In this section we will take you on a tour of Medicon Valley. We will introduce you to its companies, institutes and universities detailing their strengths and specialities - plus all the latest recruitment opportunities.

Nature featured the Medicon Valley in September 1999 (1). Below we reprint the article written by Brendan Horten. Please note that the new managing director of Medicon Valley Academy is Peter Halken.

Medicon Valley: A bridge to collaboration

Medicon Valley is hoping to follow the successful lead of the technology boom towns. Deriving its name from Silicon Valley, this region owes its existence as an economic zone to the building of a bridge across the Øresund Sound scheduled to open in 2000 which will link Copenhagen in Denmark to the city of MalmÖ in the south of Sweden. The intent is to capitalise on the region's strength in healthcare, pharmaceuticals, biotechnology and life science research, says Jes Østergaard, managing director of the Medicon Valley Academy.

The platform of many technological regions is the strength and abundance of university research. Medicon Valley has Lund University (Sweden's largest) and the University of Copenhagen, as well as the Technical University of Denmark, the Copenhagen Business School of Pharmacy and MalmÖ University. Moreover, 50–60 per cent of the pharmaceutical and biotech companies in Scandinavia reside in the valley, as well as a fair number of the medical device companies, according to Medicon Valley literature (see table).

The region offers clinical-trial services and medical collaborations through its large university hospitals and other regional hospitals. There are also private and government research institutes, such as the John F. Kennedy Institute for neurology and genetics, the Hagedorn Institute for Diabetes and Molecular Endocrinology, the Wallenberg Neuroscience Centre (with a new gene therapy division) and the Danish Cancer Society's Cancer Epidemiology Centre.

The Academy

The Medicon Valley Academy was created to further the relationship between the universities, industry, hospitals and life-science-based companies in the area. It was established more than a year ago by six of the area's major universities with offices on either side of the sound in Copenhagen and Lund.

As Østergaard puts it:

“We assist with the development of collaboration by adding infrastructure and networking with projects. And we are building a database of information about research and knowledge in the area and making it visible and more accessible to those in the region and those outside.”

The Medicon Valley Academy was created to further the relationship between the universities, industry, hospitals and life-science-based companies in the area. It was established more than a year ago by six of the area's major universities with offices on either side of the sound in Copenhagen and Lund.

As Østergaard puts it:

“We assist with the development of collaboration by adding infrastructure and networking with projects. And we are building a database of information about research and knowledge in the area and making it visible and more accessible to those in the region and those outside“.

Operating across the Danish / Swedish border has the added benefit that the academy can draw on money from local universities, which have contributed $1.5 million, and from the European Union, which has contributed $750,000. This money, while modest, is meant to catalyse the formation of the network, says Østergaard. The academy does not pay people to carry out projects, he says:

“We bring people together who have interest in the end goal and facilitate a project's completion.“

Valley Vistas

Two new research centres are opening in the valley with investments totalling $125 million each, according to the academy. Already open is a biomedicine centre at Lund University. The biotechnology centre at the University of Copenhagen has yet to break ground.

The centre in Copenhagen will be located at the main university hospital, says Østergaard, and will house a collection of laboratories and offices for small- and medium-sized biotech companies, university researchers and hospital staff.

Financing is obviously an important part of the equation for small start-ups and companies building on licensed or proprietary technology. There are many privately held business funds and financing institutions in the Medicon Valley. There is public debt financing through low-interest loans, or business development finance, which provides a low-risk environment in which the loans are only paid back if the venture is successful. In the event that the venture is abandoned, the loan is exchanged for the rights to the project, and business development finance simply writes it off. This public funding is also available for foreign companies doing business in the region. According to the academy, business development finance has provided capital for 110 projects in the medical sector, guaranteeing up to 45 per cent of the total development cost to a maximum of $7 million.

High Capacity

For San Diego-based Structural Bioinformatics, the presence of Copenhagen Capacity was a big reason for opening a subsidiary in HØrsholm, adjacent to the Technical University of Denmark. Copenhagen Capacity aims to provide services and information to foreign companies, considering greater Copenhagen as a possible location for activities. According to Susan Burgess, Structural Bioinformatics' vice-president of corporate development, Copenhagen Capacity helped by introducing the company to investors and providing guidance and counselling.

“Our last round of investment was largely through several Danish funds. We also got debt financing through the Danish government,“

Structural Bioinformatics' Danish subsidiary now has six full-time employees, and works with three faculty members from the Technical University of Denmark, who act as scientific advisers to the parent company and as strategic and technical directors to the subsidiary. It was Copenhagen Capacity that introduced Structural Bioinformatics to Jakob Bohr, one of the Danish scientists with whom they are now working. As it happened, Bohr and his brother had some interesting technology that was applicable to protein folding. This was a good fit with the company's core technology, which is based on three-dimensional structure modelling and protein structure-based algorithms used in drug discovery.

