Image source @ Visual China
Text | Arterial Orange Fruit Bureau
In the latest global pharmaceutical rankings, Roche and Novartis ranked fourth and fifth respectively, and in addition to the close ranking, the two top pharmaceutical companies have one thing in common, that is, they are both from Switzerland.
When most people think of Switzerland, they may think of a quiet town on the shores of Lake Geneva, or the majestic Alps, or the financial and precision machinery industries that are being used to the extreme in this land.
But that's not all there is to it, for in a small European country with an area of just over 40,000 square kilometers and a population smaller than Hangzhou's, it also holds an obscure but very gold-bearing title, the "Global Leader in Cutting-edge Technology."
Why? We speak with a set of data.
First of all, from the perspective of influence, since 2012, Switzerland has ranked first in the global innovation index for 9 consecutive years; secondly, from the perspective of research and development strength, in 2017, Switzerland invested a total of about 30.45 billion Swiss francs in research and development, accounting for 3.4% of GDP, and the intensity of research and development ranked second in the world; finally from the perspective of actual output, Switzerland is a big country in patent applications, and the number of patent applications ranks among the top ten in the world for many years, in addition, Switzerland is also recognized as an international scientific research center in the world, with many of the world's top research and development institutions and universities.
The high level of research and development system has created a high-quality industrial base in Switzerland. It is reported that in this small European country with a population of only 8.6 million, there are 14 Fortune 500 companies, including global pharmaceutical giants Roche and Novartis.
So, as a small European country, how did Switzerland cultivate these two pharmaceutical giants? In this regard, the Arterial Orange Fruit Bureau conducted an in-depth analysis.
01 The wisdom of a small country that "stands alone"
Behind all the achievements are traces.
In 1780, the world's first plastic surgery clinic was established in the town of Ward in Orveb, and the founder of the clinic, Jean-andre Venel, invented corsets and leg brasses for the treatment of children suffering from scoliosis and congenital foot deformities. From this point on, Switzerland began its exploration of the medical industry.
In 1815, Switzerland became the world's first permanent neutral country. Since then, Switzerland has been like Tao Yuanming's "paradise", which has rapidly become a developed industrial country driven by the Industrial Revolution, and its medical technology has also shifted from handicraft to technology industry.
But how to turn it? This often requires a "guide" who is the Nobel prize winner and Swiss scientist Emil Theodor Kocher.
Figure 1 | Theodor Kochl
As a director of surgery, Kocher invented many medical devices during his lifetime, the most famous of which was the "Kocher forceps", an instrument that stops bleeding during surgery. In addition, Kocher was also an authority on the study of goiter and pathology and surgical treatment, and in 1909, with his method of examining goiter, Kocher became the first Swiss to win the Nobel Prize.
It was under the inspiration of Kocher that Switzerland accelerated its research and development in the medical field, and by the early 19th century, Switzerland had become the european medical technology center and the birthplace of the world's leading technology, and many cutting-edge medical achievements were born in this period, such as refractometers and hemoglobinometer improvements of corneal refractive force and refractive force.
Just when the Swiss medical industry was on the rise, World War II broke out, but this did not affect the development of Switzerland, as a "permanent neutral country", Switzerland was protected from the destruction of the war, and thus took the opportunity to vigorously develop the medical industry, whether it is medical services, or medical systems, or medical innovation capabilities, all reached its peak in this period.
After nearly four centuries of hard work, the Swiss medical industry market is now very mature. According to industry reports, in 2019, there were about 1,400 healthcare industry-related companies in Switzerland, with sales totaling CHF 17.9 billion, equivalent to 2.6% of Switzerland's total GDP.
02 The growth history of "Gemini" Roche and Novartis
It has been said that Switzerland is the ideal place for the production of pharmaceuticals, as well as a gathering place for those who promote the politics and strategic thinking of pharmaceuticals.
Is this really the case? We may wish to find the answer in the growth of Roche and Novartis.
Let's start with Roche. Roche, who made his fortune on vitamins, the road to entrepreneurship is actually not smooth.
