LIFESCIENCE

20
20

FOREWORD ON METHODOLOGY
The data contained in and employed for the present report was collected by Cerved Group through the exclusive processingof information from both public and private sources. The term ‘public sources’ is intended here as those available to the
public, from institutions including but not limited to the OECD, the Italian National Statistics Institute (Istat), Assolombarda(Lombardy business industry association), ALISEI (the Advanced Life Science in Italy Technological Cluster), FederchimicaAssobiotech (the Italian chemical and biotech industry association), Confindustria Dispositivi Medici (Italy’s medical devices
industry association), Farmindustria (the Italian pharmaceutical industry association), Eurostat and the European Patent
Office. The term ‘private sources’ is intended here as Cerved Group’s proprietary databases on the major companies that
operate in the life science industry.
The data collected has then been aggregated to build a complete picture of the life science sector, and broken down to distinguish between three main sub-sectors: pharmaceuticals, biotechnology and medical devices.
The companies that operate in the medical devices and biotechnology sub-sectors are registered under many different economic activity (ATECO) categories as their activities span many different sectors. For the pharmaceutical sub-sector, bycontrast, the related companies are registered under following ATECO category: 21: MANUFACTURE OF BASIC AND FORMULATED PHARMACEUTICAL PRODUCTS, including: 21.1: MANUFACTURE OF BASIC PHARMACEUTICAL PRODUCTS;
 21.2: MANUFACTURE OF MEDICINES AND FORMULATED PHARMACEUTICAL PRODUCTS.
All tables and graphs have been prepared by Cerved Group based on proprietary data and/or data from the public sources
listed above.
2

LIFE SCIENCE AT A GLANCEFOR BOTH THE ECONOMY AND INNOVATION, LIFE SCIENCE IS A STRATEGIC SECTOR BOTH NATIONALLY AND GLOBALLY.

LIFE SCIENCE: AGGREGATE REVENUE IN ITALY,
2016-2018€ bn

IT IS THE 1 HIGH-TECH SECTOR FOR VENTURE CAPITAL AND PRIVATE EQUITY INVESTMENTS IN ITALY (€892 MILLION INVESTED IN 2018).

90% OF EMPLOYEES HAVE ADVANCED PROFESSIONAL QUALIFICATIONS.

4,949

155,850

COMPANIESEMPLOYEESa) According to business industry association Assolombarda

KEY REGIONAL
CLUSTERS (a)3LIFE SCIENCE AT A GLANCE
LIFE SCIENCE: REVENUE BREAKDOWN BY
SEGMENT, 2018

PHARMA

2018; 100% = 87.2 Mld. €MED DEVICES

BIOTECHITALY HAS 496 INNOVATIVE START-UPS AND
SMES IN THE LIFE SCIENCE SECTOR(a)FDI STOCKS AMOUNTED TO €6.914 BILLION
IN 2018a) Source: Chamber of Commerce. Businesses registered under Ateco categories 21.1; 26.6; 26.60.02; 26.60.09; 32.50.1;
32.50.2; 32.50.3; 32.50.4; 72.11b) 2017 data (most recent year available)

291

66,500

COMPANIESEMPLOYEES

3,957

76,400

COMPANIESEMPLOYEES

701

12,950

COMPANIESEMPLOYEESIN 2018, R&D INVESTIMENTS REACHED€2.26 BILLION IN BIOTECH AND €1.65 BILLION IN PHARMACEUTICALS
R&D IN THE MEDICAL DEVICES SEGMENT
WAS €2.20 BILLION(b)4HIGHLIGHTSIn Italy, the broad life science sector (including pharmaceuticals, biotechnology, medical devices, ICT solutions forhealthcare and all corresponding service sectors) is, froman economic and technological point of view, one of themost strategic and attractive sectors, both in Italy and globally. Revenue, R&D investments and employment are all on
the rise. In 2018, total revenue in the life science industry
excluding corresponding service sectors amounted to €87.2
billion, 4.3% higher than in 2017.
The life science industry can be divided into three main sub-sectors:

pharmaceuticals

biotechnology



medical devices

Of the total revenue figure cited above, 67.2% came frompharmaceuticals, 18.9% from medical devices and the remaining 13.9% from biotechnology.
If we also include corresponding service sectors, namely
social and health care services, then in 2016 (the latest year
for which official data are available), the total value chain
recorded, according to Assolombarda, €207.5 billion in revenue and €95.5 billion in value added (a), and employedaround 1.7 million people.
Again including corresponding service sectors, the total
value added in life science is equivalent to 10% of Italy’sGDP. In the region of Lombardy in particular, life scienceaccounts for over 12% of regional GDP (and 2.7% of thenational GDP), again according to Assolombarda based on
2016 data.
Lombardy has the most developed manufacturing and services cluster in the country, with €63.4 billion in revenue,
over €23.5 billion in value added and 347,000 workers.
These figures put Lombardy among the regional powerhouses in Europe, along with Catalonia (Spain), BadenWürttemberg (Germany) and Ile-de-France (according toAssolombarda).
The life science industry is therefore one of Italy’s major
manufacturing sectors. It is the sector in which high-techbusinesses have attracted the most venture capital andprivate equity investments, with nearly €900 million invested, around 58% of the total amount invested in the sector in
2018.
The Italian life science sector features a substantial numberof small, specialised businesses, which share the terrain
with the major pharmaceutical groups.

a) accounting figure that measures the difference between the value of goods produced and the value of input goods and mate5
rials

HIGHLIGHTS
Overall, companies operating in the Italian life science sector have registered a moderate increase in annual revenue.
They invest intensely in research and development and avery high proportion of their personnel is highly qualified.

By segment, research and development investments in
Italy amounted to:vestment over the past few years have been:

 “Big Data”
 artificial intelligence genomics technology
 online platforms and telemedicine

 €1.65 billion in 2018 in pharmaceuticals (+7.8% year-on-year);

 €2.26 billion in 2018 in biotechnology (+9.7%);
 €2.20 billion in 2017 (the most recent year available) in
medical devices.
The sector is therefore a dynamic ecosystem that can respond quickly and efficiently to technological change in themarket. The key areas of development within the life science sector are related to personalised medicine and newgeneration therapies.
In recent years, life science companies have been required
to invest more and more in digital technology, as thehealthcare system is moving towards complete digitalisation. In digital healthcare solutions, the main areas for in-

6

HIGHLIGHTS

Opportunities for the sector stem from:The sector’s critical success factors are: rising demand from abroad, especially emerging/ investments in R&D

developing countries

 growing demand for new technology given the progressive digitalisation of the national healthcare system ageing population and related illnesses are generating

 internationalisation of business, including through joint
ventures and strategic partnerships abroad new business models and digital skills
 organisational capabilities

higher demand for drugs and medical devices

 research to develop tests that can identify the Sars-Cov-2 virus and to develop a vaccine for the virus as soon
as possible (near-term opportunity)

7

CONTENTS
1. INDUSTRY OVERVIEW
1.1.

Key characteristics

10

1.2.

Key sector data

27

1.3

Main trends

47

2. INTERNATIONAL PERSPECTIVE
2.1.

Investments

61

2.2.

Investments in Italy63

3. INDUSTRY ATTRACTIVENESS
3.1.

Industry attractiveness radar

74

3.2.

Opportunities

76

3.3.

Critical success factors

79

REFERENCES

83

INDUSTRY OVERVIEWINDUSTRY OVERVIEWKEY CHARACTERISTICS
The Italian life science macro-sector currently contains
4,949 active companies and 155,850 employees. Total
sector revenue reached €87.2 billion in 2018, up 4.3% from2017. The majority of this revenue (67.2% of the total)came from the pharmaceutical sub-sector, while the medical devices and biotechnology sub-sectors accounted for
18.9% and 13.9%, respectively.

drugs, vaccines and advanced therapies.
The country’s major manufacturing clusters in life scienceare, according to Assolombarda, located in Lombardy,
Piedmont, Veneto, Emilia Romagna, Tuscany and Lazio. In
particular, Emilia Romagna’s biomedical district in Mirandola (province of Modena) is the foremost biomedical district in all of Europe.

