The European sector of Life Sciences is supported by technological advances, innovative drug approvals and a rich talent pool, thanks to the presence in Europe of 43 of the world’s top 100 Life Science universities.
However, the sector is also characterized by great competition between funders, such as Horizon Europe – an EU research and innovation fund to 95.5 billion euros – and foreign direct investment and venture capital financing (Venture Capital). In this context, national government initiatives can be a differentiating factor in valorising a country’s potential.
Italy and Milan at the center of the pharmaceutical industry
Italy is among the most important drug producers, recording a significant export per capita. So in 2021 the country exported pharmaceutical products worth 33.3 billion euros, observing a growth of over 85% in the period 2016-2021, while employment in the sector increased by 9% reaching 67,000 workers in same period of time.
In this context, Milan can be considered the center of the Italian pharmaceutical industry, ensuring 41% of Venture Capital funding in the Life Science sector. In particular, in 2023 the city attracted record funding of 82 million euros, of which 66 million euros were allocated to the AA VantagradeBio company which deals with gene therapy.
In this context, Milan can be considered the center of the Italian pharmaceutical industry, securing 41% of Venture Capital funding in the Life Science sector. In particular, in 2023 the city attracted record funding of 82 million euros, of which 66 million euros were allocated to the AA VantagradeBio company which deals with gene therapy.
The city of Milan is an emerging hub in the pharmaceutical, biotechnology and foodtech sectors, with strong growth prospects and a commitment to innovation. An example is MIND Milan Innovation District, the largest Italian district of innovation, scientific and technological research; a neighborhood that is constituted as an ecosystem capable of connecting those who innovate, those who do research or study with the institutions and the 40 companies that have settled there to date. Within the district, which currently has 7 thousand visitors a day, there are corporate headquarters – including the pharmaceutical companies AstraZeneca and Bracco – R&D departments of companies such as Rold and Illumina, business incubators specialized in Life Science such as Bio4Dreams, startups, offices , laboratories, and above all we also find the presence of public “anchors”, protagonists of the MIND project from the beginning: the IRCCS Galeazzi Sant’ Ambrogio Hospital, the Triulza Foundation, the University of Milan and the Human Technopole Research Institute.
The latter is a government-funded research institute dedicated to supporting health and well-being through the testing of cutting-edge personalized and preventative medicine. The institute’s innovative laboratories and unique computing, storage and imaging equipment, together with a group of highly qualified researchers, position Human Technopole as a global leader. The institute has a staff of over 350 people, including 220 researchers and scientific support staff. Furthermore, more than 60% of the research team is made up of international talent.
Human Technopole’s commitment to contributing to scientific evolution and progress is underlined by its unique technologies, which will be accessible to the broader scientific community. The institute has obtained 8.7 million euros in external funding, including grants and scholarships from European and international financial institutions which attest to the institute’s excellence. Future growth plans include employing up to 1,000 scientists across disciplines, such as biology, bioinformatics, chemistry, engineering, health sciences, and computational and data sciences.
An opportunity for real estate?
The growth and development of research activities, whether outsourced to specialized groups or also intended as the consolidation of start-ups, require new concepts of suitable spaces and laboratories. These spaces have unique characteristics and differ from traditional offices in often crucial factors, such as the need for more resistant floors and defined delivery routes for goods and supplies.
In Italy, few buildings have been developed reflecting all the recent trends of a Life Science building compared to standard offices. However, CBRE’s experience confirms the need to align new construction and local expansions with the current characteristics observed in more mature contexts. Some examples that follow the most advanced concepts include science parks focused on technology or some hubs that have developed precisely around the gravitational basin of important Italian pharmaceutical industries which have therefore created places of related activities and incubation of realities that were initially instrumental for the supply chain and which then they evolved into stand-alone initiatives.
The next developments in this sector will likely be driven by availability of professional talents in certain geographical areas and it will be essential to pay attention tocompetitive evolution of the Italian university environment and how this will intertwine with the private interests of the major groups active in the various technology and pharmaceutical sectors. There availability of new suitable spaces, aligned with the most advanced international standards, will be crucial. Finally, the creating integrated hubs focused on sharing ideas can catalyze the trends described above, attracting talent and investments also from the private sector, as in some cases already observed in Italy.
By Andrea Calzavacca, head of loan advisory & alternative investments Italy at Cbre Italy