In the 1970s, Roche suffered from the Italian Visse accident, the stability price reduction crisis, vitamin competition and other events, and at the same time, due to the global oil crisis, the price of chemical raw materials rose significantly, and Roche suffered heavy losses. By 1978, Roche was nearly bankrupt, with its market capitalization falling to an all-time low of CHF 6.3 billion.
However, it was at this time that Roche's "savior" appeared, and he was the famous Fritz Gerber. Under Gerber's leadership, Roche underwent a series of reforms, insisting on being market-oriented and forcing R&D personnel to get out of the lab to understand market demand.
In addition, between 1980 and 1989, Gerber frequently made moves around the company's strategic pipeline, taking the principle of low prices as the principle, and acquired nearly 15 companies. By the end of the 1980s, four major segments of business, with pharmaceuticals, diagnostics, vitamins and specialty chemicals and perfumes as the core, gradually formed, so Roche reorganized based on the four core businesses and formed a holding group.
In 1990, Roche bought a 60% stake in Genentech and stepped into the field of biotechnology in one fell swoop; twenty years later, Roche completely acquired Genentech at a cost of $46.8 billion, and the global giant pharmaceutical company Roche was born.
Today, Roche is in the limelight, achieving a total operating income of 58.3 billion Swiss francs in 2020 and topped the global pharmaceutical company rankings; in 2021, it will achieve an operating income totaling 62.8 billion Swiss francs, ranking third in the global pharmaceutical company revenue rankings.
After talking about Roche, then say Novartis. Novartis was born a full century later than the "big brother" Roche, but for many Chinese, Novartis's fame may be a little bigger than Roche, because in the domestic movie "I am not a medicine god" released in 2015, the "anti-cancer miracle drug" - Gleevec was produced in Novartis.
As the first molecularly targeted therapy drug on the market, Gleevec ushered in the era of molecularly targeted therapy for tumors, which is hailed as a landmark discovery. Since its launch in 2001, sales of the drug have climbed year by year, peaking at $4.6 billion in 2011.
But this is just the tip of the iceberg for Novartis, as one of the world's three major pharmaceutical companies, Novartis has many "firsts", including the world's first CAR-T drug Kymriah in 2017, the first gene therapy Zolgensma for the treatment of pediatric spinal muscular atrophy (SMA) in 2019, and so on.
These "miracle drugs" helped Novartis achieve a total turnover of $48.65 billion in 2020, of which a net profit of up to $8.07 billion. In 2021, Novartis achieved revenue of $51.626 billion, ranking sixth in the world.
This is not an easy task, in the field of medicine, there are not a few giants who "return home", so Roche and Novartis must have done something right.
The first point is to attach importance to research and development. Whether it is Roche or Novartis, from the beginning of its establishment to the present, the investment in research and development has never been "stingy". According to the data, in 2021, Roche invested $16.1 billion in R&D, accounting for 21.83% of total revenue; Novartis invested $9.54 billion in R&D in 2021, accounting for 18.48% of total revenue. It is reported that among the world's top 10 pharmaceutical companies, Roche and Novartis R&D intensity ranked third and fourth respectively.
The second point is the M&A strategy. For any giant, mergers and acquisitions are a "compulsory course" on the way forward. In the case of Roche, the first merger and acquisition brought it out of the dilemma of being closed, and the acquisition of Genentech was a key step for Roche to become a global pharmaceutical giant.
The same goes for Novartis. Novartis has actually embarked on the road of merger and reorganization since its inception, acquiring the American Eye Health in 2000, acquiring the Slovenian generic drug manufacturer Lyco in 2002, trying to acquire Roche in the same year, but without success, and then continuing to acquire The German Hessell, the American gene therapy biotechnology company AveXis and so on.
The third point is to attach importance to talents. In fact, whether it is research and development or mergers and acquisitions, specific people are needed to execute, so in the development process of enterprises, talents play an extremely important role.
Taking Novartis as an example, Novartis launched the "10x Speed Talent Development Strategy" in 2020, including the 10x Speed "Best Career for Employees" project and the 10x Speed "International Talent Exchange" program, the purpose of which is to encourage more employees to "go out of the department" and even "go abroad". Because only in this way can we continuously stimulate the innovation potential of the team.
