LìfeSciencesHealth, a shining future?

Dr. Roland Lageveen

CEO IQ Corporation

Biotechnology in the Netherlands

The Dutch life sciences and health innovation cluster (LSH) builds upon a strong knowledge base

Strong national cluster: First rate academia, hundreds of SME’s, multinational med- & biotech and Pharma, all within a 120 mile radius

Focal points around:- Amsterdam/Leiden/Rotterdam/Utrecht- Groningen- Wageningen/Nijmegen - Eindhoven/Maastricht

World class:– Two Dutch clusters are in the global

Top 40 and the European Top 15 for biotech patent applications.

120 mile radius

Excellent biobanks and ‘real life’ datainfrastructure

Global players & very high

concentration of SMEs

• Impact publications number 4

• Publication productivity number 2

• Patent productivity number 1

…with excellent output levels 2,5% of world science output

www.worldmapper.org

Source: OECD, Biotechnology Statistics 2009

…and a good biotechnology patent productivity too…

patent productivity number 1

Health-related life sciences: an important sector in the Dutch economy

Drugs – 430 companies; EUR 12 bn revenues; 37,000 FTE

Diagnostics– 390 companies; EUR 2.7 bn revenues; 12,000 FTE

Biomedical Engineering and Devices – 75 companies; EUR 0.4 bn revenues; 2,200 employees

Other – 40 companies, EUR 0.8 bn revenues

Health-related life sciences: 935 companies – 150 highly innovative; EUR 15.9 bn output (3% of GDP); 54,600 FTE

Source: EIM study for EZ [2006], Voorstel LSG [2006]

5 of the top 10 European biotech deals are with Dutch companies, with a total value exceeding USD 2 billion

However….

…but a low performance on innovation & entrepreneurship and applications

1 Finland2 Finland3 Finland Finland4 Finland United Kingdom567 United Kingdom8 The Netherlands9 United Kingdom

10 The Netherlands The Netherlands111213 United Kingdom1415 United Kingdom161718 The Netherlands The Netherlands

Innovation drivers

Knowledgecreation

Innovation &Entrepreneurship

ApplicationsIntellectual

Property

Source: European Innovation Scoreboard 2006

Aggregate uptake of 13 innovative first-line products

(launched between January 2004 - June 2008)

0,00

0,04

0,08

0,12

0,16

0 1 2 3 4 5 6 7 8 9 10 11 12

Months after launch

Unit

volu

me p

er

capit

a

Belgium

Denmark

France

Germany

Netherlands

Switzerland

UK

After UK, the Netherlands has 2nd lowest market uptake of innovative medicines

Nyenrode Biotech Outlook: The performance of Dutch cluster is low but improving

Investments in PPPs are huge, but will decline

Source: PPP websites; Senternovem; Ministery of Economic Affairs

PPP programs – duration and total investment

Investment in time [EUR m] (committed 2003-2007)

1) Includes also non-health related investments

11100908 150706 141312

NGI 5001)

TI Pharma 240CTMM 400

90dpte

SCDD 18Cyttron 18Parelsnoer 67LifeLines 5

Program [EUR m]

Neuro-BSIK7BioMaDe23TREND28Arthrosite24Braingain

BMM

26Mol Im Heart 20

24NIMIC25TERM50

248263257

??

Committed

FES 2009

2007 2008 2009 2010 2011 2012 2013 2014 2015

Taken to the next level…

…momentum lost?

…or… 182

4234

110 0

The government recognizes life sciences as ‘topgebied’, next to food & flowers and chemicals

The government recognizes life sciences but their budgets ......

• Wbso higher• Tax lower

But: • No specific programs• No FES funding• No vision

The international environment is changing…..

