By Juan Salcines Gomez-Pardo, Consultant, Monitor Deloitte


Small to medium sized life sciences companies are now at the forefront of innovation in the search for new cures and hope for patients. However, many biotech and medtech companies face significant challenges in navigating the business life cycle. Monitor Deloitte colleagues Li Xiaofeng, Hanno Ronte and James Forsyth have recently published our latest thinking on ‘Biotech-in-a-boxTM: ‘How to ‘ACE’ geographical expansion in Europe’. This report introduces a three-step game plan to support biotech and medtech companies to thrive in an increasingly challenging environment, de-risk attempts to scale up adoption of technologies and improve success in geographical expansion. This week’s blog by our colleague, Juan Salcines, highlights the key findings from this report, based on his recent experience working with biotech companies across Europe.

Biotech at the centre of innovation

The biotech sector is becoming a key player in driving biopharma innovation, with biotech companies now responsible for around 70 per cent of clinical trials globally (of which 42 per cent are in partnership).1 Biotech’s presence in biopharma R&D is increasing and, between 2018 and 2019, the number of biotech products in the R&D pipeline increased by 14 per cent (from 4,751 drugs to 5,422 drugs).2 In particular, more than 300 next-generation therapies, such as gene and cell therapies, are currently in biotech’s late-stage pipeline (three times higher than 20093) and, between 2018 and 2019, the pipeline expansion for these therapies was over 20 per cent.4

This increasing presence in R&D is also being seen in the market access environment. The US Food and Drug Administration (FDA) approved over 100 novel drugs between 2018 and 2019 (with an unprecedented approval of 59 drugs in 2018), nearly half of which were developed by biotech companies.5,6

The importance of the European market

Typically, biotech companies focus their resources on the US market or their market of origin. As interest in their products grow, the next step is to expand into other geographies, including capturing opportunities in Europe, which accounts for over 20 per cent of the total global pharma market.7

However, Europe is a complex and fragmented biopharma landscape, with 31 markets within the European Union (EU), requiring European Medicines Agency (EMA) approval, as well as other markets with their own regulatory authorities, such as Russia and Switzerland. There are also distinct healthcare systems and reimbursement processes for each market. In addition, recent changes to EU regulations and other market uncertainties (including Brexit) are making it increasingly difficult to forge ahead. As a consequence, for many biotech companies, expanding their products in Europe can be very challenging.

Key considerations for geographical expansion

Thriving in such an intricate environment requires more than traditional thinking regarding geographical expansion. Deloitte’s Biotech-in-a-boxTM (which is targeted at biotech companies with market cap below $10 billion) aims to provide a ‘one-stop shop’ to support the growth of these companies by leveraging Deloitte’s whole portfolio of capabilities. As demonstrated in our Biotech-in-a-boxTM report we have identified a three-step game plan, the ‘ACE’ framework, to help biotech companies navigate European expansion (Figure 1).

Figure 1. Biotech expansion in Europe: a three-step ACE framework
Based on our work with biotechs, we have identified that, as a key first (and often missed) step, senior executives need to align on the vision and guiding principles for the European expansion, including key strategic aspects and potential trade-offs.

Once an internal agreement is reached, company executives can start looking at the ‘size of the prize’, and assess the market potential, commercial opportunity and different route-to-market options (i.e. out-licensing, commercial partnering or go-it-alone). To define the most appropriate route-to-market, the management team needs to analyse each go-to-market option qualitatively and quantitatively, based on an agreed set of strategic criteria (Figure 2).

Figure 2. Strategic selection criteria for deciding go-to-market options


If the preferred route is to structure a partnership or licensing-out deal, biotech executives need to understand the value of the assets, potential tax implications, different partnering models and the best way of aligning incentives. While identifying potential partners may be challenging, being clear about the vision, goals, mutual benefits and defined roles for the partnership should help determine the best partners for European expansion.

If the decision is to go-it-alone, the management team needs to understand the requirements for launching products in Europe. The team needs to map out the commercial and launch strategy, identify essential requirements for commercialisation in the European market, all the associated costs and required investment for activities. As part of this, they should also identify the capabilities required to manage the successful development and implementation in Europe (including medical, commercial, regulatory, supply chain, legal and compliance, finance, tax, HR, IT, etc.) and determine the level of contribution required for each organisational function (Figure 3).

Figure 3. Key cross-functional considerations for going-it-alone

Figure 3

More specifically, biotech executives should ask themselves the following questions:

  • Timing of build up: How long do we need to complete certain activities to build the European operation and launch the product? By when do decisions need to be made to ensure there are no delays in the European launch?
  • Resourcing plan: How do we plan to complete the key actions? Do we leverage our existing team, wait for the EU team to be on-board or outsource to third parties?
  • Cross-functional implications: Have we considered how the decisions are inter-linked? For example, the decisions on priority markets, management model, HQ location, tax and supply chain model cannot be made in isolation.
  • Interdependency: Have we considered the interdependencies among different activities? For example, you need to have a legal entity to hire the first European employee, but you need to decide on the corporate holding and tax structure before setting up the local legal entity.
  • Risk plan: What should we do to de-risk a prolonged partnership negotiation? What are some of the ‘no regrets’ activities that should be done?

The road to success requires a detailed understanding of each European market and clarity on which are the preferred target countries. It is also important to be realistic about what you are getting into and what you need to do to be fully prepared for the likely challenges along the way. An important step is for biotech companies to bring together the insights and understanding across different disciplines and functions of the company to develop a shared vision on the commercial opportunities and ambition for the desired expansion into Europe… and beyond.


Juan Salcines Gomez-Pardo - Consultant, Monitor Deloitte

Juan is a Consultant in our Strategy Consulting practice (Monitor Deloitte) specialised in the life sciences and healthcare industry. Since joining in 2017, Juan has supported pharmaceutical and biotechnology companies in commercial strategy and market access globally. He holds a MSc in Health Policy and Health Economics at the London School of Economics (LSE) and a BSc in Biotechnology and Management at Imperial College London, where Juan gained knowledge of the pharmaceutical economics and policy, health economics, health policy and healthcare financing.

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1 BIO Industry Analysis, BioMadTracker, 2017
2 Pharmaprojects, Pharma intelligence, ‘Pharma R&D Annual Review 2019’,
3 IQVIA Pipeline Intelligence, Dec 2018; IQVIA Institure, Mar 2019
4 Pharmaprojects, Pharma intelligence, ‘Pharma R&D Annual Review 2019’,
5 US Food & Drug Administration, ‘Novel Drug Approvals for 2018’
6 US Food & Drug Administration, ‘Novel Drug Approvals for 2019’
7 The Economist Intelligence Unit, ‘World Industry Outlook: Health Care and Pharmaceuticals’, 2017,


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