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Biotech Investment: Reigning in Spain


Pharmaceutical Executive

Pharmaceutical ExecutivePharmaceutical Executive-08-01-2018
Volume 38
Issue 8

Over the last decade, Spain has seen a significant growth in venture-capital investment in the life sciences. We explore the driving forces.

Over the last decade, Spain has seen a significant growth in venture-capital investment in the life sciences. We look at the effect on the country’s evolving biotech sector


In March 2017, Labiotech.eu reporter Clara Rodríguez Fernández wrote that she noticed there was “far less biotech news” coming from her home country, Spain, than from the UK, France, or Germany. She tapped three of the country’s biotech leaders for a check-up on the sector’s health, and was heartened that they all agreed that “the country is at an inflection point for growth and international recognition.” Concluding that Spain is overcoming the challenges of the past and starting to catch up with other European countries, Rodríguez Fernández said it was “clear that we’ll start hearing more and more about Spain’s biotech in coming years.”

The Labiotech report eschewed some of the issues that still restrict the country’s biotech sector from stealing a march on some of its European neighbors, and it did not dwell on the conspicuousness of Barcelona’s towering lead over the other Spanish biotech hubs. But it shone a light on how, following its difficult journey through the global financial crisis, Spain has emerged as a region that has been quietly pressing ahead with a privately-financed agenda of investment in innovation, with a growing number of success stories under its belt. 

Following this lead, Pharm Exec caught up with some of the key players in Spain’s evolving biotech ecosystem to explore their contributions and opinions, and to gauge how much this new sense of optimism is warranted.

Influx of capital

The big catalyst for the increasing vitality of Spain’s biotech sector, particularly in the Catalonia region, has been an influx of venture capital. Catalonia now has 29 local investment bodies investing in life sciences; the five key firms specializing in the sector are Caixa Capital Risc, Inveready, Healthequity, Alta Life Sciences, and, particularly, Ysios Capital, the biggest biotech VC in Spain. Ysios’s co-founder and managing partner, Joël Jean-Mairet, told Pharm Exec: “Great science has been here for decades; we have top hospitals, centers of excellence, and high-quality research. But it’s only now that this research is being translated to industry, and venture capital is behind this.” 

Founded in 2008, Ysios Capital’s rise was helped by some fortuitous timing-the company closed its first fund three weeks before the collapse of Lehman Brothers. “If we had aimed to close just a couple of weeks later, it

Joel Jean-Mairet

would have been a different story,” says Jean-Mairet. However, the biotech sector has been relatively immune to the financial crisis in Spain “because equity VC financing allows biotech companies developing products to finance themselves. Other financing options, such as debt financing, are not possible because such companies obviously do not have any cash flows,” Jean-Mairet explains. Moreover, M&A activity between large pharmas and biotech companies has been relatively stable “because large pharmas are constantly seeking disruptive product candidates and are cash rich.” 

Over the past 10 years, from investment funds totaling close to €200 million, Ysios has invested in some of the major biotechs in Spain, including Sanifit, Minoryx Therapeutics, Aelix, STAT-Diagnostica (STAT-Dx), and Cellerix, which reverse-merged with the Belgian company TiGenix. STAT-Dx, which develops multiplex diagnostics for molecular analysis of common syndromes, was financed by Ysios and other international VCs, with over €40 million, and sold to QIAGEN earlier this year for $191 million. (“From scratch to exit was just six years,” says Jean-Mairet.) TiGenix, which exploits the anti-inflammatory properties of stem cells to develop novel therapies for serious medical conditions, was acquired by Takeda this year for €520 million. 

The importance of the specialized VCs for the Spanish life sciences sector cannot be underestimated. Before the arrival of firms such as Ysios, as Sanifit’s Joan Perelló explains, talking to general investors was like “speaking another language.” He says: “They talked about sales, revenues, short-term ROIs, break-evens, etc. I’m not saying those are not important concepts, but biotech stories are different stories. They are about building value, investing huge amounts in R&D. It was really challenging to raise money outside Spain until Ysios made its move. Now we can talk about these things with specialized investors.” 

