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“About seven per cent of European life science investment capital is pumped into Belgian companies, but the country accounts for 16 per cent of sales”

A company that wants to grow logically looks beyond national borders. But how do you roll out a global market strategy? What about intellectual property (IP)? And what role can acquisition or M&As play in those growth plans?

A panel of specialists and experts by experience, brought together by Health Campus Limburg during the 42nd JP Morgan Healthcare Conference in San Francisco, is considering the answers to these questions.

Because Belgium is a country without any significant raw materials, its economy must rely mainly on its human capital. Thanks to strong education and research institutions, that brainpower is efficiently capitalised, so that today our country is known for its knowledge economy and ecosystem of knowledge clusters. But does it also constitute a suitable base for companies with international ambitions? A tailor-made question from Ann Beliën, founder and CEO of Rejuvenate Biomed, specialising in solutions for age-related diseases. She managed to grow the company from start-up to international business over the past six years. Its headquarters are in Belgium until further notice.

Excellent reputation
“Because I had over two decades of experience at Johnson & Johnson, which backed me in this project, there was an international and even global focus from day one. For example, in our recruitment policy: one of the first employees came from the National Institute of Aging in the US, with whom they also set up a collaboration. In the clinical phase we are now in, we mainly benefit from strong Belgian qualities: setting up clinical trials quickly, finding the right suppliers, and so on. In addition, we continued and continue to seek external, international partners, for example around an AI-enabled platform. That we managed to attract that partner to our country says a lot about Belgium’s excellent reputation in life science and healthcare.”

“An additional advantage is that, as a small country, we are close to the Netherlands, Germany, and France. So, we naturally form a hub to which it is easier to attract international talent, while at the same time these small-scale forces must have an external, international focus.”

Bringing in expertise
Belgium is an attractive country for foreign expertise, but can we then also say that foreign companies are looking at companies in our country with great interest? In 2022, IPA (Immunoprecise Antibodies, ed.), which specialises in immunology and biotechnology, bought Belgium’s Biostrand. CEO Jennifer Bath explains the choice.

“IPA works as a research organisation for 19 of the world’s 20 largest pharmaceutical companies, together accounting for around 600 clients. Our main ambition is customisation based on the specific needs of each client. That means we need very specific expertise. Acquisitions are a very effective way to bring in that expertise.”

“Very specifically, in the case of Biostrand, it was about software: we saw artificial intelligence and machine learning emerging about five years ago, but the companies that were working on it did not do so radically enough: they were rather small, incremental technological improvements, which would not solve our complex challenges. Of the five European s bioinformatics companies that qualified for acquisition, Biostrand was hands down the most impressive: their coding and software was so much more than an application to develop new drugs, but a way to harmonise multimodal data – multi-omics, structural data, sequence data, literature … – as well as analyse it almost instantly within a single framework. Today, some of our pharmaceutical companies are already using it, and in the next 12 months we want to roll it out as a SaaS solution for our partners, customers, and the public.’

Partly out of necessity
Does that make Belgium an ideal country for M&As in the life science and healthcare domain? A question that Briton Robert Darwin takes credit for. He is a specialist in private capital and M&A at law firm Sidley Austin LLP, which focuses on large international transactions.

“I think Belgium can be called an innovation generator in the above areas,” he replies. “As a patriotic Brit, I am first and foremost a big believer in our own life science ecosystem, but I note that Belgium – partly out of necessity, as the country can never win out in terms of scale – is making huge efforts to punch above its weight in life science and is succeeding. The figures prove that: about seven per cent of European life science investment capital is pumped into Belgian companies, but the country accounts for 16 per cent of sales. So that is more than double, and mainly due to the model of universities and innovation clusters, and of a government that supports the sector.”

“An additional advantage is the knowledge around regulations and laws that is concentrated there, because just about all the European institutions are based in Brussels. If they incubate those regulations in the companies locally, that knowledge spreads much more easily in the sector.”

Another of Belgium’s assets is its system of R&D tax breaks and tax incentives for innovative companies, which has given the life science industry a huge boost. “The big life science companies in Belgium have a tax rate of barely five per cent – some even get money back,” explains Jonas Derycke, partner at financial, legal, tax consultant Van Havermaet. “But for start-ups and scale-ups, the main objective is of course to maximise R&D spending subsidies based on government loans and R&D tax breaks. Government loans for fundamental research can reach 60 per cent in Belgium, or even 70 per cent if there is international cooperation. The ambition is to eventually go up to 100 per cent – ambitious, but not impossible. In terms of R&D tax benefits, Belgium is in the international lead on R&D tax credits and tax credits, among other things. In that mix of government loans and R&D tax breaks, our country is really top-of-mind. And I like to stress that from a strategic perspective, it is important to know that those two levers can be combined, which far from all entrepreneurs know.”

Rejuvenate Biomed made grateful use of those levers. “That was a blessing for our company because it gave us the time and resources to do a lot more basic research and exploration,” CEO Ann Beliën explains. “Investors are not always interested in that, because they want to move fast, whereas for us as a company it just allows more serendipity. On the other hand, it’s just interesting for those investors, because it not only validates your company, but also adds resources and knowledge.”

Protection of innovative products
One thing that has not yet come up in this internationalisation story is intellectual property, the protection of patents and how that can even – from a tax perspective – give companies an advantage. Specialist in that matter is Youri De Groote of patent and trademark office Arnold & Sietsma, who gets back to the notion of Belgium as a knowledge economy. “That means a lot of innovative products and patents that need to be protected. You should know that the tax benefits on income generated from technologically innovative products are calculated on their patents. However, we see a shift in that from revenues to costs, which is a beneficial evolution for biotech, because those companies usually don’t generate much revenue in the first years.

Patents also show another nice piece of Belgian mentality: quality over quality, not necessarily striving for a hundred patents, but for that one good, core innovation that makes the difference and turns one euro into a hundred euros. Innovation that must be perfectly protected, because venture investors naturally want the company, they invest in to be able to keep doing what it is already doing.”

One of the most helpful countries
“IP naturally determines the value of your company to a large extent,” Ann Beliën adds. “This is why we took a thorough look at our international strategy with IP lawyers: not only in terms of rollout – Europe first, then the US and other countries – but also our products in the experimental phase. For example, we fleshed out the patent for a particular drug as broadly as possible, so that it would be applicable to multiple diseases. That proved quite easy in Belgium, unlike in the US, for example.”

IPA was also already making grateful use of IP protection. CEO Jennifer Bath: “I can honestly say that Belgium is one of the leading and most helpful countries worldwide when it comes to IP tax credits and grants. When we acquired Biostrand, we worked to protect all the original ideas that went into the coding and development of the software. Because this also gave us the great benefit of a significant tax rebate on the revenue we generated worldwide.”

Big boys are coming quickly
“People sometimes forget that software is not only protected by copyright, but can also be patented,” Youri De Groote adds. “If you work on a version 1.2, it is automatically patented as well. Especially if you start working with Software-as-a-Service, this can be hugely advantageous financially.”

Whether we need more IP protection and policy around security to become attractive as a company or region, the concluding question reads. And if so, how do you approach such a thing? “Like a marathon, not a sprint,” Youri De Groote replies. “Think of it as non-stop homework to get your finances and investments in order, not as something you do because your VC asks you to. The only problem is that scientists are often not commercially minded: they don’t think in terms of products to be sold. But of course they must, and when they do, you need patents. And once you have those, you will see that the big boys will come running quickly.”


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