“Why do we have a Roche Innovation Center in Copenhagen? The answer is obvious; because that’s where the talent is. We go where there are talented people and solid science. In this case it happened to be Denmark, and it then becomes the basis for increasing our effort in the country – and we are happy to do so.”
The words come from Christoph Franz. He has served on the Board of Directors for Roche since 2011 and been Chairman for the Swiss life science major since 2014.
The industry giant, which generated revenue of CHF 37.5 billion (USD 37 billion) during the first nine months of 2016 alone, took control of Danish biotech Santaris in 2014. Roche bought the biotech for USD 250 million, but opted to keep its employees in Copenhagen. Instead of integrating Santaris’ research in its activities in Basel, the group transformed it into one of its now seven global innovation centers.
“We felt there was high performance and a team with very innovative ideas here, and that was the reason why we decided to keep this unit with scientific entrepreneurship and spirit in Denmark. We value those types of people highly in Roche and that’s why we rebranded Santaris as Roche Innovation Center Copenhagen,” Christophe Franz tells MedWatch during a visit to the former Santaris Pharma in Hørsholm just north of Copenhagen.
Recipe for success
When a major corporation with a large research organization buys a smaller biotech company, the spirit of the startup company can easily be lost in the bureaucracy of the larger organization, Christoph Franz believes.
“That spirit is one of the recipes for success, and we want to maintain that; innovation is not something you simply order. Viewed in isolation, an acquisition doesn’t add much value in itself. In buying a company, you can attract the talented individuals who are a part of that company. While it's relatively easy to move equipment and documents, it’s a lot more difficult to move people and their families.”
In the case of Santaris, Roche acquired a novel technology originated by Danish professors at the University of Southern Denmark. Santaris was then founded in 2003 through the merger of two smaller biotech companies.
It attracted its first funding from Sunstone Capital and later Novo Ventures. According to the Danish Growth Fund, the company has attracted total venture capital to the tune of DKK 600 million (USD 85 million).
The funding was used to develop Santaris’ proprietary LNA platform technology, which is used within a range of diseases areas, especially in oncology, to prevent diseased cells from creating harmful proteins.
“It’s an interesting platform that doesn’t just give us molecules for one specific therapeutic area, but a number of areas. It’s very exciting. We have opted to perform this type of research out of Denmark, and that goes for the entire global Roche organization,” the Chairman explains.
Santaris’ solid footing in basic research should be a lesson to Danish politicians, says Christoph Franz, as the country’s government last year cut back heavily on investments in research.
“Build on your strengths. Invest in basic research. That’s the key to everything. The Swiss government gives an awfully big amount of money to two universities; ETH Zürich and EPFL Lausanne. They are focused. Those two universities should be among the best in the world,” the Chairman says.
Talent and framework
Both of those universities figure on the QS ranking of the top universities in the world as number 8 and number 14, respectively. It puts ETH ahead of renowned academic institutions like Princeton, Imperial College London, and Yale. To put that into perspective, Copenhagen University is the highest ranking Danish university at number 68.
“There has to be outstanding academic institutions to create the talent, and then you need the framework to ensure that the talent will be here and that you attract the talent to come here.”
Aside from basic research, Christophe Franz points to the importance of favorable tax conditions and good, international schools, as well as the overall attitude to foreigners. You have to feel welcome in the country. All of these factors have also been highlighted by Novo Nordisk's chief science officer, Mads Krogsgaard Thomsen, as things to focus on and reinforce in Denmark.
“The conditions are good here in Denmark. You have a healthcare system that is very focused on innovation and on bringing that innovation to patients quickly. It’s a country that welcomes the pharmaceutical industry and employees attracted to the country feel comfortable here. Moreover, we also have good relations to the academic institutions. Last but not least, there are stable financial and political circumstances.”
Taxes and ecosystem
But he also takes some issue with the Danish tax system. In Switzerland, earnings from stock trading are not taxed, which can help attract risk capital for smaller biotech companies, which again can help build an ecosystem that benefits the larger corporations.
“Roche is the biggest research-based pharmaceutical company in the world, and if we can bring just one or two drugs to market every year, it’s a blessing,” says Cristoph Franz about the necessity of having a vibrant ecosystem of innovative biotech players. He adds:
“We invest three times as much venture capital in Switzerland as you do in Denmark. It makes a difference. How is the tax system if you create a company that becomes a success and is sold? High? Then forget it. You can still create individual success stories, but you don’t create an ecosystem.”
The Chairman says the outline for a strong life science environment is present in Denmark, highlighting the growth team for life science appointed by the government as another positive development, but he also points out that there are a lot of regional hubs in play when Big Pharma scrutinizes the world map.
“You have a good platform and basis to build on, but there are other, bigger hubs. Not all pharma companies can invest in all hubs. Bay Area, Boston, North Carolina, Basel, Heidelberg, Munich, Tokyo, Singapore, Shanghai; the list goes on.”
- translated by Martin Havtorn Petersen
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