Such an Opportunity May Never Come Again

Making up for the Historical Backlog

The broadly defined biomedical sector has been developing in Poland for about 20 years. This is several times less time than it had in West European countries or the United States. Despite such an enormous ‒ especially for this sector ‒ difference, considerable achievements have been made during this time.

Everything started at the beginning of the 21st century, with a few courageous entrepreneurs and some private capital. The transformation of Polish economy after the overthrow of communism in 1989 was gaining momentum, and accession to the European Union in 2003 provided another breakthrough impulse. Over time, besides subsidies for upgrading production lines in enterprises, public funds began to become available for supporting companies that pursued ambitious goals in the new economic sectors. The capital originally provided by the founders and the initial private investors gained significant leverage, enabling the creation of the first biotech or medtech companies. Grant funding was increasingly abundant, but taking advantage of it required one’s own contribution.

By then, at the turn of the first and second decade of the 21st century, the first companies launched their IPOs on the public market. At the beginning, very few of them succeeded in attracting the attention of investment funds or a wider range of private investors, who were accustomed to investing in companies generating stable cash flows. At the time, they were not yet ready to risk their capital by investing in science, the commercial results of which, contingent on success that was far from obvious, often required several years of waiting. Especially as in these areas, there were no inspiring success stories to draw on.

Global Giants Look to the Vistula

Over the past few years, Polish biotech companies have done a tremendous amount of work in order to educate the domestic capital market as to the characteristics, risk profile and potential return on investment of companies in the sector. At the same time, they have dynamically developed their projects, providing further arguments for domestic financial investors. 2022 was a landmark year in this respect.

In the middle of last year, the US Food and Drug Administration (FDA) registered Poland's first biosimilar. The product, named Cimerli, a biosimilar to the drug Lucentis, was developed by a joint venture between non-public Polpharma Biologics and Santo Holding. It was approved in the US for treatment of several serious eye diseases.

Almost at the same time, the world's leading medical diagnostics company, Qiagen, recognised the potential of Blirt, a Polish company listed on the NewConnect market, producing enzymes and reagents for diagnostic tests. Technologies and products developed by Blirt turned out to be so promising that the Dutch company decided to pay approximately PLN 300 million, almost twice its then public market capitalisation, to purchase the entire company. This was a first transaction of this kind for the Polish capital market.

A few weeks later, another acquisition took place. This time, the global laboratory equipment giant Bio-Rad Laboratories decided to buy a technology created by Polish scientists at Scope Fluidics. They have developed the world's fastest certified PCR analyser, designed to work in a point-of-care format. The US company signed a deal worth a total of USD 170 million, with USD 100 million in upfront payments. This was the largest commercialisation of a Polish invention in the history of the Polish life sciences sector. The value of the upfront payment alone was twice the level of the stock market capitalisation of the company, which is also at an advanced stage of working on a second, no less promising invention.

Ryvu Therapeutics also contributed a few arguments, signing two very favourable partnership agreements in 2022 and convincing the European Investment Bank to support its research with a EUR 22 million loan. The company concluded its first licensing agreement in July, when Exelixis decided to acquire an oncology project for use as a drug-antibody combination. The US company paid USD 3 million upfront and committed to payments of up to USD 400 million for any drug that might be developed under the collaboration. A few months later, Ryvu licensed the technology again, this time for use as a stand-alone molecule. At the same time, it began a multi-year collaboration in the field of immuno-oncology, based on multiple therapeutic targets. Ryvu's new partner was BioNTech, Europe's brightest biotech star, the company that only a year earlier had developed the first vaccine for Covid-19. BioNTech paid Ryvu EUR 20 million upfront, with the potential value of the entire deal reaching almost EUR 900 million. In addition, BioNTech, having reviewed Ryvu's entire project portfolio, decided to invest another EUR 20 milion in a share issue, becoming one of the company's largest shareholders. This was the largest deal in the history of Polish biotechnology and the first capital investment of a foreign industry investor in a Polish company.

The total value of cash payments under these transactions exceeded PLN 1 billion. This is significantly more than the total of previous payments in the entire history of Polish biotechnology.

EU Support Helps

The above numbers and brands such as BioNTech, Bio-Rad or Qiagen are the best confirmation of the value that is being created in Polish laboratories. It is generated primarily by scientists. The country's universities produce thousands of life science graduates every year. Larger companies employ people abroad as well, attracting not only those Poles who a few years ago, seeing no prospects for professional advancement in their home country, left to gain experience in Western Europe, the United States or Asia, but also high-class scientists and managers of other nationalities, boasting experience in the largest pharmaceutical corporations. Expertise transfer is progressing dynamically from year to year, and thanks to ambition and diligence typical for our nation, we are catching up very quickly, despite a considerable backlog.

Another factor that makes Poland a unique place for developing biomedical innovations is the extensive support from public funds, including from the European Union. In recent years, the sector has been boosted by hundreds of millions of euros in non-refundable grants. As Polish companies progress with their projects, new programmes emerge, and even the clinical development of drug projects is already subsidised in this way. Such a combination of various subsidies and the labour costs still being significantly lower than in the West makes it possible to pursue science at a cost that is incomparably lower than in any European country or, even more so, the United States.

Foreign Financial Investors Needed


In recent years, these advantages and their resulting potential have been recognised by domestic investors. Biotech companies have attracted the attention of a broad market, including the largest pension and investment funds on the Polish market, which have often taken high, long-term positions in their stock portfolios. The quality of projects developed in our laboratories is also appreciated by global giants, who take over Polish inventions and enter into long-term, strategic partnerships with Polish companies.

One thing that is still missing in Poland is the activity of foreign financial investors. With the outbreak of war in Ukraine, Poland's capital market has come under severe pressure ‒ after 2022, the condition of the Warsaw Stock Exchange places is at the bottom of the global rankings. Record capital outflows made it difficult for public companies to raise funds for growth in many industries, and biotechnology is no different. Meanwhile, as projects progress, the financing needs of domestic companies in the sector are going to increase. Local capital and public funds are unlikely to be sufficient to enable the commercialisation of genuine Polish biomedical innovations, which have often been in development for years.

The current price drop of life science companies on the Polish market represents an opportunity for foreign investors to invest in world-class innovations on exceptionally attractive terms. Poland's presence in the EU and NATO structures guarantees legislative, regulatory and geopolitical security, and the incomparably lower costs of research, the results of which Polish companies are able to commercialise on global terms, more than offset currency risks. The current situation creates a unique opportunity for both international capital and Polish science. Such an opportunity may not present itself again for a long time. ©℗