What British start-ups can learn from Swiss Biotech Day 2023

Viewpoints
May 9, 2023
2 minutes

We recently discussed the key trends from the recent Swiss Biotech Day. However, there is so much to take away that it is worth considering the comparisons between Switzerland and (post-Brexit) UK in a separate post.

We have previously noted how the UK was seeking to forge a closer relationship with Switzerland post-Brexit. The two countries have much in common, with European-leading financial services and life sciences sectors, as well as an increasingly complex relationship with the EU.

Access to growth and large scale capital: There was a general consensus that while the Swiss ecosystem is relatively good at building start-ups and has some large pharma, it has an underdeveloped bridging / growth finance and domestic liquidity options. Instead, many smaller companies struggle to grow into sustainable biotechs, other than through turning to the US market. In addition, few Swiss companies choose to pursue a public exit domestically, in favour of a listing in the US (on NASDAQ). 

The UK is currently grappling with exactly these same issues. The UK Government is trying, through its Science and Technology Framework, to encourage more domestic pension funds to support high growth companies (particularly in life sciences). In addition, the UK’s financial regulator is consulting on reforms designed to encourage UK listings. The combination of all of this means the rewards for success are lower in Switzerland, but with greater hurdles.

Dominance of the US: On the same topic, the US healthcare market loomed large over the conference. One panellist noted that for US companies Europe is an option, whereas for Europeans the US is a must. The potentially greater revenues (and current strength of the Dollar) have created a number of structural disadvantages for European biotechs compared to their American peers. In addition, European venture rounds tend to be smaller than in the US, meaning that Swiss companies are required to make “pit stops” more frequently (with the associated impacted on timings and costs).

International collaborations: A key component of the modern life sciences industry is collaboration, often internationally. However, the Swiss Biotech 2023 Report highlights Switzerland’s particular strength in this area, with significant cooperation. One of the UK’s current strengths is that it has deep international ties. However, there is a sense that UK biotechs could be doing more in this area if they are to compete on a per capita basis with Switzerland, as well as on a governmental level (as seen in the recent questions about participation in Horizon Europe).

In conclusion, the UK and Switzerland continue to share many similarities as Europe’s leading life sciences sectors. The fact that neither are based in the EU creates some issues for them, but should also be a cause for concern for the trading bloc.