But all this is inseparable from the efforts made by the Swiss government behind this.
03 Swiss government "do something" and "don't do"
For the enterprise, its own efforts are the bottom line of its growth, and the external environment determines where its ceiling is. For Roche and Novartis, on their difficult road to global pharmaceutical giants, in addition to their own efforts, the surrounding environment has also provided them with great help.
So, what kind of help? This has to refer to the Swiss government's "doing something" and "not doing something".
Let's start with "doing nothing." A Veteran of Switzerland has publicly stated that "a country should not have a policy specifically to promote innovation, because few countries have successful innovation policies, and the reason why Switzerland can achieve the ultimate in innovation is because there is no innovation policy." ”
There's a point to that. Medical innovation and transformation is a relatively flexible and diversified process, so the Swiss government will not be forced to participate in innovation or industry policy formulation in the narrow sense, but the innovative subjects will explore, trial and error in the market competition independently, discover market potential and complete market development.
Let's talk about "doing something". Medical innovation and transformation is not easy, the objective conditions required are extremely complex, if you rely solely on the main body of innovation, it is difficult to do something, therefore, in order to promote the transformation of medical innovation, the Swiss government from top to bottom, from shallow to deep to establish a complete set of innovation system.
The first is to have specific policies in place to support healthcare innovation. The Swiss government has formulated "three major national scientific research programs", namely the interdisciplinary and cross-field "National Research Plan" to solve the urgent problems facing Switzerland, the "Key Research Plan" that organizes scientific research institutions, universities and enterprises to carry out cooperative research to shorten the distance between basic research and applied research and new technologies and new product development, and the "National Research Key Plan" that uses funds to establish comprehensive scientific research centers for research.
It is reported that each program is provided by the National Science Foundation and the Innovation Promotion Bureau to provide generous scientific research funds for innovation projects, thereby promoting cooperative innovation between universities and enterprises and basic scientific research and technology transformation.
The second point is to have a level of education that is second to none in the world. Switzerland has a very dense network of higher education, with a total of 12 national public universities, of which the Suris Federal Polytechnic Institute and the Lausanne Federal Polytechnic Institute are two universities run by the Confederation and 10 are state universities. According to the Times World University Ranking, a total of 7 public universities in Switzerland are ranked in the top 150 in the world. This provides the original impetus for medical innovation in Switzerland.
The third point is to have the most powerful and innovative biotech base in Europe. Switzerland is home to four biotech industry clusters: Bio Alps, Bio Valley Basel, Zurich Med Net and Bio Polo Ticino. Among them, Bio Alps is the most famous biotechnology park in Europe, with 5 industrial incubators such as Bio Ark, Biopole and Neode, nearly 200 biotechnology companies, including world-class pharmaceutical and biotechnology companies such as Serono, Medtronic, OMPharma, etc., as well as famous universities and research institutes.
The fourth point is to have a unique industrial system. Industry is an important part of the Swiss national economy, and the Swiss industrial output value once accounted for about 50% of gdp. The strong industrial level offers more possibilities for "medical-industrial integration" and accelerates Swiss research and development in the field of cutting-edge medical technology.
The fifth point is to have an extremely developed financial industry. Switzerland is the world's leading financial power, with 4 of the world's 25 most competitive banks, and this "banknote capacity" provides huge financial support for Swiss medical innovation. Switzerland accounts for 40% of all of Europe's investment in medical innovation.
It is based on the Swiss government's "do something" and "don't do something" that hatched the "gemini" of global medicine, Roche and Novartis.
At present, innovation and transformation are becoming the main theme of the development of the mainland medical industry, whether it is the scientific research community or the industrial community, this is the consensus. However, it must be recognized that the field of medical innovation in the mainland is still in its early stages, and there is a big gap with foreign countries in terms of original innovation and conversion rate.
This is necessarily resistance, but it is also motivation.
Therefore, standing at the moment, while constantly polishing our own innovation capabilities, we also urgently need to explore pioneers with advanced experience in medical innovation, such as Switzerland, so as to break through the inherent stereotypes and achieve comprehensive progress in the field of medical innovation.