The life science sector is one of the key high-tech sectors
where Italian manufacturing plays a leading role. Manycompanies specialise in the sector, which offers robust
growth potential in support of further economic and industrial development in the country. Italian manufacturers’
know-how, especially in the pharmaceutical segment
where Italy is the European leader in terms of productivity,
the entire sector has become very attractive to foreign
investors; this bodes well for significant growth in the sector.
In fact, in 2018 production of pharmaceutical goods in
Italy amounted to €32.2 billion, the most of any European
nation for the second year running, ahead of Germany.
Italian businesses set the standard for global excellence innumerous pharmaceutical product areas including biotech
10

INDUSTRY OVERVIEWKEY CHARACTERISTICS
R&S AND PATENT
Vast investments are made in research and developmentby businesses in all three life science sub-sectors. The
funds deployed for research, development and technological innovations give rise to better healthcare for citizens,
enabling lifestyle improvements. They also constitute strategic investment in the national economy. In recent years,
with the development of digital healthcare services, newtechnologies in the fields of big data and artificial intelligence are being applied to the health sector to improve allsorts of processes, from the laboratory to treatments forpatient.

Patents symbolise the positive results of rigorous research
activity in the medical sector. From this point of view, thelife science sector is the most prolific in Italy, accounting
for about 16% of all patent applications filed in 2018(27,978 applications, 35% more than in 2009, according to
the European Patent Office).

KEY FIGURES

4,949

155,850

COMPANIESEMPLOYEESKEY BUSINESS AREAS

PHARMAMED DEVICES

BIOTECH

67.2%

18.9%

13.9%

11

INDUSTRY OVERVIEWKEY CHARACTERISTICS
START-UPS
There are 496 Italian businesses registered as start-ups or
innovative SMEs under economic activity codes relating to
the life science sector (21.1; 26.6; 26.60.02; 26.60.09;
32.50.1; 32.50.2; 32.50.3; 32.50.4; 72.11(a)).
Between September 2017 and August 2018, €128.4 million
was invested in these Italian start-ups , compared to €71.1
million over the previous 12-month period. These figures
are according to Panakes, a fund launched in 2016 thatspecifically aims to secure investments in biomedical startup companies. Besides Panakes, the other leading investment funds in the healthcare sector include Principia SGR,
Indaco Venture Capital SGR and Innogest SGR.

LIFE SCIENCE: INVESTMENTS IN START-UPS(b)€ mna) 21.1: Manufacture of basic pharmaceutical products; 26.6: Manufacture of radiation equipment and other electric and electronic
medical equipment;
26.60.02: Manufacture of electric and electronic medical equipment(including separate parts and accessories); 26.60.09: Manufactureof other radiation equipment and other electric/electronic equipment
for therapeutic use; 32.50.1: Manufacture of furniture for medicaluse, medical devices, surgical and veterinary materials, and dental
equipment; 32.50.2: Manufacture (and repair) of dental prostheses;
32.50.3: Manufacture (and repair) of orthopaedic and other prostheses; 32.50.4: Manufacture of ophthalmic lenses; 72.11: Experimental
research and development in biotechnology.
b) Source: Italian Chamber of Commerce, July 2020, for ATECO categories where Chamber of Commerce information is available. It
should be noted that some medical devices and biotechnology companies are registered under other categories, as they also operate inother fields, whereas pharmaceutical companies are mainly registered under 21.1 and 21.2.

12

INDUSTRY OVERVIEWKEY CHARACTERISTICS
LOMBARDY
CLUSTERThe industry cluster located in the northern region of
Lombardy comprises public and private sector entities
whose work ranges from diagnostics and advanced therapies to pharmaceuticals, medical devices and applied
healthcare technology. According to business association
Assolombarda, the broad Italian life science sector’s total
production value was €207.5 billion in 2016 (the mostrecent year for which data is available), including the threemain sub-sectors as well as the health and social careservices sector.
Again according to Assolombarda, Lombardy is the leading Italian region in this macro-sector with a production
value of €63.4 billion (again including health and social
care), total value added of €23.5 billion, and roughly
347,000 employees. The life science sector makes up 10%
of Italy’s GDP and 12.4% of Lombardy’s GDP, while theLombard life science industry alone accounts for 2.7% of
the national GDP.
The Lombard life science industry relies partly on outstanding research and innovation institutions across thecountry, such as leading universities and research hospitals (IRCCS). One-third of all clinical experiments conducted in Italy take place in research hospitals in Lombardy.
Finally, Lombardy is among the regional powerhouses in
the pharmaceutical sector in all of Europe, along with Catalonia (Spain), Baden-Württemberg (Germany) and Île-deFrance.

13

INDUSTRY OVERVIEWKEY CHARACTERISTICS HIBAD, led by BIOREP (Milan): to employ new clinical data

LOMBARDY
CLUSTER

collection and analysis techniques in order to develop
new biological markers useful for diagnostics, prognostics and monitoring activities, by setting up a regional
Biological Resource Centre that will work to standardise
pre-analysis procedures, the organisation of clinical datain files, as well as the treatment of biological samples(including collection, transport, handling, analysis, freezing, storage and distribution); SMART&TOUCH ID, led by Fondazione Don Carlo Gnocchi

The regional government of Lombardy is currently funding
33 research projects, providing €114.5 million last year to
the winners of a call for tenders opened in March. About 200
partner institutions are involved in these projects, 11 ofwhich belong to the healthcare and life science sectors.
More specifically, these 11 projects (listed below) will lead tothe development of new drugs and innovative therapies,
using predictive models and personalised diagnostic approaches for many different diseases.

(Milan): to create a hub for innovative ‘smart’ digital rehabilitation systems connected with patients’ needs,
through personalised care that can be shifted from theclinic to the patient’s home; this hub is also seeking toassess the effectiveness and cost-effectiveness of various care models by rigorously measuring clinical andoperational outcomes;

 IMMUN-HUB, led by Milan-Bicocca University: to develop
new second-generation molecules for cancer immunotherapy;

 MYEYE, led by pharmaceutical company Dompé Farmaceutici (Milano): to establish a multi-phase hub that can
rapidly and effectively carry out the pre-clinical development stages of ophthalmological drugs by means of innovative platforms;
14

INDUSTRY OVERVIEWKEY CHARACTERISTICS
LOMBARDY
CLUSTERproaches, which consist in devising an innovative lightsource that can produce new ions such as oxygen,
helium and lithium; PAIN RELife, led by the European Institute of Oncology(Milan): to establish an ecologically sustainable hub totreat patients in pain: the entire healthcare chain is
involved in this project, from diagnosis to home therapy, including remote monitoring and patient/caregiverempowerment practices; DSF (Digital Smart Fluidics), led by Fluid-O-Tech

 PRINTMED-3D, led by the University of Milan: to develop and integrated platform for three-dimensional
medical technologies;

 INTERSLA, led by Fondazione IRCCS – Besta Neurological Institute (Milan): to create new technologicalmodels to treat amyotrophic lateral sclerosis (ALS); INSpIRIT, led by the National Oncological Androtherapy Centre (Pavia): to develop new radiotherapy ap-(Milan): to build a standardised fluidics platform uponwhich ‘smart’ biomedical devices can be developed forboth in-hospital and home infusion in the fields of
inpatient therapy, artificial nutrition, pain relief andresuscitation;

 RE-HUB-ILITY, led by ICS Maugeri (Pavia): to build an
integrated platform that brings together healthcare
operators, caregivers, patients and information technology, in order to devise and carry out home treatment plans that can be monitored remotely; NEWMED, led by the Milan Polytechnic University: todevelop innovative methods and materials for personalised precision medicine.
15

INDUSTRY OVERVIEWKEY CHARACTERISTICS
LOMBARDY
CLUSTER

LIFE SCIENCE: PROJECTS FUNDED BY THE REGION OF LOMBARDY IN THE 2019 RESEARCH &INNOVATION HUB TENDER(amounts in euros)
VALUE OFPROJECT

FUNDING

HIBAD

5.499.681,90

2.563.844,00

SMART&TOUCH ID

6.647.699,00

2.914.253,54

IMMUN-HUB

9.490.337,14

4.167.588,50

MYEYE

7.218.950,00

3.265.320,00

PRINTMED-3D

7.272.719,43

3.163.089,29

INTERSLA

954.689,57

4.166.832,65

INSPIRIT

9.916.695,00

3.812.578,00

PAIN RELIFE

5.340.117,51

2.701.025,79

DSF: DIGITAL SMART FLUIDICS

7.715.695,91

3.326.178,36

RE-HUB-ILITY

7.793.767,21

3.817.354,20

NEWMED6.638.705,61

3.015.786,43

PROJECT

Source: Open Innovation Regione Lombardia
16

INDUSTRY OVERVIEWKEY CHARACTERISTICS
 universities

LATIUM
CLUSTER other research institutes
 hospitals
 corporations active in pharmaceuticals, the biomedical
industry, ICT, functional nutrition and the agri-food industry.

