When Serono was choosing the location for a new research centre in 2004, three factors were considered: cost, synergies with other plants and the level of available government assistance. The company made a series of rigorous and comprehensive comparisons between setting up in the US, Switzerland and Italy. It eventually chose a base in Rome. The choice will have long-term implications for the company, which is investing at least €70m in the project.
Italy won on all three points, says Dr Roberto Gradnik, Serono’s regional vice-president. First, the cost base is considerably lower than that of the US or Switzerland. Second, the new research centre would enjoy the benefits of a number of synergies with the two other Serono research centres already based in Italy. And third, the Italian company would gain a significant and generous financing package from the Italian government.
Serono is cash rich and places least importance on government support. It says that international scientists are attracted to the Italian site, by virtue of Italy’s pleasant and cultivated lifestyle.
The new centre will be at the forefront of Serono’s global research effort. The research is dedicated to the harnessing of polypetides – tiny molecules that have the potential to superceed relatively large and unwieldy protein-based solutions – for therapeutic purposes. Protein-based drugs must typically be injected; the polypetide molecule can be taken orally, as a tablet. This is regarded as more convenient and represents the next generation of drug delivery.
Another recently created piece of Serono’s Italian puzzle is its co-operation with the University of Milan’s neuro-biology department. “This is going to be one of the top centres in the world,” says Mr Gradnik. “This newly-created institute has been substantially funded with an unrestricted research grant, given by Serono. The university provides the facilities, and we will provide the running money. The team will work with the Serono genetics institute near Paris. Genetics must be tightly linked into research.”
In each case, Serono’s selection of Italy is an important vote of confidence in the country where the company was founded but which today represents only a limited part of its global operations. The 100-year-old business was launched on the site still occupied today by its Rome offices. The company moved the headquarters from Rome to Switzerland in 1980.
Cost and quality factors are at the core of Serono’s preference for Italy. For example, the firm has its worldwide stability centre at Bari, where quality control of all its products is monitored. “If you compare the cost of production in Bari versus Switzerland, there is an enormous difference,” says Mr Gradnik. “Even in biotech, where labour cost is not so significant, as it is not labour intensive, there is a significant difference. Italy has very good productivity, which is comparable to Switzerland or anywhere in Europe.”
Mr Gradnik says that the cost per syringe produced in Italy is significantly lower than the cost of that produced in Switzerland. The cost of a researcher is half in Italy compared with the Swiss researcher, or the researcher that is based in Switzerland.
Cost savings are further enhanced by the location of the production facility in Bari, in the deep south of the country. Lower costs and cost of living is not compromised by the region’s relative lack of investment.
The south of Italy benefits from some EU grants – Bari is a high priority objective area for the EU – but it also has some excellent infrastructure, including universities. Access to Bari’s airport is straightforward for the company’s Bari employees. Further excellent research is conducted at the University of Naples.
The structure of the Serono production organisation means that every product must pass through the Italian-based quality control centre, making Italy a key part of the Serono jigsaw, whose pieces are spread across the globe.
Cost, quality, availability of manpower and the wider national context ensure Serono’s commitment to a country – emotional reasons for the location have long been overtaken by hard-headed economic and strategic direction.