Medicon Valley : The Scandinavian Biotech Centre

Denmark and Sweden have a long-standing tradition for biotechnology, medical technology and pharmaceutical research. They are, respectively, the third and fifth largest exporters of pharmaceuticals per capita in the world. These two countries also have the highest R&D expenditure per capita in the European pharmaceutical industry, surpassed only by Switzerland. More than 60% of Scandinavia's pharmaceutical and biotechnological activities are situated in the flagship Danish-Swedish cross-border Øresund region of Medicon Valley.

What makes Medicon Valley a biotech hot spot?

The driving forces behind Medicon Valley's lead position in biotechnological and pharmaceutical development are companies such as AstraZeneca, Novo Nordisk, Pharmacia-Upjohn, H. Lundbeck, Ferring and Leo Pharmaceuticals. These companies, together with dedicated investors and high-class research, have paved the way for new biotech start-ups such as NeuroSearch, Bavarian Nordic, M&E Biotech and Biora. Lund University, Copenhagen University and the Technical University of Denmark are among the region's main research institutions, and there is a total of 120,000 students in the region's universities. An independent scientific output survey at D'ARC (DTU Analysis & Promotion Centre) has recently ranked Medicon Valley's biomedical research third in Europe (after London and Paris). Based on published articles on health, technology and natural sciences, the study also concluded that Medicon Valley is the fifth-ranking scientific centre in Europe, and is particularly strong in allergy, endocrinology / metabolism, physiology and orthopaedics. Medicon Valley's geographical position as an important cross-border biotechnological centre will be advantageous for future development. The completion of the permanent link between Copenhagen in Denmark and Skåne in southern Sweden in July 2000 will bring the two parts of the region even closer to each other.

Where and what is Medicon Valley?

The famous Silicon Valley inspired scientists, industrialists and politician's in Denmark and Sweden to launch the Medicon Valley project three years ago. Medicon Valley incorporates the Copenhagen region in Denmark and Skåne in southern Sweden, and has a population of about 3.2 million people, including a highly qualified labour force. The cross-border partnership between industry, hospitals and academic institutions is backed by the Medicon Valley Academy, which also acts as a facilitator for extended co-operation between companies, hospitals and research institutions, to secure the development of new technologies and competencies in the region. Copenhagen Capacity and Region Skåne are the Danish-Swedish organisations working to promote the region internationally and to attract foreign biotech companies, such as Acadia Pharmaceuticals, Phytera, Structural Bioinformatics, Oxigene, Medarex and ISIS Pharmaceuticals. For foreign companies in Medicon Valley, at least three factors are significant:

  • 01. The ability to tap into the scientific environment and the region's health-care infrastructure

  • 02. Access to the region's highly qualified researchers and an efficient and productive labour force

  • 03. Dedicated support for new activities from local investors.

In this context, the favourable opportunities for financing from organisations like Business Development Finance, set up in 1992 by the Danish Ministry of Business and Industry to offer companies financing and risk-sharing, has had a significant role.

Attractive Location

More than 30,000 people in Medicon Valley work in the medical industry, including 4,000 researchers with an academic background. The concentration of research and know-how is a result of substantial government grants to universities and hospitals and of major private industry research programmes. In Denmark alone, public-sector biotechnology research will receive US$ 60 million over the next two years. It is estimated by the Danish Ministry of Information and Technology that the Danish private sector spends app. 20% of its total research budget on biotechnology in Denmark. Research institutes have also provided additional financing. On top of standard university funding, more than US$160 million has been invested in special biotechnological research programmes in the past ten years. There are two large biotechnology centres at universities, it is Biotech Research and Innovation Centre in Copenhagen and Biomedical Centre in Lund, each worth around US$125 million.

Ample Funding Opportunities

“Medicon Valley has a lot to offer biotechnological companies. It is a region with a high standard of education, where research and especially clinical testing are inexpensive compared to the USA. Moreover, there is ample capital for biotechnology projects“ says Florian SchÖnharting, head of health care and corporate development at BankInvest, one of Medicon Valley's leading venture companies for biotechnology.

SchÖnharting believes that the capital opportunities offered in Medicon Valley are different from the United States, where there are lots of very big US private biotech investors. In Medicon Valley, most private biotechnology investments are backed by major institutional investors who are not specialists in this field. In many ways they are “dream investors“ because they think long-term and normally add to their investment if things go well.

Genmab: We got the very best set-up here!

“In my capacity as head business developer for Medarex, New Jersey, USA, I've looked into a wide variety of biotech/medical environments around the world and our new set-up in Denmark stands out as one of the very best. The biomedical infrastructure in the region is completely solid - with excellent universities, hospitals and researchers - and the investment community is highly supportive“ says Dr Lisa N. Drakeman, chief executive officer of Genmab and senior vice president of Medarex.