According to the latest data published by Assolombarda(for 2016), life science sector production value in the central Italian region of Lazio came to €26.8 billion, including
corresponding service sectors.
The Cluster of Health Innovation and Community (CHICO),
Lazio’s first official healthcare cluster, is a privately-owned
non-profit organisation that operates in both life sciences
and health care on an international scale. This cluster includes:

 local government health service agencies

In 2017, at the “Meet in Italy for Life Science” conference inTurin, this cluster unveiled a project called LifeSeeder, acrowdfunding initiative as a new means of procuring investments in SMEs in the sector. More specifically, LifeSeeder will put SMEs and potential new investors in contact, with a focus on equity crowdfunding in the life science
industry, so that investment funds, large businesses andventure capitalists can find and select the best SMEs andstart-ups active in the sector. The initiative’s main goal istherefore to create guidelines for further development in
the life science sector, both within the region and acrossthe country.
Another initiative through which CHICO is promoting development in the sector is called Synergy: it is a forum where
members of the cluster can present other members theiroffers or requests regarding financial partnerships, commercial deals or R&D activities.
17

INDUSTRY OVERVIEWKEY CHARACTERISTICSLATIUM
CLUSTERThe cluster currently has 130 members; combined, these
institutions have annual revenue of €7 billion and around
15,000 employees.

the Zambon group that is active in life science innovation
projects. The purpose of this deal is for these ventures tocooperate in synergy on life science investment projects,
notably the 2020 edition of Open Accelerator for a start-up
and research team looking to develop digital solutions tohuman health problems.
The global Bio Digital Convention was held (online, for the
first time ever) from 8th to 12th June 2020, and both the
CHICO cluster and the Region of Lombardy were among
the participants. This is considered the most important life
science sector event in the world; it aims to bring about
investment opportunities, along with technological andbusiness partnerships in all strategic life science fields
such as bio-computing, genomics and genetics, medical
equipment, cellular biology, nanotechnology, stem cell research, pharmaceuticals and drug delivery methods.

In June 2020, equity crowdfunding business Lifeseeder
signed an agreement with CHICO cluster member Zcube
and Zambon Research Venture, a well-known division of18

INDUSTRY OVERVIEWKEY CHARACTERISTICSEMILIA-ROMAGNA
CLUSTERLife science sector production value (including health andsocial care) in the north-central region of Emilia Romagna
came to €15.3 billion in 2016, again according to Assolombarda.

Clust-ER Health, an association officially recognised by the
Emilia Romagna regional government, encompasses numerous businesses (large, medium and small), healthcare
facilities as well as education and training providers. All ofthese institutions share skills, ideas and resources in aneffort to boost the competitiveness of Emilia Romagna’s
healthcare sector. Clust-ER is coordinated by ASTER, a
cooperative company based in Emiia Romagna that promotes innovation and technology transfer.
Emilia Romagna is in fact considered to be at the forefrontof the healthcare industry on a national level, with a number of large companies active in pharmaceuticals and in
emergent technological niches in the medical sector, suchas regenerative medicine. For these reasons, the regional
government believes the medical sector is a crucial component for the region’s economic development in general.

19

INDUSTRY OVERVIEWKEY CHARACTERISTICSEMILIA-ROMAGNA
CLUSTERThe healthcare industry in Emilia Romagna is comprised ofaround 700 businesses with about 14,000 employees combined.
This regional cluster is active in four main areas:

Of particular importance in Emilia Romagna is the Mirandola biomedical district. In and around this small town northof Modena, one of the largest biomedical districts in theworld, with over one hundred companies that specialise inproducing dialysis equipment, cardiac surgery equipment
and instruments, blood transfusion equipment and othermedical devices. Most of these companies are locatedwithin the municipalities of Mirandola, Carpi and Novi diModena. Between manufacturers and related service businesses, this district employs around 5,000 people.
Through ASTER, the Emilia Romagna region participates inthe European Life Science Ecosystems (ELISE) project,which promotes business investments in research andinnovation to develop links and synergies between them. In
particular, ELISE promotes investments in product and service development, technology transfer and social innovation. It is a five-year project (from 1st January 2017 to 31st
December 2021) running at a cost of €1,355,000.

 new generation biomedicine and prosthetics
 regenerative and reparative medicine
 pharmaceuticals and molecular biology
 technology for a healthy, active and independent lifestyle
20

INDUSTRY OVERVIEWKEY CHARACTERISTICS

TUSCANY
CLUSTERThe Toscana Life Science (TLS) Cluster, in operation since2005 and based in Siena, brings together all public andprivate sector entities engaged in biotechnology, pharmaceuticals, nutraceuticals, cosmeceuticals, medical devices
and ICT applications for life sciences.
This district is specifically composed of: companies (start-ups, spin-offs, SMEs and major
pharmaceutical industry players);

 high schools;
 institutes belonging to the CNR (National ResearchCouncil); Tuscan universities;

 university-based hospitals;
 local healthcare agencies;
 foundations, service centres and both public and priThe Tuscan life science sector, including corresponding
services, had an estimated total production value of €14.5
billion in 2016 according to Assolombarda.

vate research institutes.

21

INDUSTRY OVERVIEWKEY CHARACTERISTICS €211 million in funds generated and financing obtained

TUSCANY
CLUSTER €17 million in revenue earned by affiliated businesses
and research institutes

 €3.2 million in income from activities and services
provided by TLS itself
The cluster’s objectives are to: facilitate the process ofstarting up a business in the biotechnology field applied tohealthcare; support research in orphan illnesses; manage
technology transfers in biomedicine and enhance the value of research performed in the region through national
and international networking activities.

Some key numbers for the TLS cluster as at 31/12/2019are: 386 employees 509 publications, 84 of which were released in 2019 405 partnerships and licence agreements 52 patents

One of the more notable projects recently completed by
the cluster was OMVac, which was carried out as part of
the EU’s 7th Framework Programme. This initiative
brought in €2.61 million in funding over five years, for theapplication of synthetic biology technology to develop
new bacterial strains in order to produce new vaccines.

22

INDUSTRY OVERVIEWKEY CHARACTERISTICS

PIEDMONT
CLUSTER

foundations, local health services and hospitals, with aview to stimulating investments, innovation and internationalisation processes in the fields of human health andlife sciences. BioPmed’s goal is to form a dynamic andcompetitive life science sector cluster that interacts effectively with the healthcare system and that gains national
and international recognition.
This cluster is made up of around 400 entities, including
businesses, research centres, universities and foundations, and has achieved the following: more than 20 strategic international cooperationagreements 60 R&D projects
 €25 million in financing for healthcare and life science
programmes
In Piedmont, the life science sector including corresponding services had a total production value of €12.2 billion in2016 according to Assolombarda.

 16 EU-level projects activated 3 major B2B events organised: EuroMedTech, BioEurope and Meet in Italy for Life Science

Piedmont’s healthcare and life sciences innovation cluster
is called BioPmed. It originated from the region’s aspiration to connect businesses, research centres, universities,
23

INDUSTRY OVERVIEWKEY CHARACTERISTICS

PIEDMONT
CLUSTERIn particular, the fourth edition of the “Meet in Italy for Life
Science” international conference was held in Turin in2017. Participants included around 400 operators from 36
different countries. The sixth and most recent edition ofthis event was held in 2019 in Trieste, while the 2020 edition was postponed due to Covid-19; it has now been rescheduled for the 12th to 14th May 2021 in Genoa.

