If you were asked what Belgium is best known for, you would probably answer with Hergé’s Tintin, football, chocolates, waffles, frites, the creation of the saxophone, and world-beating craft beer brewed by Trappist monks. It is unlikely, however, that you would mention biotech in the same breath as the above.
With most of its activity in this space falling within the health and life sciences sphere, Belgium invests more per capita in biopharmaceutical research and development (R&D) than any other European Union member. In addition, it also ranks highly for biopharmaceutical patent applications, clinical trials, and biopharmaceutical exports per inhabitant. So, in the year of doom and gloom that is 2020, it’s unsurprising that Belgium has been a key player in the fight against the Covid-19 pandemic.
First, some background. An underlying factor behind Belgium’s reputation as a world-class biotech hub is its diverse ecosystem of stakeholders. Noted for its highly skilled (and growing) workforce, the country has a wealth of resources on the research side, including high-quality universities, R&D centres, and other scientific institutes. It is also home to a large number of start-ups and SMEs (who tap into the aforementioned local R&D expertise).
The country’s approach to finance and taxation makes it an attractive locale for emerging pharma and life sciences companies, with support coming from the Belgian government, regional authorities, and the EU. In addition, the strength of biotech companies in creating new products makes them ripe for investment from domestic and foreign investors, particularly venture capital firms.
Away from start-ups and scale-ups, research indicates that native Belgian biotech companies, such as Galapagos and Biocartis, account for 24% of the market capitalisation of public biotech companies across Europe. It is also noteworthy that each of the ten largest biopharmaceutical companies globally have operations in Belgium.
At a time when the race is on to test, develop, and roll out innovative new vaccines, Belgium has been well-placed to lead the charge against Covid-19. At the time of writing, a coronavirus vaccine created by Pfizer and BioNTech is being manufactured in Puurs, Flanders. In addition, Flanders-based Janssen Pharmaceutica (a subsidiary of Johnson & Johnson) is conducting clinical trials of a new vaccine, which is expected to be rolled out in 2021.
So, what have been the key priorities and concerns of Belgium biotech companies (and by extension both their in-house and outside counsel) over the past 12 months? ‘I think maintaining business continuity was foremost on biotech companies’ minds,’ says Catherine Longeval, a life sciences regulatory partner at Van Bael & Bellis. ‘The pandemic disrupted the supply chain. Some manufacturing sites were closed [during the lockdown] so some clients were forced to look for alternative suppliers of active pharmaceutical ingredients (APIs) and raw materials.’
Another priority, explains Longeval, was ensuring patients and hospitals received the medicines they needed: ‘Because of the lockdown measures, at-home care became even more important, so substantial resources were devoted to increasing patient support programmes. As demand for certain medicines grew massively and exceeded supply, difficult decisions had to be taken on how to allocate the available product.’
In-house counsel have also been kept busy in other key areas, including advising on workplace safety measures for staff in offices and factories. Also notable is how companies developing vaccines to combat the novel coronavirus have been busy negotiating advance purchasing agreements with the EU.
As with other industries, technology has played a vital role in helping maintain the day-to-day functioning of biotech companies. As Longeval notes: ‘Interactions between marketing teams and healthcare providers had to be rethought as physical visits were prohibited. Technology has been key in that respect.’
As has been well documented in the legal press, private practice lawyers have also faced challenges this past year. ‘Like all law firms, we have had to adapt to the pandemic’, Longeval says. ‘Physical meetings with clients, in our office, at their office, at conferences, etc were impossible and virtual meetings will likely become the norm even after the pandemic has passed. Therefore, we will have to be creative in how we keep connected to our clients.’
Beyond operational issues, another key question is the extent to which biotech companies of all shapes and sizes have been able to raise finance. Has the pandemic had an impact on investment activity at all? Not at all, according to Michel Bonne, an M&A partner at Van Bael & Bellis.
‘We have noticed strong investment interest and activity across all levels, from seed level to going public,’ he says. ‘There is no doubt the pandemic has increased awareness of the importance of biotech and enhanced visibility of those companies active in this area.
‘Biotech clearly offers tools in our fight against diseases (such as Covid-19) and ageing in a society that is increasingly interdependent and healthy – this presents unique investment opportunities for companies and states. When examined in the context of current investor appetite, promising biotech and e-health companies are not facing difficulties in raising financing. Instead, they are attracting a lot of interest from M&A suitors.’
The long-term outlook for the biotech sector (and the law firms who service it) looks extremely bright. ‘Work-wise, we are confident about the future,’ says Longeval. ‘The pandemic has made a lot of people realise that biotech companies can have a hugely positive impact on our society. Even post-Covid, there will be a lot of work in the life sciences sphere.’
As 2020 draws to a close, let’s raise a glass of Trappist beer to our friends in Belgium who are working hard to make 2021 or a more positive year than the last.