Investment in startups and scaleups exceeded all expectations in 2022, with 445 million euros of total funding driven by the first mega-round in the history of the BioRegion, that of the dental medtech firm Impress with 122 million euros. Another point to highlight is the rebound in investment by biotech companies, which have broken a new record, with 185 million euros, thanks to 51 million euros raised by Minoryx Therapeutics and 50 million by SpliceBio, based in the Barcelona Science Park, becoming the two largest biotech rounds that were closed in Spain. This is just some of the data from the 2022 BioRegion of Catalonia Report, which Biocat presented this morning in Barcelona at an event with over 600 professionals, kicked off the first Barcelona Health Innovation Week.

In a year that looked uncertain at the start given the general drop in investment and valuations in markets worldwide, health startups and scaleups in Catalonia have once again set all-time records, securing €445 million in investment. Funding through venture capital was again the main driver of this growth, with more than €343 million in total or 77% of all capital raised.

Foreign investment also continued to hit new highs. 95% of the venture capital raised was in operations with international investors. This brought the total number of international investment funds participating in rounds in the BioRegion over the years to 117, a figure that has doubled over the past 3 years. These foreign investors are mainly from Europe, the United States and Asia, including noteworthy firms like Kurma (France), Idinvest (France), Gilde Healthcare (Netherlands), Fund+ (Belgium), Wellington Partners (Germany) and corporate ventures like Philips, Roche, Siemens and Boehringer, among others. The participation of the main specialized venture capital funds established in Catalonia, like Ysios Capital, Alta Life Sciences, Asabys Partners, Invivo Capital, Inveready, Caixa Capital Risc, CG Health Ventures and Nina Capital, has been key to the success of these operations.

In 2022, there were a total of 35 transactions, one fewer than the previous year but worth more each on average. It is worth noting that the second source of funding behind private capital was competitive grants (12% of the total), which saw an all-time high of €53 million – nearly twice that of previous years due mainly to the European Innovation Council (EIC Accelerator) and the Center for Industrial Technological Development (CDTI). These sources are followed by the stock exchange (4%), venture debt (5%) and crowdequity (1%).

“There is no question that 2022 was a historic year for the BioRegion,” said Biocat CEO Robert Fabregat. “The ecosystem has continued growing according to most indicators, despite the tumultuous international scene, generating research and innovation of great value thanks to the healthcare and research centres that excel on a global level, the activity of companies and the scale-up of startups, the record investment secured and, above all, the talent of research staff, entrepreneurs and professionals who contribute every day to consolidating Catalonia’s strategic position as one of Europe’s main hubs for innovation in health.”

Regarding the investment trend, medical technology once again outdid itself, attracting more investment than any other subsector for the second year in a row with €193 million, mainly thanks to the €122 million raised by Impress in the first megaround in the history of the BioRegion. On this point, it must be noted that, even excluding this exceptional operation, the total funding raised (€323 million) would surpass the investment secured the previous year (€238 million).

Another highlight is the rebound in investment secured by biotechnology companies, with €185 million, also a new record at triple the previous total (€66 million in 2021). This increase was mainly due to two important venture capital operations, the two biggest biotech rounds in the BioRegion and in Spain: €51 million invested in Minoryx Therapeutics and €50 million in SpliceBio. For its part, with €39 million, digital health dropped nearly 40% from 2021 for the first time in 5 years, in line with the results for this segment around the world.

BioRegion excels in research indicators

Catalonia has become a priority destination in Europe and the world for clinical trials. With over 1,200 active clinical trials, the BioRegion is ranked sixth in Europe, surpassed only by countries like France, the United Kingdom, Spain (with Catalan centres taking part in 75% of all active trials in the country), Germany and Italy. On the global ranking, led by the United States and Canada in the first two positions, Catalonia is ninth.

By clinical areas, 50% of all clinical trials are in oncology. There are also numerous studies in other specialties such as cardiovascular diseases, ophthalmology, the central nervous system, mental health and minority diseases.