15

The big Pharma challenge: R&D expenditure goes up, output in new medicines goes down

0

40

80

120

0

20

40

60

Source: PhRMA, FDA

R&D investments

R&

D in

vest

men

t [U

SD

bill

ion]

FDA approved new medicines

FD

A approved new

medicines [#]

R&D investments [USD billions] versus output [approved new medicines]

Development of a new drug has become more complex: safety & efficacy are the two main issues

Costs to develop one new drug have become approximately EUR 1 billion

November 2007: Schering-Plough buys Organon for USD 14.4 bn

November 2009:Schering-Plough and Merck merge, Merck (MSD in Europe) pays USD 41.1 bn

March 2009:Roche buys remaining 44% of shares in Genentech for USD 46.8 bn

January 2009:Wyeth merges with Pfizer, Pfizer pays USD 68 bn

September 2009:Abbott buys Solvay Pharmaceuticals from Solvay paying USD 6.6 bn

Reducing costs and filling pipelines are two main drivers for consolidation in big Pharma

Examples of mergers and acquisitions in big Pharma

...with a major impact on the Netherlands

Organon Solvay Crucell

At the same time big Pharma tries to fill its pipelines by increasing external R&D activities

Company Turnover R&D % of turnover

Highlights of R&D strategy

GSK (2009) GBP 28.4 bn 4.1 bn 14%Increase the percentage of external R&D from 33% to 50%

Merck (MSD, 2007) USD 26.8 bn 4.9 bn 18%

Target to realize 25% of early pipeline via ‘External Basic Research program’ in the next 3-5 years

AstraZeneca (2008) USD 31.6 bn 5.2 bn 16%

Move from ‘research’ to ‘search’: RoI of dollars spent on external R&D is 3 times higher than internally spent

Source: annual reports and websites GSK, Merck, and AstraZeneca, and Morgan Stanley report on AZ

Examples from three major Pharma companies with highlights of their R&D strategy

The changing environment holds opportunities for the

Netherlands….

Societal, technological and stakeholder trends holds opportunities for the Netherlands

Dutch business environment and government innovation policy

Societal trends1

15%

2010

20%

2020

24%

2030

26%

2040

% population >65 years in the Netherlands

Technological trends

Bio-artificial kidney

Stakeholder trends3

4

2

Marketing/ sales

Production company

Technology provider

Clinical research company

• Ageing• Unhealthy lifestyle• Demand for high quality of life

Increased burden on the healthcare system

New technologies promise:• Early diagnosis• Targeted delivery of drugs• Personalized medicine

• Specialization• Networks• Open innovation

• Promising business environment• Life sciences anchored on short term in government innovation policy• Pitfall is lack of continuity in policy

The Netherlands has a good start position to turn into an international breeding ground for new businesses

Increasing demand for innovations

Increasing specialization

Strong Dutch knowledge base

Highly educated people

Strong innovation infrastructure

Growing industry

Internationally competitive breeding ground for new business in life sciences and health

+

+

+

+

=

+

OPPORTUNITY TO BECOME

How can we grab the opportunities ?

A clear challenge for the Dutch sector: big and small, clinical and pre-clinical, public and private, branch organizations now have to join forces

Generation Translation Delivery

BUILD BENEFITBUNDLE

…with a technology push…

…resting on a strong knowledge base…

…delivering continuously

…

…acting as a well oiled engine…

…with a strong

industry pull

A healthy pipeline…

Creating a healthy pipeline by building true partnerships

Invest on an annual basis with a stable budget for a longer period instead of incidental impulse financing

130

263248

2007 2008 2009 2010 2011 2012 2013 2014 2015

Taken to the next level…

…momentum lost?

…or… 182

4234

110 0

The sector should take responsibility for a long term strategy

Improve the LSH climate

• Creating a SME friendly environment fostered by a government with long term vision and a positive LSH attitude

• Remove regulation hurdles• Focus on value creation in the reimbursement

evaluation procedure• Increase the availability of human resources• Improve entrepreneurial skills• Make EC’s “Innovation Union” work for us, in funding

R&D and matching VC• Market the Netherlands internationally as one unique

life sciences region

Keep effective, successful instruments up and running

For example: ‘Innovatiekrediet’

1 euro credit loan… generates 2 euro private investment

2009: 13 mln. + 26 mln. = 39 mln.

+

Stakeholders should team up to realize these goals

• The knowledge base: UMC’s and Universities• The industry: small and large• The financing world• The branch organizations• Patient organizations• Health care providers• Health insurers • ….

One voice one message ….….. show our successes!

Dutch Masters in Life Sciences Health, …..The Dutch Innovation

Biotechnology in the Netherlands

LSH a shining future?

Let’s team up to make it happen together

Dr. Roland Lageveen

CEO IQ Corporation