Central and Eastern Europe (CEE): A market that is still severely underestimated to this day, although it has enormous growth potential and a high rate of innovation. One sector where this is particularly evident is biotech. New innovations are constantly emerging at the universities in the CEE region in important sectors such as medicine, biology, chemistry, physics and materials science. With the right basis, startups can emerge here that can soon achieve great growth. Patrick Aisher recognized that a long time ago. The British-Austrian entrepreneur and investor heads CEBINA Bridge Capital, the investment arm of the Central European Biotech Incubator and Accelerator (CEBINA).
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“Local Ecosystem for BioTech Startups”
“CEBINA has set itself the task of supporting exciting and promising biotech projects from the CEE region and turning them into startups. In doing so, we are concentrating on a market in CEE that is not being promoted enough anyway. We pave the way for the projects there to be founded,” explains Aisher. In 2021, CEBINA, together with the Hamburg-based pharmaceutical research company Evotec SE, launched the Danube Labs partnership, which aims to found up to ten new biotech companies by 2025.
Eszter Nagy, CEO and founder of CEBINA, tells how the incubator strengthens the biotech field in CEE. “We are building a local ecosystem where biotech startups can emerge and grow. In Vienna we offer a physical space for the startups complete with offices and laboratories. In future companies founded on the basis of successful projects in the DanubeLab, the research teams will remain at the universities where they were founded, but the business operations will be based in Vienna. At CEBINA, a team of experts works who not only understands business start-ups, but also science. Being selected for our incubator is not only a great help, but also a sign of quality for research projects,” says Nagy.
The CEBINA headquarters in Vienna © CEBINA
Projects offer strong return on investment
CEBINA is looking for academic projects in the biotech field in research institutions in the CEE region. Around 300 universities are involved. “The projects are very diverse and do not have a particular focus on a therapeutic area. Danube Labs is looking for innovations, which means that the projects must not only be ideas, but also have to demonstrate the potential for product development. Feasibility and credible research data must be guaranteed. Of course, the incubator also strives for profitability,” says Sophie Zettl, Principal Director of Danube Labs.
“As an investor, it is of course also important for me that there is a return on investment (ROI). However, by selecting projects very carefully and conducting rigorous reviews prior to incorporation, we ensure that there is a profit. Our target ROI for each project is 3x to 4x,” says Aisher. The incubator program turns the startups themselves into attractive investment opportunities.
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These startups are in the incubator of CEBINA
The CEBINA incubator has spawned a number of exciting startups. Eszter Nagy describes three examples in an interview:
Calyxha
Founded in 2019, the young company Calyxha develops novel small-molecule anti-inflammatory drugs. The startup’s team is targeting various inflammatory diseases and is currently in preclinical development. Calyxha’s lead product, CAL-4, is expected to be a safe alternative to corticosteroids for asthma and is scheduled to enter the clinic later this year.
Algonist
Chronic pain affects up to 1.5 billion people worldwide, but there remains a huge unmet medical need as patients fail to find adequate relief with standard analgesics. Algonist is developing novel medications for chronic pain that are as effective as opioids but do not lead to addiction.
MAG—LAB
MAG stands for Molecular Architecture Group. With a pragmatic approach and the use of chemistry, molecular structural biology and computational technology, MAG-LAB aims to revolutionize the way molecular therapeutics are developed. MAG not only brings innovation to its customers’ projects, but also develops its own pipeline of novel therapeutics for challenging medical needs.
CEBINA Bridge Capital invests in projects
While the incubator helps projects become startups, CEBINA Bridge Capital supports them financially. The investment arm is currently funding six projects from universities in Slovenia, Hungary, Poland, Austria and Italy. The current fund, which was set up two years ago, comprises a total of ten million euros. CEBINA and Evotec SE are also providing an additional ten million in funding through Danube Labs. The current fund focuses primarily on the field of therapeutics and is broadly diversified. Patrick Aisher thinks it is possible that there could also be a new fund from CEBINA Bridge Capital in the future. A possible focus would be the field of neurodegenerative diseases.
“The interaction between CEBINA, Bridge Capital and Evotec SE creates a strong ecosystem for biotech projects in the CEE region. The synergies create a positive situation for everyone. The research is financially compensated and also has an easier path to the clinical field. This creates a direct pipeline between exciting research from the CEE region and Austria. Through our strict due diligence system, we aim to ensure that the projects are characterized by the highest level of care and are very promising for the biotech sector,” says Nagy.
© CEBINA
Incubator already known in the CEE region
In order to find the right projects, CEBINA not only relies on its own network of universities, but also on local advisors and open calls for suggestions in networks such as LinkedIn. First, the incubator examines the projects based on non-confidential information, such as what disease the research team plans to treat. If the project is of interest to the incubator, he arranges a scientific discussion with the researchers, in which confidential information is also discussed.
Danube Labs is also an important player in the European startup ecosystem. CEBINA looked at a whopping 221 projects from 16 countries this year. Most of them come from Poland, Austria, Hungary and Italy. The projects are in a wide variety of areas, but most are in oncology and infectious diseases. Danube Labs is very strict when it comes to selection, only five percent of the projects made it into the shortlist.
“We have already made a name for ourselves in CEE. That’s why we’re constantly flooded with exciting ideas,” says Sophie Zettl. Once a project has been selected for the incubator, the CEBINA team and the researchers create a milestone-based work plan for the next nine to twelve months. A budget is then drawn up, which requires approval from Danube Labs. Then the actual research takes place, with regular meetings to review progress.
Organization shows the potential of the CEE region
CEBINA takes ownership of the project. The researchers can still have a management role themselves, but many actually decide against it, says Wolfgang Friedl, COO of CEBINA. “We enable the scientists to continue to focus their entire focus on research despite the start-up foundation. This is also an advantage for the universities that employ the researchers. In addition, we communicate these arrangements very transparently, the researchers know in advance exactly what they are getting themselves into with CEBINA,” says Friedl.
In the future, the incubator wants to become even more visible and draw attention to itself with more calls. There could also be significant expansion geographically. So there could soon be more cooperation with the USA and China. However, the main goal of CEBINA is to reduce investor resistance to investments in the CEE region. “CEE is a very important place for economic interests and for life sciences. Austria is well placed here as a bridge between CEE and Western Europe. We want to show how important it is to jump on this train now,” explains Patrick Aisher.