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Pharmaceutical Hub Switzerland Zurich-Zug-Lucerne

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Pharmaceutical Hub Switzerland Zurich-Zug-Lucerne PHARMACEUTICAL HUB SWITZERLAND ZURICH-ZUG-LUCERNE TABLE OF CONTENTS Preface 4 Pharmaceutical Industry in Switzerland 6 Swiss Pharma Clusters 8 Growth Driver Pharmaceuticals 10 Zurich-Zug-Lucerne Region 20 Innovation Capacity 30 Inward Investment Factors 36 Outlook 44 Company Profiles 46 Glossary 62 PHARMACEUTICAL HUB SWITZERLAND / ZURICH-ZUG-LUCERNE 3 PREFACE Thomas B. Cueni Secretary General Interpharma Switzerland – attractive for global pharmaceutical companies If asked about the Swiss economy, people usually first think of banks, chocolate, tourism or watches. These industries are indeed of major importance for the national economy. Yet an industry that is often missing in this list, despite having emerged as one of the leading lights in the Swiss economy over the last century, is the pharmaceuti- cal sector. The aim of this publication on the Zurich-Zug-Lu- cerne cluster is to show the importance of the pharmaceu- tical industry for the Swiss economy, which is by no means confined only to Basel. The importance of the pharmaceutical industry for Swit- zerland is reflected in the figures: in total more than 40,000 people work directly for the pharmaceutical com- panies. If the indirect work created through ancillary industries is included, as many as 170,000 jobs are related to the pharmaceutical industry. Moreover, it accounts for around one-third of all Swiss exports, and the productivity of the industry is four times as high as that of the economy as a whole. Three big clusters – the Lake Geneva area, the Basel region and Zurich-Zug-Lucerne – account for the lion’s share of the gross value added of the Swiss pharmaceutical industry. 4 PHARMACEUTICAL HUB SWITZERLAND / ZURICH-ZUG-LUCERNE The Zurich-Zug-Lucerne cluster can compete on various counts: not only do the three cantons offer an attractive environment in regulatory and fiscal terms, but they are also readily accessible thanks to excellent transportation infrastructure and attract highly qualified people. All this has led to a number of international companies establish- ing their headquarters in this region and contributing to dynamic economic growth thanks to their investments in research and development. Within just a few decades, Zurich-Zug-Lucerne has devel- oped into a leading life sciences cluster for the agrochem- ical, biotechnology, medical technology and pharmaceuti- cal sectors, all of which are heavily engaged in research. In the Zurich-Zug-Lucerne region, the life sciences industry accounts for one out of every four francs earned in exports today – twice what it was in 2000. This is due amongst the things to the increase in research activity, which has led to the region today already filing around 60 patent applica- tions a year for every million inhabitants. The Zurich-Zug-Lucerne cluster also offers, albeit to a lightly lesser extent, attractive medium to long-term growth prospects: the research institute BAK Basel Eco- nomics forecasts an annual value-added growth of more than 4 percent for the regional pharmaceutical industry up to 2020. The role of the pharmaceutical sector in the region is thus likely to grow further in the future as well. And perhaps this sector will one day be known as a flag- ship industry of the Swiss economy like the watchmaking industry. PHARMACEUTICAL HUB SWITZERLAND / ZURICH-ZUG-LUCERNE 5 PHARMACEUTICAL INDUSTRY IN SWITZERLAND 4 9.1% times more pro- average annual growth rate ductive than overall of GVA (2000–2012) economy (2012) 24 66 billion CHF billion CHF of nominal GVA (2012) exports (2013) 40 000 employees (2012) Pharmaceutical industry in Switzerland, including all direct and indirect effects, 2012 – nominal GVA: 43 billion CHF – employees: 172 000 Source: FSO, Polynomics, 2014. 6 PHARMACEUTICAL HUB SWITZERLAND / ZURICH-ZUG-LUCERNE The pharmaceutical industry impacts the Swiss economy both directly and indirectly. The direct economic impor- tance of the pharmaceutical industry can be measured for example by the number of employees, the value of exports or the gross value added (GVA). The latter is defined as the increase in the value of goods resulting from the produc- tion process and is calculated by deducting the value of intermediate goods and services from the total production value. The GVA of the pharmaceutical industry has grown on average by more than 9 percent annually over the last decade and is thus far higher than the GVA of other indus- tries. The indirect economic importance of the industry arises from its interdependencies with companies from other industries, from the wage earnings of its employees and from the tax revenue from the companies. All these fac- tors create an additional demand for consumer goods and services, which in turn generate approximately 130,000 jobs in other industries. PHARMACEUTICAL HUB SWITZERLAND / ZURICH-ZUG-LUCERNE 7 SWISS PHARMA CLUSTERS n Basel region n Ticino n Lake Geneva area n Schaffhausen n Zurich-Zug-Lucerne n Valais Roughly 75% per cent of the gross value added (GVA) in the Swiss pharmaceutical industry in 2012 has been generated by the Basel Region, Lake Geneva area and Zurich-Zug-Lucerne. 