SPONSORED SUPPLEMENT Italy Report More spotlights on pharmaceutical markets worldwide at Pharma.FocusReports.net L’uomo Vitruviano by Leonardo Da Vinci ITALY: Towards Pharmaceutical Renaissance PART TWO learly, innovation in Italy did not die with Da Vinci. Today, Cthe Italian pharmaceutical industry may lack the large mul- tinationals of the past—Carlo Erba and Lepetit—but it can still play a signifi cant role in the more innovation-driven markets. This sponsored supplement Numbers speak for themselves: 260 biotech companies gen- was produced by Focus Reports. erating a turnover of € 5.4 million in 2008, accounting for more Project Publisher: Béatrice Collet than 0.6 percent of the Italian turnover, and a 24 percent year- Project Editor: Sophie Thiard Graphic Assistant: Omar Rahli on year growth rate with respect to 2007. A pipeline of 258 products in development, of which 136 have already reached For exclusive interviews and more info, please log onto the clinical phase. Italy’s fi rst competitive advantage, extensive www.pharma.focusreports.net or tradition of research excellence, is solid enough to navigate the write to [email protected] sea change generated by the current economic turmoil. AUGUST 2009 FOCUS REPORTS S2 SPONSORED SUPPLEMENT Italy Report Going back in time, the National Research Centre so only for personal reasons. Combined with declining invest- (CNR) has been the main breeding ground of Italian sci- ment in research, such defi ciency could compromise the future entifi c discoveries since its creation in 1982–an “origina- of Italian innovation. “However,” Maiani notes, “efforts are tor of innovations,” in the words of current president Prof. being made from the government’s side: the budget dedicated Luciano Maiani. The last restructuring carried out in 2003 to research increased to 2.5 percent in 2008, following years gave birth to “a network of 108 connected institutes spread of steady decline. Therefore, CNR is able to start new recruit- over the territory, and organized in 11 departments.” CNR ment processes and wishes to offer interesting perspectives to currently has 38 spin-offs, three of which in the pharma- young Italians willing to invest in Italy.” ceutical sector. Its role “is to act as a facilitator, connecting Looking at governmental efforts to conciliate cost-con- public and private and creating bridges between the main tainment and innovation, Director of Farmindustria Enrica stakeholders,” he says, offering a gateway to Italian brains Giorgetti identifi es three main measures. “First of all, the for local and international laboratories. implementation of a tax credit for research that can go up Multinational corporations (MNCs) themselves are well to 40 percent for partnerships, with a sealed amount of aware of the opportunities arising from the country’s re- euros 50 million.” In addition, the “Accordi di program- search. French laboratory Servier did not casually choose ma” Plan “with 61 innovative projects in the pipeline for Rome as home to one of the group’s 19 International Cen- a total amount of over €1 billion.” And the last measure, ters for Therapeutic Research (ICTR), instrumental in per- raising expectations of the whole industry is the Industria forming clinical research. General Manager Frederic Fasano 2015 initiative, which plans the allocation of €150 million. backs up this choice: not only does the country offer con- Claudio Cavazza, founder and president of Italian labora- siderable market opportunities, but in addition “the weight tory Sigma Tau, has been appointed general manager of of the Italian scientifi c community is growing, in terms of Industria 2015’s dedicated life-sciences program “New research activities, as well as in scientifi c and political infl u- Technologies for Life” (“Nuove Tecnologie per la Vita”), ence,” he explains. “In some specifi c fi elds, the network’s and recently declared that the only option to cope with the organization and the high frequency of territorial struc- current healthcare crisis would be to bet on genomics and tures enable to perform highly specialized and sometimes personalized medicines. However, due to the costs involved lives-saving procedures.” Such a concentration of centers of by such products “developing innovative medicines now re- excellence is a main asset for this medium-size player that quires pan-European research collaboration of public-pri- proved its ability to compete with giants thanks to a steady vate interaction.” and consistent focus on a few therapeutic areas- mostly Not only is Italy in constant need for young talent and cardiology, diabetes, hypertension and osteoporosis—and government incentives, it is also craving to attract more strong partnerships with the scientifi c community. business