysts at the Swedish Agency for Growth Policy Analysis to the magazine Läkemedelsmarknaden.

However, viewed over time, Swedish life science (*)  has lost production and export shares compared to other countries. A possible turning point, states the report, is that several companies have announced investments in advanced manufacturing facilities in Sweden, like AstraZeneca’s investment in Södertälje and GE Healthcare’s investment in Uppsala.

During the years 2014–16, the number of small and medium-size companies increased by 12% while the number of large companies remained unchanged. The number of employees in small and medium-size companies increased by 8.4% whiles the number of employees in large companies decreased by 2.2% over the period.

Prerequisites for innovation-driven growth

Every year a large number of new life science companies are registered in Sweden. There is also a trend that global life science companies and digital giants are opening up their innovation processes and are looking for companies to acquire, says the report. Given this development it might be warranted to investigate the growth effects of governmental investments in life science more closely, it states.

The number of clinical trials of pharmaceuticals increased slightly between 2014 and 2016 but viewed over a longer period, the number of trials has decreased in Sweden while they increased in for example Denmark. This was also recently highlighted in this report.

The Growth report also shows how the governmental venture capital funds have come to invest increasingly in later phases. Here, there is a risk that governmental venture capital does not address market failures that create funding gaps in early phases. An international outlook shows that other countries are working to improve access to venture capital for life science companies in early phases.

A crucial interaction

Today, SwedenBIO’s member companies covers the majority of the business segments within life sciences, from self-employed companies within biotech and medtech to global life science giants and clinical trial companies, and from IP experts and law firms to science parks and funding agencies. The most recent addition to the association was SHL Group.

“We are a global medtech company with strong Swedish roots. Collaborations with the Swedish pharmaceutical industry has contributed to a foundation for our growth. It is crucial for our future development in Sweden to continue to identify local, innovative collaborations but also competence provision, how well we are able to attract the best engineers. Through our membership in SwedenBIO we hope to increase our visibility and at the same time support SwedenBIO’s goal to strengthen the life science sector in Sweden,” says Magnus Fastmarken, Global Director Marketing Medical at SHL Group.

VC2VC

And SwedenBIO says it aims to further strengthen this interaction between different players, both small and large, which they believe is crucial for the growth of the industry as a whole.

“We know B2B. We are working with this, both operatively by offering a platform for building business networks and collaborations, but also by spreading knowledge about the industry and giving it a strong voice. Now we are also working on something that we call VC2VC, a way to get international capital interested in Swedish life sciences and in particular, in our member companies,” says Jonas Ekstrand, Director General of SwedenBIO.

(*) The pharmaceuticals industry has without doubt lost ground but probably also the medical devices industry states the “Growth in Sweden’s life science industry 2014-16”

This article originates from Nordic Life Science.