S3MARTMED – European medical technology investment
cluster: the S3martMed project’s goal is to modernise theS3 medical technology platform. With five partner clusters– Lyonbiopole (Auvergne Rhône-Alpes, France), BioWin(Wallonia, Belgium), GAPR Medsilesia (Upper Silesia, Poland) and Bioregion STERN (Baden-Württemberg, Germany) along with BioPmed of Piedmont – the idea is to forma pan-European medical cluster focused on cooperation
between regions and between sectors. The cluster seeks
to offer investment and partnership opportunities for
SMEs, technology centres and other regional cluster
stakeholders. The ultimate goal of S3martMed is then to
support entreprenurial partnerships until they become
mature relationships, by working out investment andfunding scenarios with regional authorities.
MAGIA - Medtech Alliance for Global Internationalization:
part of the EU’s COSME programme, MAGIA is an alliance
between four key clusters: BioPmed, BioWin, Lyonbiopoleand Life Science Nord of Hamburg, Germany. The purpose of MAGIA is to increase the visibility of SMES operating in the medical sector and thus attract investors tothem. The medical technology sector is considered themost promising of the emerging sectors covered by thealliance.
24

INDUSTRY OVERVIEWKEY CHARACTERISTICS

VENETO
CLUSTER

being: Friuli Venezia Giulia’s Molecular Biomedicine Consortium, the Sardinia Research Consortium, the Bioscience Technology District of Campania, the Human Healthand Biotechnology District of Puglia, the Micro- and Nanotechnology Systems District of Sicily, the Vita Liguria
Science District, and the BioTecnoMed Cooperative of
Calabria.
The main Italian business industry associations within thelife science sector are:According to Assolombarda data for 2016, the production
value of the life science sector in the Veneto region was€14 billion.

OTHER CLUSTERS AND ENTITIESIn addition to the main regional clusters described in thelast few slides, which constitute the sector’s largest manufacturing districts, there are numerous other significant
regional healthcare institutions, with the most noteworthy

Farmindustria (pharmaceuticals)

Federchimica-Assobiotech (chemicals and biotechnology)

Confindustria Dispositivi Medici (medical devices)

Italy’s leading research institutes are:

CNR: the National Research Council



ENEA: the National Agency for New Technology, Energy and Sustainable Development



IIT: Italian Institute of Technology

ISS: Istituto Superiore di Sanità (the leading scientificbody of the Italian national healthcare system)
25

INDUSTRY OVERVIEWKEY CHARACTERISTICS
ALISEI CLUSTER Advance a working programme for the cluster, along

 ALISEI is a nationwide life sciences technology cluster

 Draft working plans for recovery and development ofthat delineates three-year action plans to: facilitate innovation, research, development and technology transfers in the life science sector across thecountry; attract public and private sector funding to develop
and implement innovative projects in the field;

 promote and provide incentives for innovation in the
medical sector.
The current ALISEI action plan consists of three sections: Identify key technological roadmaps for life science
sector development. The aim here is to pinpoint priority areas for innovation; the most recent areas identified are e-health, advanced and non-invasive diagnostics, biotechnology, biocomputing and pharmaceuticals, regenerative, predictive and personalised medicine, nutraceuticals, nutrigenomics and functional
nutrition, technology for active ageing and in-homenursing care.

with the specific actions to be undertaken in pursuit of
the technological roadmaps.
the sector in the South of Italy.

On 16th January 2020, the ALISEI cluster and ITA - Italian
Trade Agency (ITA - Italian Trade Agency is the Governmental agency that supports the business development ofour companies abroad and promotes the attraction offoreign investment in Italy) signed an agreement to promote the Italian life science sector. This is a two-year plan
to create new opportunities for life science companies
and make the sector more attractive to foreign investors.
In addition, ALISEI and ITA—Italian Trade Agency havecommitted to attending national and international events
that can boost the cluster’s value. The major events identified are: a JP Morgan event in San Francisco (13-16
January 2020), the Bio Intenational Convention in San
Diego (8-11 June 2020); Meet in Italy for Life Science in
Genoa (originally scheduled for 14-16 October 2020, but
postponed to 12-14 May 2021 due to Covid-19), and BIO
Japan Pacific in Yokohama (14-16 October 2020).

26

INDUSTRY OVERVIEW

KEY SECTOR DATAQUANTIFYING THE ITALIAN LIFE SCIENCE SECTOR: REVENUEIn 2018, life science macro-sector revenue (pharmaceuticals, biotechnology and medical devices) totalled €87.2 billion,
4.3% higher than in 2017. The pharmaceutical sub-sector generates the majority of revenue (67.2% in 2018), while medical
devices accounted for 18.9% and biotechnology the remaining 13.9% of the total.
Life science remains one of the most important high-tech sectors in terms of Italian manufacturing specialisation. It is a
sector that is highly inclined towards exports and internationalisation. In the pharmaceutical sector in particular, Italy is at
the forefront of the industry: Italy claimed the highest pharmaceutical production value in Europe in 2018, having overtaken
Germany and far ahead of France, the United Kingdom and Spain.

LIFE SCIENCE: TOTAL REVENUE (PHARMACEUTICAL, MEDICAL DEVICES AND BIOTECHNOLOGY
SUB-SECTORS), 2016-2018€ bn

Source: Cerved Group illustration of Farmindustria, Federchimica Assobiotech and Confindustria Dispositivi Medici data
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INDUSTRY OVERVIEW

KEY SECTOR DATATHE PHARMACEUTICAL SEGMENT
Revenue in the pharmaceutical segment reached €58.6 billion in 2018, a 5.8% increase from the 2017 figure, which was inturn 4.7% higher than the previous year. The Italian pharmaceutical industry consolidated its position as the leading EU
pharmaceutical producer. Drugs manufactured in Italy amounted to €32.2 billion in 2018 (compared to €31.2 billion in2017); after many years as the closest ‘follower’ to Germany, Italy became the top producer in 2017. Over the last ten years,
according to the national industry association Farmindustria, Italian pharmaceutical production has risen by 100% thanks
to a boom in exports. In fact, in 2018 exports of Italian-made pharmaceuticals rose by 4.7% year-on-year to €25.9 billion,
covering 80.4% of the total production value.
Imports of pharmaceuticals in 2018 amounted to €26.4 billion, rising by 9.1% from the 2017 figure, which in turn was 5.7%
above the previous year’s total.

AGGREGATE REVENUE OF PHARMACEUTICAL COMPANIES, 2016-2018€ bn

Source: Cerved Group illustration of Farmindustria data
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INDUSTRY OVERVIEW

KEY SECTOR DATA
There are 291 pharmaceutical businesses that operate in Italy, of which: 77% specialise in the manufacture of medicines; 23% produce input materials for pharmaceuticals.
Total pharmaceutical sector employment was around 66,500 people in 2018, 1.7% more than in 2017.
As mentioned above, the growth in Italian pharmaceutical production has been driven by exports: the value of exports roseby 4.7% year-on-year to €25.9 billion in 2018; €16.6 billion (or 64.1% of the total) were medicines. The majority of exportsof Italian products are to other European countries (69.9%, or 56.8% to the EU-28 only); of the other continents, the Americas account for 17.7% of Italian pharmaceutical exports and Asia, a growing market, accounts for 10% of the total. By individual country, the leading export destinations are Belgium (15.2% of total exports), the United States (14.4%), Switzerland(10.9%), Germany (10.7%) and France (7.3%).

Imports reached €26.4 billion in 2018, a 9.1% increase from 2017, with imported medicines alone worth €13.9 billion. Most
imported drugs come from other European countries (82.2%), followed by the Americas (13.9%). By individual country, Italy
imports most from Germany (17.4% of the total), Belgium (15.8%), the United States (13.6%), Switzerland (11.6%) andFrance (10%).

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INDUSTRY OVERVIEW

KEY SECTOR DATAVALUE OF PHARMACEUTICAL EXPORTS, 2016-2018€ bn

VALUE OF PHARMACEUTICAL IMPORTS, 2016-2018€ bn

Source: Cerved Group illustration of Farmindustria data
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INDUSTRY OVERVIEW

KEY SECTOR DATA
Exports therefore make up a substantial portion of Italian companies’ sales. Indeed, Italian-owned pharmaceutical corporations generate over 70% of their annual revenue from exports on average, and among foreign-owned corporations operating in Italy, that figure rises to a massive 90%. Sales abroad by Italian-owned corporations have grown from €3.1 billion in2007 to €7.5 billion in 2018.

