Life Science Services

OPERATION OVERLORD

Operation Overlord:

The Key to Success Lies in Advanced Preparation

The European biotechnology market holds a $240 billion potential. Are you going to miss it?

Europe is a prominent hub for biopharmaceutical innovation and manufacturing. The industry plays a vital role in generating employment and driving economic growth and is also the largest exporter region of pharmaceutical products.

For US small/mid-cap biopharma companies, entering the European Union’s common market can be challenging. With its 24 official languages, 5 different regulatory authorities, siloed and fragmented approach to policymaking across member states, it may not seem appealing.

However, the 80/20 rule, as proven once again, applies here. Germany, France, Italy, Spain, and the UK account for almost 80% of the opportunity. You won’t need to learn many languages after all!

Simplified and streamlined procedures across Member States through digitalization

The European Union has learned from the COVID-19 pandemic and is revising the EU pharmaceutical legislation to (finally) create a single market ensuring that all patients have timely and equitable access to safe, and effective medicines.

Through digitalization, the European Commission is advocating to simplify and streamline procedures, reduce administrative burden, and provide greater incentives for R&D innovation that benefits patients with higher environmental standards. European patients are very open to innovative drugs, technology and sustainability.

80% of investors will more likely invest in companies planning to enter the European Market Early.

While preparing this series, we interviewed EU and US investors about US small/mid-cap biopharma companies to enter the European Market Early.

80% of the respondents noted that early European expansion positively impact their decision to invest with an importance of 7 out of 10.

Most common benefits reported by the investors for the early expansion are an early Access to Payers and KOLs as well as the possibility to enroll in Early Access Programs that speed up the development of products.

The European Union is a hub of world-class innovation.

Moreover, Europe remains a key region for life sciences companies, with a market share above 20% and leads the world in terms of quality and quantity of science. Europe hosts 43 of the top 100 life-science universities, compared to 34 for the US.

Geographical breakdown (by main Markets) of sales of new medicines launched during the period 2015-2020 (source: EFPIA 2021, The Pharmaceutical Industry in Figures)

Aligning Objectives and Functions for Strategic Scaling

The critical first step, before starting market exploration, is to ensure that scaling up to Europe is one of the Company’s Key Objectives.

It is important to align the vision among senior executives, as company culture, different geographies, and potential trade-offs can generate a roller-coaster of emotions and challenges.

Assessing commercial opportunities alone is not enough and it is crucial to consider all functions and views, including strategy, finance, tax, legal, IT, HR, regulatory, and R&D.

We developed a three-step framework approach to scale-up: Strategy, Planning, and Execution.

These three steps are equally important in achieving the objective.

SPE - Three steps approach. LifeScience Services GmbH. All rights reserved. 2024

EU Business Case & Operating Model Design

The initial strategic step evaluating the potential of expanding into Europe is to create your company’s EU Business Case and Operating Model Design.

The assessment of the opportunities and risks consists in the careful considerations of the business’ organisational functions and their requirements:

1) Market Analysis

Biopharmas need to develop a strategy that optimizes three parameters: opportunity size; time to market; and investment and risk.

The goal is to simultaneously maximize the opportunity size while minimizing the time to market, investment and risk.

There are over 6000 recognised rare diseases and 95% still have no treatment option.

Opportunity Size.

Biotechs need to optmize the breadth of coverage, net price (what customers pay after discounts and taxes are taken out), and consequently the revenue potential per market.

Source: EMA

Time to Market.

Companies need to minimize two timelines: the one for the overall launch, and the one for obtaining market access (getting the therapeutic into the hands of patients) in each country. Areas such Regulatory, Medical Affairs are duly considered at this stage.

Investment and Risk.

Biotechs are very cash constrained—especially before their first launch—and so must make investment decisions deeply aware of the potential risks.

Determine the Sequence of Launches.

Companies need to lay out the envisioned order of country launches. There are two key questions to address here. The first is where to focus launch efforts on—either Germany, Italy, France, and Spain along with the UK and Switzerland (EU4+2) or all of Europe. The second is whether to conduct all the launches at the same time or in sequence; and, if the latter, what the launch order should be.

Create a Market Access and Pricing Strategy.

For each target country, companies need to assess the size of the commercial opportunity and determine how to maximize prices and volume while minimizing the access timeline. This challenging task requires an in-depth understanding of the country’s pricing and reimbursement pathways as well as the key criteria for the local health technology assessments (HTAs) that are used to curb government expenditures on very high-priced drugs.

Go-to Market Options

For biopharma companies, effectively allocating capital and streamlining core functions, from R&D to supply chain and commercial operations, has always been a challenging task.

The average investment required to establish European operations from the ground up within the first five years ranges from 50 to 150 million Euro so choosing carefully the go-to-market options is key:

  • Out-licensing
  • Sales and Distribution
  • Own Presence

Source: Boston Consulting Group 1) Company has full control 2) Partners responsible for sales

Retro-planning

Start with the end and reverse-engineer the process. Commit the launch dates for key countries and go backwards.

Your well-informed EU Business Case and Operating Model Design is an unique document, tailored to your company specific objectives and market needs.

When finalized your company is ready to go to the next step, Operation Neptune – Preparation Phase