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The pandemic does not stop biotech in Italy

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At the end of 2020 there were 721 biotech companies active in Italy: this is what emerges from the annual report Assobiotec-Federchimica and ENEA “Biotechnology companies in Italy. Facts & Figures – Economic update 2021 ” [1] which shows a growth trend in the sector for the main economic variables, albeit at lower rates than those recorded up to 2016. Only the data on the total turnover of companies (over 11 billion euros) shows a slight retreat in 2019 over 2018 , although neither the operations nor the profitability of the sector have significantly changed[2].

On the other hand, the biotech turnover of Italian-capital companies specialized in biotechnology R&D has increased significantly in 2019 by over 23%, well above the annual average of 12.3% recorded between 2014 and 2019. Also of note is the increase recorded, again for these companies, in intra-muros R&D investments, which rose in 2019 by 11.4% compared to the previous year and by 46.7% compared to 2014, against a growth in the same period 2014-2019 of about 31.5% for intra-muros R&D expenditure of the whole of Italian companies.

The same growth dynamics relating to Italian-controlled companies, which dedicate at least 75% of their investments in R&D to research in biotechnology, are also substantially seen for the variable of biotech employees in general (over 13,000 employees), and to research in biotechnologies thus determining a continuous increase in the weight of these companies on the total sector in Italy.

Although the activity of biotech companies remains largely concentrated in the health sector between 2014 and 2019, there is a trend towards expansion of the shares relating to companies that develop biotechnological applications for industry and the environment as well as for the agriculture and animal husbandry. For these same sectors, between 2014 and 2019 the volume of investments in biotechnology intra-muros R&D grew even faster, with increases of + 52% for industry and environment and + 64% for agriculture and animal husbandry. Overall, however, 88% of these investments are still highly concentrated in the field of human health.

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The share of micro or small enterprises exceeds 80% of the total in the sector, while large enterprises represent 9% of the entire population under analysis. With a continuously growing share of the total, over 20% in 2020, innovative start-ups significantly contribute to the expansion in terms of the number of companies in the biotechnology sector in Italy.

At the territorial level, the sector’s structure does not show substantial changes. The presence of Italian biotech companies is widespread throughout the country and, although there has been a slight increase in the share of the southern regions (from 16.6% in 2014 to 19.2% in 2019), the sector remains concentrated for more 60% in the north of the country.

The concentration is even greater for economic variables, with over 85% of turnover from biotech activities and more than 75% of intra-muros R&D investments that continue to be made in just three regions: Lombardy, Lazio and Tuscany.

The only southern region that emerges in terms of share of the total number of companies and investments in R&D is Campania.

Survey on “Impact of the pandemic on companies in the biotech sector”: resilience and good degree of adaptation

Biotechnology in Italy is a sector that, even in a difficult moment such as that of the pandemic, has been able to better cope with conditions and unforeseen events with indefinite contours.

In fact, the results of a short survey, carried out between May and June 2021 on a sample of companies among those followed for the preparation of the report and aimed at photographing the sector one year after the pandemic and the rules that governed economic and employment activities , shows that the small size of companies and the vocation to export (even if in most cases for less than a third of the total product) have not prevented companies from facing the new conditions, demonstrating resilience and a good degree of adaptation.

About 70% of the interviewees declared a stable, if not increasing, turnover. For those who have seen a decrease, we are talking about percentages between 20% and 50% and it is estimated that the previous volumes will return in about a year.

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For the companies affected by the pandemic it was possible to access the extraordinary aid and the loans guaranteed by the State, used by a limited number of the companies involved.

Despite the limitations imposed, the majority of the companies interviewed nevertheless managed to organize themselves relying on their reserves and according to the context. Considering, for example, the level of employment it is noted that this has remained stable thanks also to a re-planning that has allowed the continuation of activities; for some companies there has even been an increase in the workforce.

It is interesting to observe that R&D activities are stable for most companies: it has therefore been possible to safeguard the share of company activities destined for innovation.

As regards the future prospects, it seems that the activities for the next period will focus on several fronts: in particular, new areas of activity / research are being planned to meet the needs of the population (screening, prevention).

Comments

Assobiotec-Federchimica President Riccardo Palmisano

“Biotechnology is a sector that has extraordinary potential, confirmed by the tools that are allowing the world to overcome the pandemic: from the sequencing of the virus genome to diagnostic tests, up to vaccines and monoclonal antibodies, all the responses to Covid 19 are biotechnological states. Biotech is therefore universally recognized as an asset on which developed countries cannot fail to aim for an economic restart that is also sustainable. Today we are at a crucial crossroads and it is time, as a country system, to choose to finally follow the path of innovation. We have, thanks to the Next Generation EU and the PNRR, resources never seen before and the attention of institutions and public opinion on various priorities on which we have been asking for policy interventions for years.

There are many encouraging signs for the development of the sector that are coming from the Government: the increase in the tax credit from 4 to 20 million, the new identity and mission given by MISE to the Enea Biomedical Tech Foundation with the idea of ​​doubling the endowment of the Foundation with another 400 million available to startups focused on biotech. And again the tax exemption of capital gain for those who invest in startups and innovative SMEs, just to name a few. All encouraging signs, which bode well and which make us say, with a pinch of pride, that the seeds we have sown in recent years, finally have the opportunity to sprout, without prejudice to a rapid implementation of the necessary reforms, starting with simplification. bureaucracy that today heavily slows down our sector “.

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Gaetano Coletta (ENEA), Head of the Offer and Enhancement Service of Innovation Services, Innovation and Development Department

“From the first indications it emerges that the biotechnology sector in Italy is substantially stable, despite the COVID-19 emergency; moreover, the Assobiotec-ENEA Report confirms the trend of structural change underway in the sector, with the progressive growth of biotechnological applications for industry, the environment, agriculture and animal husbandry. This dynamic is closely linked to the innovative processes aimed at greater environmental sustainability that are characterizing many industrial sectors, often ‘traditional’, and for which the contribution of biotechnologies is often crucial “

[1] The data presented are all updated at the end of 2019 with a single 2020 data (not consolidated) referring to the number of companies. The data reported derives from the information collected directly from the companies in the sector at the end of 2020, from the 2019 financial statements, filed during 2020, and from other sources of public data and the National Statistical System.

[2] it is assumed that the change may be mainly attributable to accounting operations aimed at a different allocation of the value within industrial groups with foreign control and, to a lesser extent, to an increase in competition in some segments of the pharmaceutical market for the expiry date. 2018 of some patents.

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