ITALIAN-OWNED PHARMACEUTICAL COMPANIES' SALES ABROAD, 2007 AND 2018%

Source: Cerved Group illustration of Farmindustria data

Italy is also first in Europe in terms of contract development and manufacturing organisations (CDMO). These are businesses that produce drugs as contractors for other firms. The rise of CDMOs in Italy has been driven by growing foreign demand. Exports of contract manufactured goods from Italy reached €1.9 billion in 2017 (the latest year for which such data isavailable), ahead of Germany (€1.7 billion) and France (€1.5 billion).
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INDUSTRY OVERVIEW

KEY SECTOR DATA
Again, the pharmaceutical export value was €25.9 billion in 2018, up from €24.7 billion in 2017. The graph below shows
how Italy’s pharmaceutical exports have been growing faster than overall manufacturing exports for quite a few years.

PHARMACEUTICAL EXPORT TREND COMPARED TO OVERALL MANUFACTURING EXPORT TREND,
2000-2018

Source: Cerved Group illustration of Farmindustria data
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INDUSTRY OVERVIEW

KEY SECTOR DATA
Most drugs produced in Italy are manufactured in the following five regions: Lombardy, Lazio, Tuscana, Emilia Romagna
and Veneto. These five account for almost 90% of the sector’s jobs. However, there are pharmaceutical companies basedin other regions that generate value. The notable production regions are:

LOMBARDY:

VENETO:PIEDMONT & LIGURIA:

29,000 direct workers
22,000 service workers#1 pharma region in Europe

Over 3,000 direct workers
9,000 service workers
30% high-tech exports

2,100 direct workers
9,100 service workers

EMILIA ROMAGNA:MARCHE:

TUSCANY:

3,800 direct workers
8,500 service workers
Excellent service sector cluster

3,400 direct+service workers
Exports to 40+ countries from
Ancona7,000 direct workers
5,400 service workers
Top-10 high-tech cluster

LATIUM:

ABRUZZO:CAMPANIA:

16,300 direct workers
7,400 service workers
83% of exports are high-tech

1.500 direct workers (100 in
R&S)
1.600 service workers

Over 9,000 direct workers
4,000 service workers

PUGLIA:

SICILY:

Hosts excellence centres ofsome major foreign multinationals

1,000 direct workers
3,000 service workers

Source: Cerved Group illustration of Farmindustria data
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INDUSTRY OVERVIEW

KEY SECTOR DATA
R&D
R&D investments in the sub-sector grew by 7.8% year-on-year to €1.65 billion in 2018. This spending is equivalent
to 7% of total R&D spending in Italy, putting pharmaceuticals in third place for the value of research investments.
The number of employees engaged in R&D work wasaround 6,600, up 3% year-on-year, and 52% of these employees are women.
There is a significantly higher concentration of innovative
businesses in pharmaceutical sector than in the manufacturing sector overall. A substantial portion of R&D
investments go towards clinical trials, to the tune of €700
million per year; this is about 20% of the total amountspent to conduct clinical trials in the entire EU.
In terms of the amount spent on research and development, Lombardy is the number one region in Italy, followed by Emilia Romagna, Lazio, Tuscany and Veneto.
Other regions where businesses invest in pharmaceuticals are Abruzzo, Piedmont, Campania, Sicily, Friuli Venezia Giulia, Trentino Altro Adige and Marche.

PHARMACEUTICAL INDUSTRY R&D INVESTMENTS, 2016-2018€ bn

PHARMACEUTICAL INDUSTRY R&D INVESTMENTS BY REGION, 20182018: 100% = €1.65 bn

Source: Cerved Group illustration of Farmindustria data
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INDUSTRY OVERVIEW

KEY SECTOR DATA
In a nutshell, the Italian pharmaceutical industry is: the manufacturing sector with the highest growth rate: +22% from 2008 to 2018, vs. -14% in manufacturing overall; the manufacturing sector with the highest export growth rate: +117% from 2008 to 2018, vs. a +27% average among the
major Italian industrial sectors;

 the fastest-growing sector in the country for employment: +8.6% from 2014 to 2018, vs. +2% manufacturing sector average (there are now 4,500 more pharma sector employees than in 2014, mostly related to R&D positions; 42% of the 66,500
workers in the sector are women and 81% of newly hired employees are under 35 years old; the third-leading sector in Italy for R&D investments, accounting for 7% of total national R&D spending, with particularly
advanced research ongoing in the following fields: haemoglobin derivatives, vaccines, rare diseases and advanced therapies (Italy is the EU leader in this last field); one of the ‘greenest’ sectors of the economy, having reduced energy consumption by 54% and greenhouse gas emissions
by 74% over the last decade; compared to other EU countries’ pharmaceutical sectors…
 1st in production value (€32.2 billion in 2018);
 1st in export growth (+117% vs. +81% EU average from 2008 to 2018);
 1st in R&D investment growth (+35% vs. +20% EU average since 2013).
Source: Cerved Group illustration of Farmindustria data
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INDUSTRY OVERVIEW

KEY SECTOR DATATHE MEDICAL DEVICES SEGMENT
The Italian medical devices sector generated €16.5 billion in revenue in 2018, of which €5.1 billion in foreign sales, broadly
stable from the previous year (-0.4%) after a 1.7% increase from 2016 to 2017.

This is a very diverse sector that is highly innovative and specialised, with a leading role played by major foreign multinationals that are present in the sector across the globe.
Exports account for 30.9% of the total 2018 revenue figure cited above (€5.1 billion, up 4.7% from 2017), whereas the domestic market value was €11.4 billion (-1.7% year-on-year).

AGGREGATE REVENUE OF MEDICAL DEVICE COMPANIES, 2016-2018€ bn

Source: Cerved Group illustration of Confindustria Dispositivi Medici data
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INDUSTRY OVERVIEW

KEY SECTOR DATA
The medical devices sector includes electrical and electronic medical equipment, in-vitro diagnostics instruments, ehealth devices and any other devices used to diagnose, evaluate or monitor patients affected by an illness, injury or othermedical condition. The medical devices sub-sector has 3,957 active companies, of which around 2,100 are manufacturers.

NUMBER OF MEDICAL DEVICE COMPANIES BY TYPE OF BUSINESS, 20182018: 100% = 3.957

Source: Cerved Group illustration of Confindustria Dispositivi Medici data
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KEY SECTOR DATA
About 5% of Italian medical device businesses are large
companies, meaning that the vast majority are specialised SMEs. The sector employs a total of 76,400 people,
many of whom have highly specialised qualifications.

MEDICAL DEVICES REVENUE BREAKDOWN BY
DISTRIBUTION CHANNEL, 20182018: 100% = €11.4 bn

Sales abroad have been growing for eight consecutive
years, and rose by 4.7% from 2017 to 2018. The key destination countries are the USA, France and Germany (inthat order). Italy is the 12th biggest exporter of medical
devices in the world. Imports are also on the rise (+3.4%
year-on-year in 2018), and the leading countries of origin
are (in order) Germany, the Netherlands and Belgium.
The Italian market for medical devices amounted to €11.4
billion in 2018, 66% of which is related to the publichealthcare system, and the remaining 34% private-sector
healthcare institutions.
Source: Cerved Group illustration of Confindustria Dispositivi Medici data

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INDUSTRY OVERVIEW

KEY SECTOR DATAREGIONAL DISTRIBUTION OF
2018 DATA
The portion of the country that represents the lion’s shareof the sector is the North. The region of Lombardy alone
contains 1,213 medical device businesses (including 73
start-ups) and 24,234 employees. Lombard exports takeup 28.2% of the national export value. Another major rolein northern Italy is played by Mirandola in Emilia Romagna,
the largest biomedical district in Europe.

NORTH
BUSINESSES: 2,570
START-UPS: 214
EMPLOYEES: 53,923% EXPORTS: 87.2%

CENTRE
BUSINESSES: 760
START-UPS: 64
EMPLOYEES: 14,158% EXPORTS: 10.3%

SOUTH & ISLANDS
Source: Cerved Group illustration of Confindustria Dispositivi Medici data

BUSINESSES: 627
START-UPS: 56
EMPLOYEES: 8,319% EXPORTS: 2.5%

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KEY SECTOR DATA
R&D
Investments in research and development in the medical
devices sub-sector amounted to €2.2 billion in 2017, themost recent data available. The personnel count for R&D
activities in the country is 9,168, or about 12% of the total
in the sector. R&D is carried out by medical device companies in order to design new machines that integrate
advanced digital software.

