KPMG advisory for site selection for life sciences in Europe

Site Selection for Life Sciences in Europe

Choosing the right location when setting up or expanding operations is no easy task.

Whether for your regional headquarters, shared service center, or your manufacturing, warehousing or R&D facility, there are many potentially attractive locations to consider.

In this fifth edition of Site Selection for Life Sciences Companies in Europe, we compare and contrast the European countries in terms of general business environment, infrastructure, innovation and R&D, availability of talent, and much more.

We also share our insights into latest developments. From the potential for Life Sciences businesses to benefit from EU funding and industrial strategies, to opportunities for contract manufacturers, to first-time product launches, our perspective can help you determine the optimal site for your operations.

André Guedel

Director, Head Business Development Tax

KPMG Switzerland

Key findings at a glance

  1. A growth in industrial strategies

    Discover the opportunities presented by a resurgence of state-led programs to stimulate economic growth and improve the resilience of critical industries such as Life Sciences.

  2. A decline in tax relevance

    Read how tax rates and incentives remain important, but BEPS 2.0’s planned minimum rates has demoted tax from its previous role as a primary driver of site selection.

  3. A boost in industry capabilities

    Find out why companies launching their first products are doing so without big pharma, as financing becomes easier to secure and the number of experienced advisors grows.

Choice of location for life sciences companies

Site Selection for life sciences companies in Europe

Site Selection for life sciences companies in Europe

How has site selection in life sciences changed?

Any life sciences executive on the lookout for the right site in Europe – whether for a regional headquarters, shared service center, manufacturing or warehousing site, or R&D facility – needs to do their homework on available locations.

But how have the pandemic and BEPS 2.0 changed the selection criteria?

The COVID-19 pandemic has been disastrous for many industries and communities. Its impact on the life sciences industry has, however, been muted.

Fortunately, with initial fears over massive supply chain disruptions failing to materialize. Instead, with new vaccines being developed in record time and manufacturing capabilities being built up quickly, life sciences businesses have demonstrated great agility and resilience.

New opportunities in a new era

In a generally favorable business environment for life sciences projects, many companies felt emboldened to launch their first product alone rather than licensing to a large pharmaceutical group.

The success of mRNA technology has meanwhile increased interest in Biologics, generating opportunities for contract manufacturers. And the EU has released significant funds to stimulate economic growth and strengthen the resilience of critical industries, including life sciences. All of these areas and more are explored in the fifth edition of our publication Site Selection for Life Sciences Companies in Europe.

As well as comparing and contrasting the business environment, infrastructure, innovation and R&D, and availability of talent for almost all countries in Europe, we identified three evolving key trends.

1. More industrial strategies as a result of the COVID-19 pandemic

The pandemic has led to a resurgence of industrial strategies, which had long been out of favor. State-led programs include the EU's Green Deal, which aims to transition national economies toward lower carbon emitting production. We expect these strategies to intensify competition among European countries to attract life sciences investments that are generally low-carbon emitting and bring high added value.

2. The continuing maturity of the Life Sciences industry

We see first-hand how companies looking to launch a product for the first time are starting to go it alone, without the help of big pharma. Financing has become easier to secure, a number of big pharma executives have been open to joining smaller biotech businesses, and there is no shortage of highly experienced advisers who can support businesses through the launch process.

3. A planned minimum tax rate under BEPS 2.0

In the OECD, 130 countries approved a minimum tax rate of 15 percent and the taxing of profits of the biggest multinationals in countries where the profits are earned. This limits potential to attract investment through competitive tax planning.

Focus on capacity increase for Biologics / CGT by CDM0s

There is a clear trend in Europe to increase production capacity in the area of Biologics and in Cell and Gene Therapy and Vaccines.

Around 70% of all expansion and greenfield projects can be allocated to these products. Over 50% of the projects are conducted by CMOs.

Looking ahead

We believe now is a good time to consider investing in new or existing life sciences operations. Europe is a prime candidate to host such operations. Not least due to its desire and ability to support life sciences across the entire value chain from drug development or medical device design to manufacturing. 

As tax incentives have become a less important determinant in site selection, grants and funds available through industrial strategies gain in importance. Significant funds are already available at both an EU and country level to support investments in life sciences projects and to strengthen the healthcare system more broadly.

In a landscape where decision-making remains complex, Site Selection for Life Sciences Companies in Europe is a critical read for anyone looking to make the right move.

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