GLOBAL BUSINESS CONFIDENCE REPORT 4th Qtr. 2019 B IOTECH NOLOGY STARTUPS RESEARCH REPORT 4th Quarter 2019 www.tradecouncil.org www.qibcertification.org International Trade Council www.tradecouncil.org www.goglobalawards.org Page 1 MARKET OVERVIEW REPORT FOR ENTERPRISE ESTONIA Table of Contents Overview ........................................................................................................................................................................... 3 Industry Definition .......................................................................................................................................................................................... 3 Sectoral Definitions ........................................................................................................................................................................................ 3 Main Activities .................................................................................................................................................................................................. 4 Associated Industries ..................................................................................................................................................................................... 4 Industry at a Glance ......................................................................................................................................................... 5 Industry Overview ........................................................................................................................................................................................... 5 Industry Statistics ............................................................................................................................................................................................ 5 Key Trends .......................................................................................................................................................................................................... 5 Industry Outlook .............................................................................................................................................................................................. 5 Products & Markets ......................................................................................................................................................... 6 Demand Determinants .................................................................................................................................................................................. 6 Major Markets .................................................................................................................................................................................................. 7 Supply Chain ..................................................................................................................................................................................................... 8 Competitive Landscape ................................................................................................................................................... 9 Market Share Concentration ....................................................................................................................................................................... 9 Geographical Concentration ....................................................................................................................................................................... 9 Barriers to Entry ............................................................................................................................................................................................... 9 Consumer and Occupational Safety ...................................................................................................................................................... 10 Industry SWOT Analysis .............................................................................................................................................................................. 11 Reasons why BioTech Companies May Fail ........................................................................................................................................ 11 Financing of BioTech Firms ......................................................................................................................................... 13 Fund-Raising Over Time ............................................................................................................................................................................. 13 Investors ............................................................................................................................................................................................................ 14 Major Players ................................................................................................................................................................. 27 Early Stage BioTech Companies .............................................................................................................................................................. 27 National & International Industry Associations ................................................................................................................................ 35 Regional Industry Associations ................................................................................................................................................................ 37 Industry Trade Shows .................................................................................................................................................................................. 47 This custom research report was produced for ITC member – Enterprise Estonia. International Trade Council www.tradecouncil.org Page 2 MARKET OVERVIEW REPORT FOR ENTERPRISE ESTONIA Overview Industry Definition The Biotechnology Innovation Organization, or BIO, the largest biotechnology industry organization in the United States, subdivides biotechnology into five areas1: • agricultural feedstock and chemicals • drugs and pharmaceuticals • medical devices and equipment • research, testing and medical laboratories • bioscience-related distribution. Within the biotechnology sector, the life science industry includes the drug and pharmaceutical, and medical devices and equipment sectors of the biotechnology industry, and the pharmaceutical industry2. The North American Industry Classification System (NAICS) defines life science employment within the following categories: pharmaceutical manufacturing; research and development (R&D) in biotechnology; R&D in life sciences; analytical laboratory instrument manufacturing; and medical testing laboratories3. Sectoral Definitions Early stage biotech start-ups No customers, employees or actual product needed; however there must be legitimate ideas for a tangible product of products based on a well-defined ‘pre-product’ and its associated IP. Here the pre-product could be a well studied and understood biomacromolecule of clinical relevance and the IP can include (but not limited to) industrial secrets, patents and expertise of key team members. Importantly, one must be able to at least theoretically bridge the pre- product with a product and its associated market. Further, an early stage startup is likely to have been in some form of existence for within ~3 years and has developed from a combination of government grants, funds from winning competitions (i.e. pitching comps), crowdfunding, potentially angel investors, and possibly small venture capital funding (if very lucky; this is quite rare and the investment is usually going to be around $500 000). Some may also call this the ‘seed’ stage which occurs before the early stage technically, and I would put the demarcation at if you have significant funding yet or not. Finally, it is quite normal for this stage to be cash-flow negative. Mid-stage biotech startups This is the growth phase of the company, where a well-defined market/s has been identified and one has moved past an initial prototype for the product. This is the stage where there will be employees (often on short-term contracts based on what you can afford), but not necessarily end-user customers (i.e. a patient). Here the customer focus is on larger, more well-established companies you would be looking to either partner with, sell your IP to or licensing your product to. Funding at this point will usually be from angel investors, venture capitalists (with the funds here increasing into the millions of dollars), and sometimes industry funding. The cash flow at this point would ideally be positive or neutral, though it may still be negative depending on the additional R&D expenditures required or investment in materials etc. This is the point of a company where equity will be given serious consideration. 1 Andres, G. (2017). Bioscience Innovation in the States: Legislation and Job Creation Through Public-Private Partnerships [Report]. 2 Anderson, P.L., Watkins, S.D. (2004). The Life Sciences Industry in Michigan: Employment, Economic and Fiscal Contributions to the State’s Economy. 3 Steele, E. (2017, August). Massachusetts Biotechnology Council Industry Snapshot 2017. International