According to industry association Confindustria Dispositivi Medici, as of 2018 there were 334 start-ups active inthe medical devices sector in Italy, about 40% of which
are innovative SMEs, and 43% are spin-offs of public sector research programmes. The main segment on whichthese recently founded companies are focusing is diagnostics (38% of the total), followed by rehabilitation (12%)
and oncology (11%).

With the national healthcare system undergoing a reorganisation process for sustainability, digital innovations
are likely to shape the future of the healthcare sector. The
digital innovation factor is speeding up changes and leading to improvements in patient personalisation, monitoring, continuity of treatment and access to treatment,
which should ensure a more effective and efficient
healthcare system.
The enormous potential for improvements stemmingfrom digitalisation could subsequently be extended toother areas. For instance, a single piece of medical equipment could be used to conduct several tests simultaneously, could be used to provide suggested diagnoses topractitioners and/or recommend further analyses or complementary tests.
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INDUSTRY OVERVIEW

KEY SECTOR DATA
THE BIOTECHNOLOGY SEGMENT
In 2018, revenue in the biotech sector came to €12.1 billion, 4.3% higher than in 2017, after 4.5% growth from 2016 to 2017.
The number of companies operating in the sector remained broadly stable last year, going from 701 in 2018 to 696 in 2019;
these companies employed 13,313 in 2019, compared to 12,950 in 2018.

Research and development activity is considerable and growing in all areas of this sub-sector. Total R&D investments
reached €2.26 billion in 2018, up 9.7% from 2017 and 25% more than in 2014. The core business area for 49.4% of Italianbiotech companies is related to human health.

AGGREGATE REVENUE OF BIOTECHNOLOGY COMPANIES, 2016-2018€ bn

Source: Elaborazione Cerved Group su dati Federchimica-Assobiotech
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KEY SECTOR DATA
The business most commonly practiced by Italian biotech
companies is human health (49%), followed by services
and products for industrial and environmental applications (29.9%).

NUMBER OF BIOTECHNOLOGY COMPANIES BY
BUSINESS SEGMENT, 2019

Two-thirds of the national biotech industry’s revenue isgenerated by foreign-owned companies, which are active
especially in human health. Italian-owned companies,
accounting for the majority in terms of the number ofactive biotech companies, tend to be smaller in scale but
do generate about half of the overall sales in the products/services for industry and the environment segment.

2019: 100% = 696

In 2019, according to industry association Assobiotech,
there were 696 active companies in the sector, including: 344 in human health (biopharmaceuticals, diagnostics
and vaccines) 208 in products and services for industrial and environmental applications – these companies generally
offer solutions to improve manufacturing process
sustainability; 84 in the genomics, proteomics and enabling technologies segment – they conduct fundamental research
for all main fields of application for biotechnology; 60 in biotechnology for veterinary, agricultural andSource: Elaborazione Cerved Group su dati FederchimicaAssobiotech

animal husbandry applications – they develop products for food security and animal nutrition.
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INDUSTRY OVERVIEW

KEY SECTOR DATA
The human health segment accounted for 75% of biotech
sector revenue, or €9.1 billion, in 2018, and was the focus
of over 83% of the sector’s total R&D expenditures.

Another notable characteristic is that nearly all of thecountry’s biotech operations take place in north-central
Italy, accounting for 98.3% of sector revenue.

BIOTECHNOLOGY SECTOR REVENUE BY SEGMENT, 2018

Within the human health segment, Italy boasts a superior
position in the field of advanced therapies, including somatic cellular therapy, gene therapy and regenerative
medicine.

2018: 100% = €12.1 bn

START-UPS
Start-ups and innovative SMEs make up 20% of the Italian biotech business population. According to Assobiotech, over 50 new innovative start-ups active in biotechnology have registered in Italy.

Source: Cerved Group illustration of FederchimicaAssobiotech data
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INDUSTRY OVERVIEW

KEY SECTOR DATATREND IN THE NUMBER OF BUSINESSESOver the last ten years, the number of biotech businesses has risen consistently. Because biotechnology activities are
spread across several different official ATECO economic activity categories, it is impossible to provide precise figures frombusiness registry data alone. However, Assobiotech claims that there were 696 companies active in 2019, compared with
701 in 2018, with 146 start-ups as of 2019 compared to 133 the year before.

NUMBER OF BIOTECHNOLOGY START-UPS, 2008-2019

Source: Cerved Group illustration of Federchimica-Assobiotech data
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KEY SECTOR DATA
R&D
Total R&D investments made by biotech companies
amounted to €2.26 billion in 2018, 9.7% more than in 2017,with €770 million specifically going towards research projects.

BIOTECHNOLOGY INDUSTRY R&D INVESTMENTS, 2016-2018€ bn

83.3% of the total R&D spending in the sub-sector
stemmed from companies active in the human health segment.
Italian biotech companies are investing heavily in research
into diseases and illnesses for which no cure or definitive
therapy has yet been found. They are concentrating especially on developing cancer treatments. However, over thelast two years more experiments have been done in infectious diseases, and this trend is currently ramping up in therace to develop a vaccine against the Sars-Cov-2 virus.

BIOTECHNOLOGY INDUSTRY R&D INVESTMENTS BY SEGMENT, 20182018: 100% = €2.26 bn

R&D investments in biotechnology in Italy, according toAssobiotech, make up 3.4% of all R&D spending by producers in the country; this figure is impressive considering thatthe number of biotech businesses is only 0.2% of the total
in Italy.
These investments take place almost entirely in just three
regions of northern and central Italy: Lombardy (45.3%),
Lazio (22.4%) and Tuscany (29%).

Source: Cerved Group illustration of FederchimicaAssobiotech data
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INDUSTRY OVERVIEW

KEY SECTOR DATAOVERVIEW OF THE LIFE SCIENCE SECTOR INCLUDING CORRESPONDINGSERVICE SECTORS
Beyond the three manufacturing sub-sectors covered above (pharma, biotech and medical devices), the full life science value chain can be considered as including all companies and institutions that provide health and social care services: public
and private hospitals, specialised clinics and medical practices, as well as healthcare service agencies. When the full value
chain is included, according to Assolombarda, in 1016 the life science sector had total revenue of €207.5 billion, and value
added of €95.5 billion. Lombardy is the Italian region with the most extensively developed life science chain, with a production value of €63.4 billion and value added of over €23.5 billion.

LIFE SCIENCE PRODUCTION VALUE, INCLUDING CORRESPONDING SERVICE SECTORS, BY REGION, 2016
€ bn

Source: Cerved Group illustration of Assolombarda data
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INDUSTRY OVERVIEW

MAIN TRENDS
MAIN TRENDS IN TECHNOLOGYAND INNOVATION
There is an ongoing process of technological development in which leading scientists and technology experts
are making progress towards a digitally equipped worldthat should be beneficial to society as a whole. Digital
health is an integral part of this process: the aim is to enhance digital systems in the healthcare sector in order tomake healthcare more accessible to all and to improvethe economic sustainability of the national healthcare
system.

cient manner than ever before. Digital innovations arethus revolutionising the dynamics of the sector, from thelaboratory to the production line to the point of patientcare.

The Italian digital healthcare market value is estimated at€1.7 billion as of 2018, up 4.2% from the previous year,
according to daily financial newspaper Il Sole 24 Ore.
The key technological trends are digitalisation and automation. Enhancing healthcare services through digitaltechnology and tools such as big data and artificial intelligence will enable the collection, tracking and processingof vast quantities of data in a much faster and more effi47

INDUSTRY OVERVIEW

MAIN TRENDS
The main areas in which digital technology is coming into
contact with the health sector are:very recently was seemingly unimaginable due to the dispersion of information in the national healthcare system.

 “Big Data”
 artificial intelligenceThis sprouting big data revolution has thus far been applied concretely in the form of: genomics technology

 electronic healthcare folders

 online platforms and telemedicine

 healthcare files
 individual electronic hospital/medical charts and rec-BIG DATAThe healthcare sector generates a huge amount of dataand information, relating not only to diagnoses, prescribed
therapies, images and test results, but also invoices andreceipts for healthcare services and other administrative
records. For each patient there is a sizeable quantity of
data, creating a virtually immeasurable quantity for thehealthcare system as a whole to handle. With big datasolutions, it can all be processed and examined promptly.
Big data can be used to help practitioners diagnose patients more quickly and accurately, as well as enable themto search through millions of medical files in order to inform analyses on specific patient samples and thus implement preventive medicine strategies, something that untilords

 patient notebooks
The Pain-RELife project, one of the 33 funded by Lombardy’s regional government through the Research andInnovation tender called in March 2019, aims to create adynamic, integrated ecosystem based on new big datacollection, management and analysis techniques, in orderto provide continuity in treatments for patients with severe
pain. The new hub facilitates further digitisation and new
integrated, innovative, sustainable care models in which
patients in pain can be assured of constant cooperation
between and support from healthcare personnel.

