Portugal: Riding the Wave of Economic Reform - Pharmaceutical Executive


Portugal: Riding the Wave of Economic Reform

Pharmaceutical Executive

Over the past five years, Portugal has experienced the emergence of more than 40 start-up biotechnology companies distributed among its three main centers, Lisbon, Braga/Porto and Coimbra. The Portuguese biotechnology industry is awakening, but there is still much room for development, particularly in comparison with Europe. The country has an unusual concentration of agriculture-oriented biotechnology: Only 30% of biotech companies do work related to the health sector, as opposed to 53% in Europe and 64% in North America. Most of the Portuguese companies are still recent spin-offs of local universities. Their average annual turnover is US$600,000, and they are struggling to find the necessary investments to grow. In the country's first national biotechnology meeting held last November by the National Biotech Association (Apbio), Johan Vanhemelrijck, EuropaBio's secretary general, spoke emphatically about the source of this problem: "In the US, innovation means progress; in Europe, it means risk."

The Spirit of Risk

The lack of venture capital and the cultural resistance are two of the major barriers also encountered by Hassard. A manager at the North American company Amgen who worked nine years in California's Silicon Valley, he states, "I do understand that there is a tremendous aversion to risk, and several factors don't encourage people to follow the path of a 'start-up' operation. If the economy were to better reward risk, we could see more success stories." The company is playing a leading role in challenging the existing environment and fostering the Portuguese biotech sector. "Amgen has the organizational history of knowing what it was like to be a small biotech company with little resources as well as the pitfalls in becoming larger and moving forward. Furthermore, now that the company has resources, there is strong global management that understands how and where to help, and where and when to invest", says Hassard.

The current situation in Portugal has piqued the interest of many companies like Organon Portuguesa and Lusomedicamenta in starting to prospect for biotech opportunities in the country. Perhaps biotech could be the sector to revive the industry's morale and drive its innovation engine forward, yet there is a long way to go. The one thing we can be certain of when it comes to Portugal, as Novo Nordisk's Araujo points out: "The country simply can no longer afford to see Europe from behind."

Exports: To Sail Is Necessary

Carlos Setra
The words of the famous Portuguese poem "To Sail Is Necessary," published by Fernando Pessoa in the beginning of the 20th century, capture the country's natural inclination to look overseas. Nevertheless, this has not necessarily been reflected in the pharmaceutical business. Portuguese companies, as happened with Fernando Pessoa throughout his lifetime, are often not appreciated according to their true value. "The world market is not very aware of the capabilities of the Portuguese pharmaceutical industry, and initiatives as such are important to enhance the international exposure of Portuguese companies. Although the pharmaceutical sector in Portugal is not as developed as it is in some other European countries, taking into account the country's size, we have a relatively strong pharmaceutical industry," says Lusomedicamenta's Barros Ferreira, who speaks with the authority of someone whose company exports 55% of its production to more than 47 markets.

Although Portuguese exports are the third most important sector to the country's economy, the Portuguese pharmaceutical industry's total exports closed around a modest 300 million (US$397 million) in 2005, a 10% increase over the past two years.

Recognizing the industry's underperformance, a three-party institutional collaboration - involving the National Institute of Pharmacy and Medicines, the National Foreign Trade Organization (ICEP) and Apifarma - created the PharmaPortugal project to raise the world's awareness of the Portuguese pharmaceutical industry.

It was about time. The export numbers of the companies involved in the PharmaPortugal project, which are mostly national producers, reveal that export numbers had been decreasing.


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