Medarex was founded in New Jersey in 1987, and is represented in Europe (Medarex Europe BV in the Netherlands). It employs around 100 people world-wide, and also owns GenPharm in California. Drakeman became interested in biotechnology at a “biopartnering“ conference in Copenhagen in 1995. Medarex subsequently made contacts with local investors, resulting in the establishment of a new joint venture, Genmab A/S, in the spring. The company has received US$ 7 million from BankInvest, Dansk Erhvervsfinansiering and other local investors.

“This joint venture combines Medarex's groundbreaking drug-development technology with Denmark's rich biomedical resources and investment capital. As a result, we have a very powerful platform for rapid drug development“ says Drakeman.

According to Drakeman, Medicon Valley's abundance of qualified medical professionals available to conduct clinical trials makes the country very attractive to biotech companies. Elsewhere, hospitals and clinics can often be involved in multiple projects with competing drug developers. In Medicon Valley, one of the lowest-cost, highest-quality development environments in the world, the health-care system has ample capacity to meet the clinical needs of the biotech industry.

SBI: Danish scientists open doors all over Europe

SBI (Structural Bioinformatics Inc.) is a world-leader in computer-based protein analysis. Founded in 1996 in San Diego, the company has developed a range of proprietary technologies for identifying and designing drug candidates based on genetic sequence information. SBI has an active marketing and sales division, providing services to European database clients and seeking new partnerships with international pharmaceutical companies. Two years ago, SBI established a subsidiary (SBI-AT) in collaboration with a team of scientists from the Technical University of Denmark, to use advanced information theories and algorithms developed at the university to enhance SBI's structural prediction tools. Partial funding for the new company was provided by Business Development Finance and a group of local venture companies.

Why Medicon Valley?

“SBI's venture into Denmark has been an unqualified success. The new computational methods have been shown to yield substantial improvements to the process of identifying lead compounds. Furthermore, SBI's partners from the Technical University of Denmark have provided a network within the European scientific community that would have been very hard to establish alone. They have also lent a high degree of credibility to the company, which is essential in a field like bioinformatics where client confidence is the most important success factor“says Dr Susan K. Burgess, Chairman of Structural Bioinformatics AT.

“At SBI, we had always planned to establish a European base, but we didn't find the right conditions until we came to Denmark. The first thing that caught our eye was some research that was being done at the university here. There was enormous commercial potential in the work and we're now realising that potential, in collaboration with our Danish colleagues. Today, we're at the very forefront of the global bioinformatics market and our work in Denmark has contributed significantly to this strength - both in terms of scientific advancement and international reach“ continues Burgess.

It naturally played a great role that the local investors were so positive. In the first round of financing, ACADIA generated an initial investment of US$ 13.5 million from Danish sources. In addition to a loan of US$ 7 million from the Danish Business Development Finance Agency, a consortium of private Danish institutional investors provided US$6.5 million in equity capital.

“These private investors invested an additional US$3 million in equity capital later in 1997. In 1998, ACADIA raised an additional US$ 10.7 million in equity capital from local and other European investors through a private placement. With these and other investment funds, ACADIA Pharmaceuticals is solidly positioned for growth in Denmark's thriving biotech community“ Brann states.

“Our Medicon Valley location was envisioned as a state-of-the-art chemistry laboratory to complete the pharmacological research conducted in the San Diego laboratories. The Copenhagen facility currently employs 25 people engaged in medicinal, computational and analytical chemistry research, with over 13,000 square feet of laboratories and office space. The research conducted in both the Danish and US facilities is essential to the success of ACADIA's programmes. The chemistry group in Denmark works closely with the pharmacology group in the US to design and synthesise chemical compounds with therapeutic activity“ says Brann.

ACADIA Pharmaceuticals:

“It is striking to note the great enthusiasm in biotechnology in Copenhagen, and the massive concentration of world-class research institutions makes it easy to recruit good people. When ACADIA located in Medicon Valley in 1997 we were also encouraged by the excellent financing opportunities we found here. For these and other reasons, it wasn't that big a leap for us to settle in Denmark. We're now firmly established in San Diego and Copenhagen - two of the most active and prosperous medical / pharmaceutical communities in the world“ says Dr Mark R. Brann, founder, president and chief scientific officer of ACADIA Pharmaceuticals.

The presence of foreign organisations and newly established home grown companies such as Heme Biotech, BioImage, Zealand Pharmaceuticals, Display Systems Biotech, Pantheco and Profound Pharmaceuticals has been a major contributing factor in the continued development of the Medicon Valley as a major biotechnology centre.

1. Horton, B. Medicon Valley: a bridge to collaboration Nature 395, 412-413 ('99).

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