2014. BAKBASEL, Source: 8 PHARMACEUTICAL HUB SWITZERLAND / ZURICH-ZUG-LUCERNE Basel region The pharmaceutical cluster Basel is home to the head- quarters of pharmaceutical companies steeped in tradi- tion, such as Boehringer Ingelheim, Novartis and Roche, as well as the biopharmaceutical company Actelion. Lake Geneva area The cantons of Bern, Fribourg, Geneva and Vaud consti- tute the Lake Geneva cluster and are home to the Swiss branches of GlaxoSmithKline, Merck Serono, Sanofi and UCB. Zurich-Zug-Lucerne The Zurich-Zug-Lucerne cluster has grown into an attrac- tive centre for international life sciences companies and is home to the following companies: AbbVie, Alcon, Amgen, AstraZeneca, Bayer, Biogen Idec, Bristol-Myers Squibb, Gilead, Janssen, Lundbeck, Merck, MSD (Merck Sharp & Dohme), Novartis, Pfizer, Roche and Vifor Pharma. Schaffhausen-Ticino-Valais Besides the big pharma clusters, there are three smaller clusters in Switzerland: In Canton Schaffhausen, the phar- maceutical industry plays an important role for the local Source: BAKBASEL, 2014. BAKBASEL, Source: economy and is based on the activities of Cilag, a subsidi- ary of the pharmaceutical company Janssen that is part of the Johnson & Johnson group. In the Ticino cluster, the pharmaceutical industry has grown historically and now includes several medium-sized companies. Canton of Val- ais plays a strategic role as supplier of chemical inputs for the pharmaceutical production. PHARMACEUTICAL HUB SWITZERLAND / ZURICH-ZUG-LUCERNE 9 GROWTH DRIVER PHARMACEUTICALS 10 DER PHARMA STANDORT SCHWEIZ / ZÜRICH-ZUG Established in the second half of the 19th century, the pharmaceutical industry quickly assumed an important place in the Swiss economy and remains one of the strong- est growth industries to this day. This is due not only to the historical significance of the pharmaceutical industry in the region of Basel, but also to the attractive business environment of Switzerland as a whole. For the fourth time in succession, Switzerland was ranked first in the Global Innovation Index of the World Intellectual Property Organization (WIPO) in 2014. Switzerland’s capacity for innovation is an essential precondition for a prosperous pharmaceutical industry. Other factors such as tax, accessibility and a large pool of highly trained employees are attracting leading companies in the fields of pharmaceuticals, biotechnology and other related industries to Switzerland. Thanks to its innovation capacity, the pharmaceutical industry typically achieves an above-average level of pro- ductivity, and the productivity growth rate also usually outstrips that of industry as a whole. PHARMACEUTICAL HUB SWITZERLAND / ZURICH-ZUG-LUCERNE 11 GROWTH DRIVER PHARMACEUTICALS Major importance of Swiss pharmaceutical industry In an international comparison of average value-added growth rate, the Swiss pharmaceutical industry came out top: between 2000 and 2012, the Swiss pharmaceutical industry showed an average annual growth of just over 9 percent, ahead of Germany and the Netherlands and more than twice as high as that of the UK and the USA. The value added of the Swiss pharmaceutical industry is also impressive as a proportion of the overall economy, with the industry generating more than almost four per- cent of Switzerland’s Gross Domestic Product (GDP). Even in second-placed Belgium, this proportion is below two percent. The contribution of the pharmaceutical industry to GDP has thus steadily grown over recent years. As a consequence, the importance of the industry for the Swiss economy as a whole has also grown. 12 PHARMACEUTICAL HUB SWITZERLAND / ZURICH-ZUG-LUCERNE GROWTH RATE OF VALUE ADDED IN THE PHARMA INDUSTRY Annual average growth rate per year (in %), 2000-2012 Switzerland 9.1 Netherlands 6.1 Germany 6.0 Denmark 4.3 Sweden 4.1 UK 3.6 USA 3.2 France 1.8 Italy 1.4 0% 2% 4% 6% 8% 10% Source: BAKBASEL, 2014.* VALUE ADDED IN PHARMA RELATIVE TO TOTAL ECONOMY Share of GDP (in %), 2012 Switzerland 3.9 Belgium 1.7 Germany 1.4 Denmark 1.1 Italy 0.9 USA 0.8 Japan 0.8 UK 0.7 Netherlands 0.6 France 0.5 0% 1% 2% 3% 4% Source: BAKBASEL, 2014.* * International data according to BAKBASEL database 2013, Swiss data according to ESA 2010. PHARMACEUTICAL HUB SWITZERLAND / ZURICH-ZUG-LUCERNE 13 GROWTH DRIVER PHARMACEUTICALS VALUE ADDED IN THE SWISS PHARMA INDUSTRY Nominal GVA (in m CHF) Real GVA (index, 1997 = 100) 20 000 400 15 000 300 10 000 200 5 000 100 0 0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 Source: FSO, BAKBASEL, 2014. VALUE ADDED IN PHARMA RELATIVE TO TOTAL ECONOMY Share of nominal GVA in GDP (in %) 4.0% 3.9 3.0% 2.0% 1.0% 0.0% 97 99 01 03 05 07 09 11 12 Source: FSO, BAKBASEL, 2014. 14 PHARMACEUTICAL HUB SWITZERLAND / ZURICH-ZUG-LUCERNE EMPLOYEES IN THE SWISS PHARMA INDUSTRY Number of persons 40 000 30 000 20 000 10 000 0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Source: FSO, BAKBASEL, 2014.
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