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INDUSTRY OVERVIEW

MAIN TRENDS
Integrated data collection from self-reported information(from sources such as electronic diaries and planners,
special apps and video recordings) is combined with augmented reality techniques and/or specialised treatment
devices (e.g. Transcranial Direct-Current Stimulation (TDCS)
devices) in order to:assess effectiveness of therapies and treatments using reliable, controlled measurements;



pinpoint areas where further research is needed;

propose new guidelines or recommendations for personalised pain relief;

improve surveillance of treatment use.

The total budget for this project is €5,340,117.51, of which€2,701,025.79 is being covered by regional government
funds. Led by Istituto Europeo di Oncologia (IEO – the European Oncology Institute), the project’s other partner institutions are the University of Trieste, GTS Srl, Nuvyta Srl,
Casa di Cura Privata del Politecnico SpA, Zadig Srl, and the
Istituto di Management Sanitario Srl.

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INDUSTRY OVERVIEW

MAIN TRENDSARTIFICIAL INTELLIGENCE
Applying artificial intelligence (AI) to healthcare has become increasingly common, especially in the form of automating certain diagnostic activities that assist doctors
in reaching decisions. Nevertheless, there is plenty ofroom for further improvement, development and extension of AI in healthcare services.
AI can support early diagnoses, by identifying early symptoms or determining in advance the likelihood that patients will contract a given illness. The segment that isbenefiting most from this technological progress is diagnostic imaging, where automatic image-reading by advanced software facilitates the radiologist’s task. This
process is, however, widening the gap between hospitals
that can afford to adopt AI techniques to interpret images
and those that must make do with traditional methods.

formed by robots. AI is now also being used to regulate
movements of the human hand in order to prevent any
sudden shaking or vibrations. With these advantages,
surgical robot production has been a very fast-growing
business in Italy for several years.
Other fields of application for AI include improvements tohealthcare assistance tasks, the promotion of preventive
medicine, and the personalisation of new drugs.
Access to and analysis of vast amounts of data (Big Data)
is an essential factor in the effectiveness of AI when applied to healthcare settings, so AI and Big Data solutions
are very closely connected with each other.

Until recently, AI had been used only for predictive analysis or research, whereas the technology is now being applied to mini-invasive surgical operations that can be per-50

INDUSTRY OVERVIEW

MAIN TRENDS
The following are examples of promising pilot projects inapplied AI for life science in Italy:Valduce Hospital, Como, automated doctor: a televisit system using an inTouch robot, where specialists can communicate in real time with patients who
have suffered strokes or trauma, and begin lifesaving treatment remotely, well before the patient
arrives in hospital, as well as make progress assessments for subsequent rehabilitation;the ESH app: enables blood pressure and weight ofpatients with hypertension to be monitored, by recording data and sending it directly to the patient’s
doctor for analysis and monitoring;Mede Hospital (near Pavia) 2020 pilot project: using a
medical device developed by a company based in Tel
Aviv, doctors and nurses will be able to check up on
patients’ conditions without directly seeing or touching them. From a control room, physicians can moni-

tor patient health via sensors placed under the bed
frame that detect changes in vital signs. This service
can be extended to home care as well, via a closed
wifi connection, so that doctors can monitor patientsand intervene where necessary.

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INDUSTRY OVERVIEW

MAIN TRENDSGENOMICSGenomics is the discipline of studying genetic profiles on
a broad scale – it is distinct from genetics, which focuseson individual genes one at a time. The process of‘transition’ from genetics to genomics is a major development in the life science sector.

Notably, the first ‘Genomics Monitor’ in Italy was established in 2020 with the aim of tracking developments in
new DNA sequencing technology.

DNA sequencing has become an essential tool in biological research. In order to performing DNA sequencing, scientists have in recent years shifted from the Sanger method, where single genes are isolated and analysed, to ‘Next
Generation Sequencing’ where millions of DNA fragments
are sequenced at the same time. This new generation
sequencing method constitutes a valuable tool for further
in-depth analysis in biology and medicine. It is in fact
helping scientists craft new models for developing diagnostic tests. New treatment methods facilitated by these
new techniques are referred to as ‘personalised medicine’or ‘precision medicine’. Currently, the most important fieldof application for personalised medicine is oncology.

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INDUSTRY OVERVIEW

MAIN TRENDS
ARGO Project 2019-2020: the applied research centre Arc-net of the University of Verona is heading up an international consortium for cancer genomics called Accelerating
Research in Genomic Oncology (ARGO). This project aims
to build an infrastructure network for multi-centre clinical
trials in order to bring new drugs onto the market in thenear future. Arc-net is working to form a network of highquality Italian oncology centres. With its hub in Verona, thegoal of this network is to make Italy a leading contributor
to defining a new era of precision medicine in oncology.

Srl. The total budget is €11.8 million, of which €8.146 million is covered by government funding.

“From Genoimcs to Rare Cancer Therapy” Project 2020:
the general purpose of this project is to develop an innovative approach to treating rare cancers, based on themost appropriate cellular models and biological samples,to then develop specific therapies using new-generation
methods. Highly innovative sequencing technology will beapplied to analyse genomes, even in single cells. This project is led by the Telethon foundation and its partners include the G. Pascale National Tumour Institute, Nouscom
Srl, pharma company Dompé Farmaceutici SpA, and Takis

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INDUSTRY OVERVIEW

MAIN TRENDS
ONLINE ASSISTANCE AND TELEMEDICINE
Online assistance and telemedicine are further applicationsof digital technology in the healthcare system that are rapidly progressing, both in Italy and internationally.
Telemedicine can be defined as any technology that facilitates remote patient monitoring by doctors. Particularly on
the back of the serious public health emergency caused by
Covid-19 that took the country by storm in the earlymonths of 2020 and has necessitated social distancing
measures and restrictions on freedom of movement within
the country, it has become clearer than ever that thehealthcare system cannot be adequately efficient without
embracing telemedicine solutions.
Given that chronic illnesses have become more and morecommon and a priority concern, the use of remote monitoring technology for patients would seem to be a fundamental step forward. Telemedicine solutions enable patients toretain their autonomy and self-sufficiency in the comfort oftheir own home. It effectively means that a hospitalcommunity-home network is constructed, in which generalpractitioners, paediatricians, nurses, surgeons and othermedical professionals in the various specialisms interact.
More specifically, telemedicine services can be subdivided
into: specialist medical services: remote specialist medical
visits, consultations (including those between doctors)
and remote cooperation between healthcare institutions; telehealth: general primary healthcare provision forpatients, especially those with chronic illnesses, provided at a distance by doctors to reach a diagnosis;
 teleassistance: social care services, most notably forthe elderly.

The Italian Ministry for Economic Development has allocated funds earmarked under the “Cura Italia” law decree.
Specifically, €600 million will fund strategic and innovative
programmes around the country that are dedicated todeveloping the “green economy”, biomedicine and telemedicine, with €200 million allocated specifically to biomedicine and telemedicine projects. The government hasgiven priority to investments used to manufacture any
medical equipment and biomedical material needed tocombat the Covid-19 outbreak.
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INDUSTRY OVERVIEW

MAIN TRENDS
The global telemedicine market value amounted to €45.5 billion in 2019 and is expected to grow sharply to reach €175.5
billion by 2026.

GLOBAL TELEMEDICINE MARKET, 2019 AND FORECAST FOR 2026
€ bn

Source: Cerved Group illustration of Statista data
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INDUSTRY OVERVIEW

MAIN TRENDS
The global digital health market value amounted to €86.4 billion in 2018 and is forecast to skyrocket to €504.4 billion in
2025.

GLOBAL DIGITAL HEALTH MARKET, 2018 AND FORECAST FOR 2025
€ bn

Source: Cerved Group illustration of Statista data
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INDUSTRY OVERVIEW

MAIN TRENDS
In Italy, the total amount invested into developing healthcare applications of digital technologies was €257 million in 2018(the latest year for which data is available – from source Statista), compared to €235 million in 2017.