Prior to Ysios, Jean-Mairet was all too aware of dealing with venture investors when he was “on the other side of the table” in his role as founder of a biotech developing a leukemia treatment (a company he later sold to Hoffman-La Roche). “I didn’t like it when a VC took three months to reply to my emails,” says Jean-Mairet. The experience urged him to push Ysios to speed up its own process when he saw it was starting to take more time to get back to proposals. “I said ‘We can’t have this’, so we instigated a process whereby every week we screen for things that we should look at. We may end up telling a company ‘Thanks, but no thanks,’ but we communicate that to the company very rapidly; we don’t take three months.”

VCs such as Ysios have given Spanish companies “more visibility to the outside world,” says Jean-Mairet. “There have been sizeable international rounds in the last couple of years; quite a few corporate venture funds-Novartis, Roche, and Lundbeck, among others-have invested in Spanish companies. This was in part thanks to Ysios Capital, because if you don’t have a local lead, raising money in other geographies is more difficult for biotech companies.” 

Perelló notes that after Ysios decided to lead its last financing round, Sanifit was able to attract “a very powerful syndicate of international investors, including Baxter Ventures and the Lundbeckfonden.” As Perelló told Labiotech.eu (March 14, 2017), “If you are a biotech in Spain looking for international investors, everyone wants to know Ysios’s opinion.”

Homage to Catalonia 

As mentioned, Ysios and Spain’s other key specialist VC companies are all based in Barcelona. The Catalonia region also is home to some of Spain’s biggest pharma companies, including Almirall, Ferrer, Grífols, Bioibèrica, Reig Jofré and Uriach, and is the Spanish base for multinationals like Amgen, Novartis, Sanofi, Roche, Bayer, Boehringer Ingelheim, and Lundbeck. Among the biotech success stories from the region are Orzon Genomics, Aelix Therapeutics, AB Biotics, and the aforementioned STAT-Dx. 



According to Biocat-whose mission is to promote innovation in the Calatan system by collaborating with university/research institute technology transfer officers and connecting the best projects with investors and pharma companies-the Catalonia BioRegion hosts 259 biotechnology companies. In Europe, Catalonia ranks third for biotech companies per capita (just behind Sweden and Switzerland); since 2010, on average, one new company per week is set up in the region. Between 2015 and 2017, biotech companies in Catalonia attracted more than €165 million ($193 million) in investment, 55% higher than 2013–2015. What’s more, Catalonia boasts 41 research centers and 780 research groups in healthcare and life sciences; 18 university hospitals; three large science facilities (ALBA Synchrotron, the Barcelona Supercomputing Center, and the Centro Nacional de Análisis Genómico); seven technology centers; and 14 science and technology parks with activity in life sciences. Across all sectors, 21% of Spain’s researchers work in Catalonia. 

This begs the question: when we talk about Spanish biotech, are we talking mainly about Catalonia and Barcelona specifically? 

Catalonia’s pharma and biotech space has a developed entrepreneurial culture, says Jean-Mairet. Barcelona’s hospitals, business schools, centers of excellence, and research tradition have seen the industry flourish there more than the rest of Spain. For Biocat Strategy Director Jordi Naval, in addition to the significant economic growth in recent years, the presence in Barcelona of major companies like Almirall and Grífols “have created a

Jordi Naval

source of talent and professionals, who know the pharma business, and a whole ecosystem of providers, from quality assurance to chemistry, manufacturing, and control (CMC) to regulatory affairs. This talent pool has been vital to the region’s development.” 

Naval reiterates that “there is a healthy entrepreneurial spirit. People make the jump from academia and set up companies. You can also see this in the region’s other sectors, such as digital and e-commerce.” He adds: “We have been living in a startup ecosystem, but now the ecosystem is scaling up, which brings in more investment and more talent.”

Perelló, however, is keen to widen the focus outside Barcelona and Catalonia. “If we look at what happened 20 years ago in the US, I think it’s the same here. People tended to concentrate in specific areas-Boston, San Francisco, San Diego, Chicago-because it was more efficient for investors, for companies, and for tech transfers,” he says. “In Spain, you have Barcelona, for sure, but you also have Madrid and the Basque Country. Sanifit is based on the Balearic Islands (Mallorca), which is a rare situation, but in 2015 we closed the largest private financing round ever in the Spanish biotech sector (€36.6 million).”

