The life science sector is going from strength to strength in Europe. Currently activity is concentrated in a few leading clusters though there is an increasing number of emerging clusters as the sector expands.
Strong fundamentals together with competitive cost can make Spain an appropriate location for business expansion, not only to establish European operations but also as a launching pad for the Latin American market thanks to its cultural and economic relations.
Spain has the potential to develop as a fast-growing hub due to its concentration of skilled talent, research institutions and knowledge-based industry, the government’s support policies for innovation and the quality of its infrastructure with a solid scientific and healthcare system. With an extensive network of 800 public and private hospitals, almost 80 science and technology parks, research centers, technology institutes and universities, Spain offers a favourable ecosystem for research and innovation.
The country ranks 12th in the world and fifth in Europe in terms of scientific production and collaborates in nearly 20% of international clinical trials according to ICEX Trade and Investment, a publicly-owned business-oriented entity of the Ministry of Industry Trade and Tourism.
It also has a good standing in the EU pharma and biotechnology industry with 425 pharma companies established in Spain, employing over 40,000 people. Four thousand companies are involved in biotech activities and more than 862 strictly biotech companies compared with just 50 companies two decades ago.
As a result, Spain has seen a surge of biotechnology investment over the past decade, breaking records with over €180 million private investment in 2021, 20% more than in 2020, according to the Spanish Bioindustry Association.
The biotechnology industry is growing hand in hand with the pharmaceutical industry. The latter is set to keep developing as the Strategic Plan for the Pharmaceutical Industry 2023-2025, one of the government’s major commitments, includes objectives for the sector of a global investment of more than €8 billion for the next three years.
Investment is set to foster innovation and expand the pharma production capacity. Novartis, for example, has announced it will invest €77.4 million by 2023 to build its sixth production plant in Spain and expand two others.
Public-private collaboration is helping to create a network effect that pulls life sciences companies. A good example is Biocat, a public-private organisation supported by local and regional governments and key public and private players which aim is to promote the Catalan life sciences and healthcare ecosystem, known as the BioRegion. It is made up of more than 1,300 companies and 91 research entities and represents 8.7% of gross domestic product and 8% of employment in Catalonia. In the last three years, the number of international investors who have opted for start-ups in the region has almost doubled.
Madrid, the largest recipient of foreign direct investment in Spain with 70% of the total, is also well positioned to pull in life sciences companies.
The US biotech company Moderna has chosen Madrid to set up its first quality testing laboratory for mRNA vaccines outside the US. This is part of the €500 million investment plan that the company announced last year for the country.
New real estate projects are being developed to accommodate life science companies like the Madrid Science Innovation District MASID, a new business campus with more than 60,000 square metres and a total investment of more than €200,000 million. This is the first private Spanish project whose aim is to gather companies linked to biotechnology and the scientific world.
Dutch-based Kadans Science Partners, the life science real estate business acquired by AXA IM Alts in 2020, is also set to invest around €35 million to transform the old Clesa factory in Madrid into a science centre with over 10,000 square metres. This would be the first investment in the country for the €1.9 billion AXA European Life Science Strategy fund, which was launched in 2021.
The life science sector is whetting the appetite of investors in view of the growing demand. In January Capreon, the Noé Group’s real estate investment arm, announced a €30 million life sciences investment through three buildings in Madrid totalling 10,0000 square metres.
The sector will need square metres of offices and laboratories as it grows and the amount of investable stock is expected to grow with it. Opportunities await.