With a strong tradition in life sciences, the Belgian region of Wallonia has notched up an enviable roll call of international players, including healthcare giants Johnson & Johnson, GlaxoSmithKline Biologicals, Baxter, Pfizer, UCB and Ion Beam Applications, as well providing a base for a large and dynamic small and medium enterprises (SME) sector.

Making history

The region is recognised globally for its research. In fact, vaccines against measles, German measles, meningitis and cervical cancer are the direct result of research carried out in Wallonia, as are modern epilepsy treatments and proton therapy.

“The region is in good shape for patents today,” says Dr Philippe Janssens de Varebeke, life sciences expert at the Wallonia Export and Investment Agency. “The Belgian government provides a lot of support and incentives for life science firms involved in research and development (R&D). Revenue from patents is taxed at a maximum of 6.8%, which has encouraged firms such as GSK Vaccines to lodge most of its patents in our region. Another tax incentive is that, in addition to deducting interest you pay to the bank, you can also deduct a notional interest of 2.75% from your equity every year, which helps to cut your tax bill.”

Mr Janssens de Varebeke says there are also plenty of grants for R&D – up to 80%: “You have the European FP7 [Seventh Framework Programmes], those offered via the BioWin cluster as well as ones provided by the Wallonian government.” The European Commission’s FP7 bundles together all research-related EU initiatives under one roof with the aim of enhancing growth, competitiveness and employment.

But the region does not focus on just research, as Mr Janssens de Varebeke points out: “We have every part of the development chain fully covered, from research to marketing and logistics, through to production, clinical trials and drug registration.”

Location and logistics

Wallonia’s location is what has helped it become a hotspot for life sciences firms. Well served by road, rail, water and air links, it sits at a crossroads in the middle of the European “blue banana” – the curved corridor of urbanisation that stretches from the north-west of England to northern Italy. There are a potential 60 million consumers within three hours by road of Wallonia’s largest metropolitan area Liège. The city lies right in the path of the major freight corridors and has a dense road and rail network, as well as interior navigable waterways. Its main freight airport is in Liège, which handled 577,000 tonnes of goods in 2012. The main passenger airport is Brussels South Charleroi Airport, which welcomed 6.5 million passengers in 2012.

Johnson & Johnson and Janssen Pharmaceuticals have established two European distribution centres in Wallonia: a 32,000 square metre medical devices facility employing 275 in Courcelles, which serves hospitals in the region, and a pharmaceuticals hub in the city of La Louvière, handling an estimated 160 million units per year, which are distributed to wholesalers and hospitals in the region.

“For Johnson & Johnson and Janssen it was important to find distribution locations that were close to our most important markets: Germany, France, UK,” says Stefan Gijssels, vice-president of communication and public affairs for Janssen Europe, Middle East and Africa. “We looked at various possibilities in France, the Netherlands and Belgium, and concluded that Wallonia was the best choice. It is centrally located in the region, south of Brussels, with good road and air links, but lacking the congestion problems of locations between Brussels, Antwerp and Rotterdam. There was also good workforce availability.”

Mr Gijssels reports that the other key reason for selecting the region was the excellent support it received from the Wallonia investment agency. He says: “They really helped with every aspect of our search – from identifying suitable land, up to the opening of the centres themselves – including setting up recruitment and training programmes for new staff. They acted in real partnership, as a one-stop shop for everything a company needs to achieve such big investment projects. This was possibly one of the best customer experiences we have ever had with any government agency. Plus the region offers financial aid for investments that generate employment.”

Promoting innovation

Wallonia’s authorities are keen to promote innovation and competition in life sciences. The region’s BioWin cluster was set up with the aim of developing it into a world leader in the sectors of biotechnology and healthcare. The cluster also aims to create a culture of openness and partnership to improve innovation in Wallonia, and to train, attract and retain the best minds in the region.

With a total turnover of €4.4bn, the health sector that BioWin represents contributes significantly to the Walloon economy. The cluster focuses on three therapeutic themes (cancer, inflammation and brain diseases) and five technological themes (biomarkers, candidate drugs, predictive models, drug administration and medical devices). It has 510 members with 110 companies, including the world leaders already mentioned. About 80% of members are SMEs and very small businesses. There are also 400 research units employing around 11,000 researchers from five academic centres of excellence – including the Université catholique de Louvain, Université libre de Bruxelles, Université de Liège, Université de Mons and University of Namur, as well as approved research centres and a number of prestigious institutes.

According to Frédéric Druck, Director of Communication and International Relations at BioWin, the cluster’s activities have had a tangible impact on companies working in health and medical biotechnologies in Wallonia, especially SMEs. The cluster is now keen to continue with developing its initiatives in four strategic areas: R&D, skills development, internationalisation and the creation of technological platforms.

Further funding

The Walloon Government has published an ambitious plan to address the economic, social and environmental challenges facing the region in its Marshall Plan 2.Green. Backed by a budget of €2.75bn (of which €1.15bn is alternative funding) for the years 2009-2014, the plan has identified six priority areas. One of these includes using scientific research to pave the way for the future: backing investments in R&D and excellence in scientific research, and reinforcing the role of research and innovation in the economy.

As part of the plan, BioWin is focusing on developing Walloon health sector SMEs. “We have funded 27 innovative R&D projects, five of which have been completed,” says Mr Druck. “This has helped to recruit or keep employed 206 researchers. Ultimately, no fewer than 1300 jobs should be created within five years of the completion of these projects. In addition, 51 patents connected to the projects have been or are being submitted, five new businesses have been set up, seven new products or services have been launched, various distribution and licensing agreements have been finalised and other projects have been rolled out; some of them internationally.” 

The cost of this report was underwritten by the Wallonia Export and Investment Agency. Reporting and editing were carried out independently by fDi.