Industry structure 29

Results

Overall industry structure

The overall industry structure is shown in figure 3.2. The total number of companies active in research and development, product development, consulting or manufacturing within the included business segments of biotechnology, pharmaceuticals and medical technology in Sweden is approximately 620 with a total of almost 34,500 employees. This does not include companies focusing on marketing and sales. Those companies have over 7,200 employees distributed among some 210 companies. This gives a total size of the industry of some 830 companies and 41,700 employees. There are also many companies with no employees which have not been included in the figures of this chapter and which are still active, according to Swedish Companies Registration Office. One business segment not included is laboratory equipment not specifically designed for use in the

biotechnology, pharmaceuticals or medical technology sectors. If this was also included, the total number of employees and number of companies would be approximately 42,400 and 850 respectively. Research-intensive companies and manufacturing companies far outnumber the companies in other activities and jointly make up more than 80% of all included life science companies. Among the companies with broad R&D, the vast majority have a product or licence on the market. Companies with narrow R&D have a product or licence on the market to a much lesser extent. There are some cases of very small companies conducting broad R&D. The information obtained during the categorisation process implies that they often collaborate with a university or are spin-offs from university

departments. It should be kept in mind that the business segments add up to the total number of employees whereas the three different sectors do not. This is because there are overlaps between the sectors.

17

Fi gu re 3. 2. Li fe sci ence in d u st ry Swe d en 20 06/ Nat io nal a n d R egi onal C lust er Pr ofi le s, An na San d st rö m an d Hel ena B erg qvi st (V IN NOV A) an d Tag e Do lk (A d d end i) , 2007 .

Parent company nationality

Figures 3.3 and 3.4 show the parent company nationality. Foreign-owned (in terms of parent company nationality) life science companies are often large companies active within broad R&D or manufacturing. Almost without exception, they are companies that have managed to put a product on the market. Companies with narrow R&D, with or without products on the market, are unlikely to be foreign-owned. The consultancy sector is also underrepresented among the foreign-owned companies. There is a similar distribution between the different sectors in regard to foreign ownership among the companies. Companies with non-majority foreign ownership are not included in the foreign-owned companies. Foreign-owned

pharmaceutical companies are often US-owned, Swiss or British. There are also several Dutch-owned companies, such as Qpharma and Polypeptides laboratories, plus Danish-owned Novozymes Biopharma AB and

NeuroSearch Sweden AB. In terms of number of employees, British ownership dominates due to AstraZeneca.

Among the foreign-owned biotech companies, parent companies from the US are well-represented; the largest are GE Healthcare Biosciences AB and Pfizer Health AB. Parent companies in the Netherlands own DSM

AntiInfectives Sweden AB, EuroDiagnostica and LTP Lipid Technologies Provider AB. Parent companies in Switzerland own Syngenta Seeds AB and Ferring AB. Most of the foreign-owned medical technology companies are owned by parent companies from the US. They are often medium-sized (50- 249 employees) or large companies (>249), like Cederroth International AB, Becton Dickinson Infusion Therapy AB, St. Jude Medical AB, Advanced Medical Optics Uppsala AB, GE Medical Systems Sverige AB. The largest British-owned companies are Astra Tech AB and PaperPak Sweden AB. Luxemburg is also relatively well-represented, which is not the case for the other two sectors. The largest Luxemburg-owned companies are Phadia, Allergon and Ascendia MedTech AB.

Figure 3.3. Parent company nationality: Swedish-owned companies

Figure 3.4. Parent company nationality: Foreign-owned companies

Positive and negative results

The companies with positive results after financial items in 2006 are shown in figure 3.5. The large companies are overrepresented among those with positive results. Companies that conduct broad R&D also mainly show positive results. Within the group of companies with a product on the market, the companies that conduct broad R&D have predominantly

positive figures whereas those that conduct narrow R&D are mainly on the negative side. Manufacturing companies mostly show positive results. Companies with zero results appear in the above ball-diagram of companies with positive business results.

The companies with negative results after financial items are shown in figure 3.6. The small companies are overrepresented among the companies with negative results. Small drug discovery companies often show negative results. Of the companies that conduct narrow R&D, more show negative results in comparison to those that conduct broad R&D. Many of the consultancy companies show negative results. Also, many recently started small companies number among those with negative results.

Figure 3.5. Cluster profile Sweden; only companies that had positive results in 200618

18

National and Regional Cluster Profiles, Anna Sandström and Helena Bergqvist (VINNOVA) and Tage Dolk (Addendi), 2007.

Figure 3.6. Cluster profile Sweden; only companies that had negative results in 2006.19

Discussion of results in industry structure

The results from the industry structure show that life science is still a very important industry for Sweden in a socioeconomic perspective since it employs so many people. It is also interesting to note that there are several sectors or activities connected to life science; this adds to the socioeconomic importance in terms of employees. One striking feature of the industry structure is the very large number of very small companies. These were given special attention in the data management and will be further discussed under employment development.

The socioeconomic benefit to society does not solely lie in the employment provided by an industry. Naturally, it is also important that the industry shows positive results. Among the research companies, this in turn is largely determined by whether the company has a product on the market or not. The results show how important it is to society for companies to develop beyond the early stages and ultimately reach the market. Also noteworthy is the fact that among the largest companies, many are foreign-owned. An evident risk of foreign ownership is that new investments and localisation decisions might not turn out to Sweden’s advantage since the link with Sweden might

19

National and Regional Cluster Profiles, Anna Sandström and Helena Bergqvist (VINNOVA) and Tage Dolk (Addendi), 2007.

be weakened. On the other hand, attracting capital to Swedish industry from abroad is highly beneficial for the industry in several ways.

Life science is a heterogeneous sector, as shown by the classification used. Many companies overlap different business segments and there is an increasingly diffuse border between the pharmaceutical and biotechnology sectors. This is largely due to the biotech methods used in pharmaceutical research and biotech companies involved in drug discovery or other research fields formerly associated with pharmacology.