Indeed, despite its small size, Switzerland holds a high place in innovation rankings, with a strong life sciences sector based around three hubs: Zug/Zurich, Basel and Lausanne/Geneva. According to the World Economic Forum (WEF), Switzerland ranks fifth, despite being the world leader when it comes to skills, with the most extensive and highest quality staff training as well as the highest skill set for graduates. Switzerland ranks first when it comes to international co-inventions, and third at R&D expenditure per capita. In 2019, for the ninth year running the country came first in the Global Innovation Index published by Cornell University, INSEAD and WIPO.

In 2018, the Swiss pharmaceutical market represented some CHF6bn, while pharmaceutical exports reached some CHF88.4bn, representing 29% of all Swiss exports. Europe still represents the main export and import market for Swiss pharma, although the USA and other markets are growing. The productivity of the Swiss pharma sector is seven times higher than that of the global economy. Approximately 40% of the capital of European life sciences companies is traded on the SIX Swiss exchange – a reflection of Switzerland’s historical ties with the sector. Switzerland also has a thriving medtech arena and a growing activity in e-health and big data for healthcare.

Among the top five big pharma companies, Novartis and Roche both originated and are headquartered in Switzerland. With an increasing focus on personalised healthcare, Roche can claim to have built the highest building in Switzerland, in Basel, as well as a leading franchise in oncology. The FDA has just granted Roche emergency use authorisation (EUA) for its new test to detect the virus that causes the coronavirus. This test emerges from Roche’s diagnostics division, also headquartered in Switzerland. Novartis, also based in Basel, is one of the largest pharmaceutical companies by both market capitalisation and sales. Also increasingly focused on personalised medicine, Novartis has been expanding its network of production sites in Europe, including a CHF90m investment in Switzerland to build an ultramodern production site for innovative cell and gene therapies in Stein (AG) such as Kymria. Novartis is investing in artificial intelligence, in alliance with Microsoft, to improve processes, drug design and manufacturing.

Many international pharma and biotech companies have also invested in Switzerland, as it offers flexible labour laws, a stable economic environment and a highly qualified workforce. When Merck acquired Serono, the company also acquired several manufacturing facilities in the canton of Vaud. Celgene, now a subsidiary of Bristol-Myers Squibb (BMS), recently built its second production plant in Couvet, followed by the construction of a third production site in Boudry (Neuchâtel), to produce oral treatments to treat patients with inflammatory bowel diseases. American oncology specialist Incyte invested $100m for a monoclonal antibody production site in Yverdon (Vaud). UCB has also invested some $300m for a biotech production plant for Cimzia in the canton of Fribourg. CSL Behring will inaugurate its facility with two new production lines in 2021 in the canton of Bern.

Beyond the two big pharma players whose headquarters sit in Basel, other companies have also settled their European headquarters or offices in Switzerland. The country is thus home to AbbVie, Allergan, Amgen, AstraZeneca, Bayer, Biogen, Boehringer Ingelheim, Eli Lilly, Gilead, GlaxoSmithKline, Janssen, Lundbeck, MSD (Merck Sharp & Dohme), Pfizer, Sanofi and Takeda among others.

In 2019, Switzerland also filed a record number of patent applications per capita overall. For the first time, there were almost 1,000 applications (988) per million inhabitants. Furthermore, Switzerland has a share of 1.3% of the global biotech patent portfolio accounting for 4% of the global portfolio value. A particular strength of Swiss biotech is the field of antibodies and cytokines, and Swiss inventors have been involved in the initial phase of emerging technologies, such as probiotics, CAR cells (cells engineered to display chimeric antigen receptors) and genome editing (ie, CRISPR/Cas, TALEN, ZNF).

A partial revision to the Swiss Patents Act and its implementing provisions came into force on 1 January 2019, together with an ordinary revision of the Therapeutic Products Act. The partial revision introduced the removal of restrictions to free choice of medical treatment, which was the result of a change in case law by the European Patent Office’s Enlarged Board of Appeal. In addition, the prescription of medicines by medical personnel in individual cases and the individual preparation of medicines in pharmacies were excluded from the effect of a patent. Secondly, the revised Patents Act encourages the development of safe medicinal products for paediatric use. To counter the lack of medicines specifically for children, it now provides for a six-month extension to protection for pharmaceutical manufacturers as compensation for carrying out paediatric studies for medicinal products. This extended patent protection can be obtained via either a paediatric extension to a supplementary protection certificate or via the paediatric protection certificate.

One of the world’s leading biotech hubs, Switzerland provides over 50,000 jobs in the sector and, together with the pharmaceutical and chemical industries, contributes to more than 40% of the Swiss exports. Over 1,000 biotech start-ups work in fields ranging from orthopaedics or dermatology, through to antibodies, oncology, neurology and more. The main struggle for these start-ups is access to sufficient venture capital, with much larger deals happening elsewhere. Nevertheless, last year several biotech start-ups were able to close large financing rounds, for example Polyneuron Pharmaceuticals (CHF22.5m), Bioversys (CHF16m) and Versantis (CHF16m).

And yet the acquisition flow demonstrates that Swiss biotechs are attractive. For example, over the last five years, Lundbeck acquired Prexton Therapeutics, Agilent acquired Genohm and Boehringer Ingelheim acquired Amal Therapeutics, focused on cancer immunotherapy and therapeutic cancer vaccines. Swiss companies like Idorsia, created by the founders of Actelion (acquired by Johnson & Johnson), and ObsEva, created by the founder of PregLem (acquired by Rechter Gedeon), are growing, with several drugs in their pipelines.

Switzerland is also home to all the major IT companies and both pharma and biotechs are looking at how AI and big data can help drug discovery, improve drug design, help patients and improve processes. Ranked among the ‘50 Smartest Companies’ in the world according to the MIT Technology Review, Sophia Genetics combines deep expertise in life sciences, medical disciplines and mathematical modelling, The company has been using artificial intelligence for the past eight years to help detect certain diseases such as cancer. Currently, 1,000 hospitals in some 80 countries use its platform, and the number of patients diagnosed using this tool were nearing the 500,000 mark at the end of 2019.

MindMaze, the Swiss start-up which entered the unicorn club in 2016, works at the intersection of neuroscience, mixed reality and artificial intelligence and builds intuitive human machine interfaces for different uses, including neurorehabilitation.

COVID-19, which has affected the whole world and global economies, will no doubt have an effect on the biotech start-ups based in Switzerland, notably those without enough liquidity. The pandemic is affecting stock exchanges and workplaces throughout the world; health systems are being stretched and their weaknesses exposed, and Switzerland is no exception. The repeated moves to reduce medicine prices in the country and the rising expenses in healthcare will combine to put even more pressure on the pharma and biotech sectors to innovate while maintaining affordable prices. In addition, like other countries, Switzerland must continue to combat counterfeit drugs, which arrive online or through other means. Finally, Switzerland will need to safeguard its value added to the entire value chain to remain competitive in the global life sciences market in the future.

Danièle Castle is the Owner of Genevensis Healthcare Communications