The timeframe for research and new therapies having an impact on patients is reflected in the BioRegion’s pipeline, with 58 therapies in total being developed in a wide variety of clinical areas (mainly oncology, neurology, infectious and minority diseases), some of which will soon be ready for commercialization and become available to the public. The pipeline includes advanced therapies being developed at Hospital Clinic, Hospital de la Santa Creu i Sant Pau, ICO-IDIBELL, VHIO-Vall d’Hebron University Hospital and the Blood and Tissue Bank.

The section on scientific publications and attracting competitive funds shows that Catalonia is in the top five (by million inhabitants) in Europe in number of publications, attracting H2020 funds and number of grants from the European Research Council (ERC), all indicators that show the quality of the research and Catalonia’s noteworthy role in the biomedical arena.

What to expect for next year: cautious optimism 

The decrease in valuations, number of operations and stock market activity in the sector globally, along with rising inflation and interest rates in 2022, make it difficult to predict what will happen in 2023.

Nevertheless, most of the specialized investors in the BioRegion are cautiously optimistic. “The macroeconomic context remains complicated due to inflation and rising interest rates. If this situation persists, we may see a similar slowdown to the one we are seeing globally, but it is important for investment to continue to consolidate the advances made in the last decade,” recognizes Ysios Capital partner Jordi Xiol. On this point, founding partner of Invivo Capital Lluís Pareras agrees, “Everything points to interest rates continuing to rise for a while longer, but I am somewhat optimistic that the speed of the global economic problem will slow.”

Montserrat Vendrell, partner at Alta Partners, also explains, “The general feeling is one of waiting for a correction in valuations,” which is also shared by Asabys partner Guillem Masferrer, who adds, “Family offices have raised less in dividends and, therefore, have less to invest. We see the same situation on an institutional level.” In terms of crowdequity, Capital Cell Director Daniel Oliver notes, “Private investors are more cautious and that means fewer valuations and potentially more profit in the future for investors that are active.”

This situation will probably make investment funds more prudent, and decisions won’t be made as quickly, mainly due to the general uncertainty. “In terms of capitalization, there is a lot of venture capital money, so there won’t be any problems with investing. But investment funds will be more cautious given the international uncertainty,” notes Pablo Cironi, director of Life Science Investment Funds at Caixa Capital Risc. On the other hand, Inveready general partner Sara Secall recognizes, “Investment in private biotech firms is a well-established market in the long term and, therefore, we expect growth to remain on par with pre-pandemic levels.”

The 2022 Report also looks at other macroeconomic and business indicators for the life sciences and healthcare sector, which makes up 8.7% of the Catalan GDP. The sector has over 1,350 companies, which export more than 53% of all life sciences and healthcare products from Spain (Catalonia exports more life sciences and healthcare products than any other region in Spain), employs 247,000 people (7% of the working population of Catalonia) and is consolidating its place as one of the most dynamic hubs of health innovation in Europe and the first in the country, with international innovation centres and multinational corporations arriving on a regular basis.

This is just some of the data from the 2022 BioRegion of Catalonia Report, which Biocat has published since 2009 and was presented this morning online and in person at an event with over 600 professionals from the sector held in Barcelona’s AXA Auditorium. President of the Government of Catalonia Pere Aragonès and Catalan Minister of Health Manel Balcells, both took part in the event. For the 2022 edition, the study was made possible thanks to collaboration from ACCIÓ, the associations CataloniaBio & HealthTech, Farmaindustria and Fenin, and the companies Amgen, ESTEVE, Almirall and Alira Health.

The presentation kicked off the first Barcelona Health Innovation Week, a week organized by Biocat dedicated to innovation, acceleration, technology and transformation in the healthcare sector. From February 13 to 16, numerous research organizations, accelerators, companies and support agents from the sector are holding some 20 activities raising awareness of the wealth and diversity of the life sciences and healthcare ecosystem in Barcelona.

 Consult the Report of the BioRegion of Catalonia 2022