In Belgium there is a high concentration of bio-pharmaceutical companies, together with excellent research centers and universities. This is a unique and an important driver of innovation and has resulted in the life sciences sector performing extremely well. But is there still room for improvement? What are the challenges involved in starting a life sciences company in Belgium? We spoke with Erwin Blomsma, Chairman of the Board of FlandersBio and co-founder of several companies – a man driven by innovation who after a busy day can be found relaxing in his vineyard.
You have founded several companies; what was your motivation to become involved in startups?
Blomsma: "I have always been enthusiastic about new technologies and fostering innovation. However, I wanted the ability to assess and develop them faster than a large corporate structure would allow me to. That is why, in 2000, I left Johnson and Johnson to get involved in several startups, as innovation can be driven in a much more dynamic way when working in the flexible environment found in start-ups. In 2007, I was involved in creation of the business plan and subsequent founding of the animal therapeutics company Okapi Sciences."
Why did you choose to focus on animal therapeutics?
Blomsma: "Animal models play a role in most drug development programs. When a human drug enters the clinical testing phase, the pre-clinical data that was generated using animals is typically forgotten about or not used any further. However as animals get older they can develop diseases similar to those found in humans. When we started Okapi Sciences we focused on developing antiviral drugs for pets, which was clearly an unmet need. We did this in conjunction with the Rega institute at KU Leuven, which helped to make us a leader in the field. Now that our drug portfolio has joined with that of Aratana Therapeutics, there are almost 20 drugs in the development pipeline, which is more than the biggest players on this market have."
In January 2014, Okapi was acquired by Aratana Therapeutics, an American company. Entry barriers are known to be lower in the US, as compared to the EU, when starting a life sciences company. What are the main differences you have found when leading a company that is present on both continents?
Blomsma: "The perception and attitude towards entrepreneurship, of both investors and business angels, is different to that of the EU. Entrepreneurship is more commonplace in the US, and they are willing to take the risk of supporting young innovative companies. Additionally, failure is generally not seen as a negative, as you gain experience for future projects. However, in Europe failure of a business can be seen in a very negative light. This can lead to many people in the biotech industry being afraid to start their own company, as they are afraid of failure."
"The American investment climate is also different, certainly in terms of orders of magnitude. In Europe, startups typically struggle to raise $10 million in investments but in the US it is possible to raise up to ten times that amount. The valuations that are given to startups or technologies are much lower in Europe as compared to the US. Europe is slowly starting to bridge these gaps, and we also see an increase in American interest in European startups. Once you have an American investor on board, European investors may be more willing to invest in the company."
Belgium is amongst the leading life sciences clusters in Europe. As chairman of FlandersBio, how would you describe the current situation in the local life sciences industry?
Blomsma: "What we have built in Belgium is extremely impressive. We represent close to 20% of the European market cap in life sciences while representing only 3% of the population and we are a world leader in the number of clinical trials per capita. The key to Belgium’s success in these areas includes the support of innovation through the government’s patent income deduction, partial withholding of tax exemption for researchers, investment deductions, R&D tax credits, and access to subsidies. In addition, we have excellent universities and research institutes with well-trained and educated staff such as VIB, IMEC, VITO. Furthermore, the life sciences sector has grown over the years and as a result we have access to a huge talent pool. The combination of these factors in a very small area leads to a situation that is very unique. However, we need to take steps to plan for the future to ensure that we can sustain or increase the performance of the Belgian life sciences sector."
What is the future of the Belgian life sciences sector?
Blomsma: "We are trying to anticipate where the life sciences industry, and healthcare in general, will be in 2025. We have seen innovations such as personalized medicine and advanced electronics. They become important tools in the life sciences industry. Big corporations are also beginning to invest in these innovations, for example Samsung, together with IMEC, have developed a wearable health-monitoring device - a real smartwatch - that allows third parties to develop and integrate their sensors. Google has also announced the development of a watch that will be able to monitor the users health information to be used in clinical trials recently. We predict that we will see closer collaboration across various disciplines, as we already see with institutes like IMEC and VIB; the industry begins to integrate e-Health solutions. Moreover, we believe that Big Data will play a major role in healthcare and life sciences."
"We also need to continuously educate the market, for example we launched a series on kanaalZ, regarding advances in the Life Sciences sector. The series will inform people about new technologies and products that soon will be available on the market and about the potential benefits that they may provide. Our future life sciences companies will need the best management teams so with FlandersBio (among others) we are preparing a dedicated MBI program so that our sector will get the drivers and leaders it deserves."
You mentioned that you own a vineyard, is it located in Belgium?
Blomsma: "Belgium, and in particular the Hageland, is well known for its vineyards. When the Romans were in power they planted vineyards throughout their empire, including Belgium. Production peaked around the 1400’s, when vineyards were established from Leuven to Diest and Hoegaarden. In the area surrounding where I live, there are 6 or 7 vineyards, some of which have even won European medals for the wines that they have produced. However, I do not think of the vineyard as a ‘biotech’ business, as I find that working in the vineyard is a way for me to relax and unwind after a busy week."