Perelló started Sanifit in 2004 with the vision of becoming the leading company in the field of calcification diseases. “We now have a Phase III-ready clinical asset, which we hope will be our first marketed drug,” he told Pharm Exec, “and we are pushing to diversify the pipeline to attack other disorders.” Sanifit is now “keeping a close eye on potential IPO opportunities in the mid-term,” says Perelló.

Nathan Waller, managing director, EMEA, of health technology company Medrio, points to firms in Madrid that are breaking through with pioneering treatments. Cellerix, now TiGenix, which uses stem cell technology to treat perianal fistula, regenerating the skin and closing the wound, is one of Madrid’s success stories. Medical device company Medlumics, developing a first-in-class, optically guided heart catheter with a built-in suturing device, is another. Madrid is also home to Spain’s largest public biotech, PharmaMar, founded in 1986. Back then, according to the company’s oncology business unit head, Luis Mora, the Spanish biotech sector “was not known by the public or even by the authorities” (Labiotech.eu, March 14, 2017). PharmaMar, which “takes inspiration from the sea to discover molecules with antitumor activity,” was the first company in Spain to launch a Phase I trial (in 2001). Today, it has a market cap of over $400 million.

Spain as a whole, says Perelló, offers “good science, good projects, and the profile of the entrepreneurs is very special. It is very cost efficient and has been able to raise public funds from competitive European and

Joan Perello

international projects, which means added value for investors.” He also points to the country’s high concentration of projects, international airports, and good climate as other advantages. “It is an attractive hub for everyone,” says Perelló. For Waller, who moved to Spain from the UK in 2006, the country “is a great place to live and do business. There’s something in the Spanish psyche about fighting through adversity, and this spills over into business.”

Most biotech activity, however, remains focused in Barcelona, which Naval sees as continuing to grow much faster than Spain’s other regions. “We are already on the path to where investing in Barcelona is as easy and straightforward as investing in Amsterdam, Brussels, or Berlin,” he says. “Once you start bringing in J&J or Roche, for example, they see that all the elements are in place here: the lawyers, the experts, the clinical expertise.” Naval adds that the region’s main hospitals are very collaborative in conducting clinical trials and the recruitment capacity in the main indications is high. “If you have the company, the investors, and the CMC all in the same place, and are able to conduct the clinical trials in the same region, it makes life much easier from a startup or biotech point of view,” he says. 

And with its dynamic cultural offerings, climate, and quality of life, Barcelona is an attractive destination for C-suite talent from the US, the UK, and the rest of Europe. “We have the advantage that talented and innovative people really want to move here,” says Naval.

Maintaining momentum

There is, of course, plenty of room for development in Spain. As Perelló points out, R&D expenditure at the country level is 1% of GDP. “It is difficult to reach critical mass with those levels of investment,” he says. “Projects come from universities, from hospitals, from tech transfers, and you have to feed all these institutions, not to create more quality but a higher quantity of quality. We have some success stories now, but we need more.” It has been difficult, Perelló adds, for researchers from universities, hospitals, and research centers to create their own companies. However, there have been recent improvements in the system with regard to tech transfers to private companies. Pointing to the Spanish BioIndustry Association’s (ASEBIO) road map for the education and training of professionals in the new employment niches created by the bioeconomy, Perelló says, “While the situation is still not optimal, we now have a framework.” 

Naval agrees that, even in the Barcelona region, “there still is an opportunity gap between the scientific potential and the number of startups that have begun operations.” But, he emphasizes, “smart investors are seizing the opportunity and it is gaining momentum.” 

For his part, Jean-Mairet predicts more consolidation over the next two to three years. “I think we will see more transactions, more international rounds, and hopefully more exits,” he says. “The ingredients are there now for Spain’s biotech activities to have more international appeal for investors. We have the talent, the science, the infrastructure, and we have the capital.” 


Julian Upton  is Pharm Exec’s European and Online Editor. He can be reached at julian.upton@ubm.com

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