angels and venture capital, especially to support On the other hand, Fasano deplores the insignifi cance of translational research in the biotech fi eld. Leonardo Vin- government incentives to companies promoting and fi nancing research. “As public projects are strongly based on cost-containment ap- proaches and poorly considering innovation, the industry really has to perform research on its own.” For this reason, even though “the attractiveness of Italy is made of its well-trained researchers,” most of them tend to expatriate to more rewarding countries. Theoretical physicist Prof. Luci- ano Maiani agrees, and points out a challenging recruitment situation. Most Italians are lured by more at- tractive conditions offered in other countries—including less mature markets such as Eastern Europe— and those who come back often do LEFT: Luciano Maiani, President of CNR; RIGHT: Leonardo Vingiani, Assobiotec S3 FOCUS REPORTS AUGUST 2009 SPONSORED SUPPLEMENT Italy Report NUMBER OF BIOTECH COMPANIES IN ITALY: tal.” Thus, many are the opportunities for special- DEVELOPMENT OVER TIME ized investors in well-established markets—namely 260 US, Canada, UK, Germany, and France—currently lacking good projects to fi nance. “The Italian en- 211 vironment offers a very good cost-effectiveness ra- tio,” reminds Vingiani. “Italian researchers earn less than in Northern Europe and US,” which 140 makes Italy a safe, profi table bet. Overall, be it because the Italian bio-tech seg- 101 ment is still young, with more than 50 percent of 71 companies created in the last 10 years, or because 49 of brain drain and weak state support, Italian en- 36 trepreneurs still fi nd it hard to translate knowledge into business, and convert excellent research into BEFORE 1981- 1986- 1991- 1996- 2001- 2005- sustainable companies. But even though public- 1980 1985 1990 1996 2000 2004 2008 private partnerships (PPPs) are not yet widely rec- ognized as a best practice by Italian healthcare op- erators in order to open a way forward for Italian giani, director of the biotech companies’ association As- research, Giorgetti sees encouraging signs. She has already sobiotec estimates that “Italy’s fi nancial schemes include noticed that “more and more agreements are passed be- some really good investors for traditional technologies, but tween small companies (mainly specialized in biotech) and regarding innovative technologies there has not been an ef- public institutions like universities, public research centers, fi cient strategy to foster innovation and get fi nancial capi- the Superior Institute for Health (ISS), and the CNR.” CNR is indeed supporting the creation of business proj- ects at regional level. Recently, it signed an agreement with the Lombardia Region, providing €40 million over three years for a myriad of projects, some of them based on nano- technologies. If it proves successful, similar initiatives will follow in Italy’s south, as the country gradually devolves power to regional and local administrations. FROM RESURGENCE TO DIVERGENCE: ONE COUNTRY, 20 HEALTHCARE CITY-STATES he Italian Peninsula was unifi ed amidst much strug- Tgle in the 19th and 20th centuries—in theory putting an end to the territory’s historical fragmentation and the leadership of local kings on a changing number of inde- pendent and powerful city-states. Nevertheless, it is still suffering from a historical tendency towards competition between small towns and a lack of inter-regional solidar- ity. Italy is now almost a textbook case of the regionaliza- tion process at work all over Europe: the constitutional reform of 2001 and the political trend of administrative federalism gave the peninsula’s 20 regions a signifi cant level of autonomy. As a result, very few investment ini- tiatives are launched at national level, a main point of differentiation of the Italian system. Local clusters become global players Most federal states claim that a decentralized structure is S5 FOCUS REPORTS AUGUST 2009 SPONSORED SUPPLEMENT Italy Report cus on the specifi c fi eld of orphan diseases, TLS will have the chance to really all the potential of the Tuscany region,” proudly boasts Carganico. Because of its integrated offer to biotech laboratories and its abil- ity to attract investment in Tuscany, the Park has been appointed by the Ministry of Health as responsible for the management of technology transfer projects fi nanced or co-fi nanced by the Tuscany region. There- fore, “the foundation will soon start tak- Toscana Life Sciences park in Siena ing part in the regional fi nancing processes, directly working with the Tuscany authori- the best way to create a healthy competition between regions ties—bringing its knowledge to the bureaucrats, and on the and local incentives for R&D.