Just two years ago, AstraZeneca launched a new kind of business incubator, AstraZeneca Bioventurehub, and management is already excited about the results, says the CEO of the incubator, Magnus Björsne, who has a long career in the company.
The initiative is noticed because it differs from other company hubs like it, which are getting more and more numerous.
“No one has constructed a center like this before and two things make it unique. First, we don’t assist the companies with their business plan, we only offer technical expertise, and second, we focus on companies with development activities, not just early innovation, like many others. Because this is the tricky and expensive part, especially if you make a mistake,” Magnus Björsne explains.
Thus, the initiative confirms the results of a study of more than 70 companies, asked about their needs in order to increase the odds for success. They did not seek help with business plans, but rather support of the technical development of the company.
Three reasons why it collapses
The idea emerged when AstraZeneca started consolidating its research and development facilities into three locations instead of 11. In Gaithersburg, US, Cambridge, UK, and Gothenburg, Sweden.
While the two first locations are well established in the fields of medicine and biotech, Gothenburg is a bit more under the radar, which is the reason why AstraZeneca started looking for options for distinguishing the Swedish research facilities. This was the beginning of BioVentureHub and Magnus Björsne saw its potential right away.
“Previously, I was involved in business development and buying companies. I have analyzed hundreds of global biotech companies and we intended to buy them but cancelled after due diligence. There were three very evident reasons,” Magnus Björsne tells.
First, the IP rights were often an obstacle but there were not many solutions to this. However, the two other problems could be solved. Partly, it was often a matter of the formulation of candidate drugs, e.g. as regards its shelf life – is it a sustainable drug, one will not have to reformulate to find a commercial variation?
Next, there is the combination of the clinical design with the commercial understanding and the regulatory reality, e.g. having not only the current, but also the future market in mind when designing the clinical research.
“We realized that finding an economic model for when our expertise would be useful for the companies was beneficial for all of us. We would be able to get more funds to Sweden and the rest of the Nordic region and to us, it would be a positive cultural influence on the company to have small, innovative businesses here. It is really all about making the ecosystem more efficient.”
To whom are they building a relationship?
Today, BioVentureHub has 20 companies and an academic group and is partly financed by Swedish funds and organizations supporting business promotion – Vinnova, Business Region Gothenburg, the region of Västra Götaland, and Carl Bennett AB. Thus, AstraZeneca has minimized many expenses but at the same time, they have high demands for the businesses wanting to join. For instance, they have to have the financing secured.
“If you can’t do more than pay your rent and are not able to do your research, this is not a place for you. It might sound harsh, but we need strong companies because good people attract more good people. Right now, our rent is just the half of a university incubator’s and since the rent is so cheap, we must be selective. Because there is a lot of interest,” the AZ executive says.
The incubator does not have an option on or exclusive right to the companies in BioVentureHub. Nor does it invest in these companies. However, the incubator watches them closely.
“To whom do you think they build a relationship? Us, of course. Who do you think get to know the company best? Us. If there is potential for a cooperation between AstraZeneca and one of the BioVentureHub companies, the chance that this happens increases dramatically when we are already close to each other,” Magnus Björsne says.
The project is so far set to last five years and AstraZeneca has guaranteed a doubling of the numbr of companies involved. Because to date, the project is doing well in terms of job creation and business growth. However, the capacity is limited.
“What limits our expansion is that we can’t guide the companies at the expense of our own priorities. Second, it is the accessibility of companies wanting and being able to move their organization. This is our obstacle, space is not,” Magnus Björsne explains.
To solve the first problem, the incubator is welcoming other companies than just biotech, for instance, companies in the field of medtech or digital health solutions.
“They don’t really need our expertise but BioVentureHub offers them an option for becoming influenced by the need of the customers, and it is very valuable for us that these companies add complementary competences to the cluster.”
Open to Danish companies
The last problem is a bit more complicated. For instance, the incubator would like to have more foreign businesses, especially from Denmark and the other Nordic countries, but it is not easy making someone move while they are establishing themselves somewhere else. Recently, however, the incubator succeeded in attracting a US-based company by offering them the option of placing a subsidiary in BioVentureHub instead of having the main organization there.
Despite the obstacles, Magnus Björsne is sure that the project will continue. Both due to the results it has created so far, but also because of what it represents.
“A concept like this is very interesting. Our organization consists of more than a thousand people, the majority of which are trained in performing medical experiments, but we never experiment with how to run a business. So to me, this is really a big and important experiment for knowledge and business development.”
English edit: Ida Løjmand
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