DIGITAL HEALTH: INVESTMENTS IN DIGITAL TECHNOLOGIES IN ITALY, 2010-2018€ bn

Source: Cerved Group illustration of Statista data
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MAIN TRENDS
VENTURES INTO LIFE SCIENCE BY
TECH GIANTS
The influx of digital technology into the life science sector
has also brought new players onto the scene, most notably
some of the high-tech industry giants. These new entrants
are sparking substantial changes in the sector’s competitive framework.

APPLEed). This platform is accompanied by CareKit, an app thatlets users monitor any health problems or illnesses andshare useful information with their doctors.

GOOGLE
Alphabet, parent company of Google, currently has threesubsidiaries active in the life science sector:

 Calico, founded in 2013, performs research and development in biotechnology, with studies on the ageing
process and age-correlated diseases and illnesses;

Apple Over the past few years, Apple has strengthened its
business in life sciences by applying its advanced technological know-how to the medical sector. The Californiabased corporation has developed products such as articles
of clothing made with ‘smart’ high-tech fabrics that canmonitor the health of the wearer, by measuring variables
such as temperature, blood pressure and heart rate. The
Apple Watch makes use of such technology.

 Verily Life Science, set up in 2015 under the name

Another medical application Apple is pursuing involves
taking advantage of the huge pool of iPhone users. In
2015, the company launched ResearchKit, a platform designed for clinical trials (mPwer enabled, in this way, thelargest ever study on Parkinson’s disease to be conduct-

The amount of resources Google is allocating to start-ups
like these clearly shows that Google sees life science as animportant sector. Its investment fund Google Venture has
300 companies in its portfolio, with a combined equity
value of €4.5 billion.

Google Life Science, performs life science research,especially with the aim of developing solutions to compile and collate healthcare data and analyses;

 DeepMind, established in 2010 and acquired by Google
in 2014, works on artificial intelligence applications forthe medical sector, specifically AI solutions to preventand fight diseases.

58

INDUSTRY OVERVIEW

MAIN TRENDS
AMAZONThe American e-commerce leader has intensified its initiatives in the life science sector over the past few years.

facilitate the development of new drugs and clinical
trials among pharmaceutical and biotech companies;

conduct experiments in genomics, with automatedanalytical processes.

As far back as 1999, Amazon had already made its firstattempt to penetrate the medical sector, by taking overthe pharmaceutical e-commerce business Drugstore.com.
In 2018, the company acquired another online drug retailer, PillPack. Then in 2019, Amazon announced a new joint
venture with JPMorgan Chase and Berkshire Hathaway toestablish a non-profit healthcare company called Haven.
Amazon also offers I-Cloud services (Amazon Web Service) to:

improve the use of information about healthcare providers and buyers;59

INTERNATIONAL PERSPECTIVE

60

INTERNATIONAL PERSPECTIVEINVESTMENTS
GLOBAL VENTURE CAPITAL INVESTMENTS IN LIFE SCIENCE
According to CB Insights, global investments in venture capital in the life science industry reached €60 billion in 2018,
which is 50% more than in 2017 and 93% more than in 2016. Digital businesses, amidst an intense digitalisation process inthe healthcare sector, are driving this growth in life science investments. However, only 9% of the 2018 venture capital investments in life science were made in Europe; the leading continent in this regard is North America.

GLOBAL VENTURE CAPITAL INVESTMENTS IN
THE LIFE SCIENCE SECTOR, 2016-2018

GEOGRAPHICAL BREAKDOWN OF GLOBAL VENTURE
CAPITAL INVESTMENTS IN LIFE SCIENCE, 2018€ bn

2018: 100% = €60 bn

Source: Cerved-Databank illustration of data from CB Insights, 2019 and Technology Forum 2019, Life Science, Ambrosetti61

INTERNATIONAL PERSPECTIVEINVESTMENTS
ITALIAN VENTURE CAPITAL AND PRIVATE EQUITY INVESTMENTS IN LIFESCIENCE, 2018
Life sciences (including the biotech and medical sectors) received the highest number of investments in venture capital andprivate equity in 2018. The amount invested was €892 million, which is 58% of the total value invested in high-tech businessventures. Therefore, the life science sector can be regarded as one of the most attractive high-tech sectors for venture capital and private equity investors.

LIFE SCIENCE: NUMBER OF VENTURE CAPITALAND PRIVATE EQUITY TRANSACTIONS IN THE
BIOTECH AND PHARMA SECTORS IN ITALY,
2014-2018

LIFE SCIENCE: NUMBER OF VENTURE CAPITALAND PRIVATE EQUITY TRANSACTIONS IN ITALYBY BUSINESS SECTOR, 2018
(N)

Source: Cerved-Databank illustration of data from Technology Forum 2019, Life Science, Ambrosetti62

INTERNATIONAL PERSPECTIVEINVESTMENTS IN ITALYINVESTMENTS IN ITALY: R&D EXPENDITURE
In Italy, the amount invested in research and development in the life science macro-sector can be broken down as follows: €1.65 billion in 2018 in the pharmaceutical sub-sector (vs. €1.53 billion in 2017);
 €2.26 billion in 2018 in biotechnology (vs. €2.06 billion in 2017);

 €2.20 billion in 2017 in medical devices (latest data available).
At the global level, total R&D expenditures in the sector reached €179 billion in 2018 including pharmaceuticals and biotechnology. This figure is forecast to increase consistently, with aggregate expenditures for the five-year period from 2019
to 2024 expected to surpass one trillion US dollars.

GLOBAL R&D INVESTMENTS BY THE BIOTECH AND PHARMA SECTORS, 2012-2024
billion USD

Source: Cerved-Databank illustration of Evaluate Pharma Report 2019 numbers
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INTERNATIONAL PERSPECTIVEINVESTMENTS IN ITALYFOREIGN DIRECT INVESTMENT
According to the Research on Investments rankings, Italy was among the top 30 “best countries for business” in 20182019. Looking at the OECD’s 2018 figures on foreign direct investment (FDI), inward FDI stocks for the pharmaceutical sector (economic activity category “Manufacture of basic pharmaceutical products and pharmaceutical preparations”)
amounted to €6.914 billion, accounting for 1.9% of the country’s total inward FDI stocks. In terms of new FDI inflows in thepharmaceutical industry in 2018, these made up 7.1% of all FDI inflows in manufacturing sectors.

ITALY'S INWARD FDI STOCKS(a), 2018
€ mn, %

Sector2018% of total

97,059

26.1

6,914

1.9

Other sectors

275,368

73.9

Total

372,427

100.0

Manufacturingof which:
Manufacture of basic pharmaceutical products and pharmaceuticalpreparationsa) FDI positions are total stocks directly held at the end of the period
Source: Cerved Group illustration of OECD data64

INTERNATIONAL PERSPECTIVEINVESTMENTS IN ITALYFOREIGN DIRECT INVESTMENT
With regard to FDI income stemming from the “Manufacture of basic pharmaceutical products and pharmaceutical preparations” sector, this figure reached €745 million in 2018.

ITALY'S INWARD FDI INCOME, 2018
€ mn, %

Sector2018% of total

Manufacturing

5.998

34,8

745

4,3

Other sectors

11.215

65,2

Total

17.213100,0of which:
Manufacture of basic pharmaceutical products and pharmaceuticalpreparations

Source: Cerved Group illustration of OECD data
65

INDUSTRY OVERVIEWINVESTMENTS IN ITALY
FOCUS ON THE PHARMACEUTICAL SECTOR: FOREIGN-OWNEDCOMPANIESCOMPOSITION OF SHARE CAPITAL OF PHARMACEUTICAL COMPANIES IN ITALY, 20182018:100% = 291

In the Italian pharmaceutical sector, the majority (59%) of
the businesses active are foreign-owned, with the other
41% Italian-owned. These foreign-owned companies tend
to be highly export-intensive, with 90% of their total revenue
coming from exports (compared to 71% among Italianowned pharma companies).
Other key characteristics of the Italian pharmaceutical industry are:

 It is 1st among the major European countries in terms ofthe number of corporations resident in Germany and inUSA.

 It is 2nd among the major European countries in termsof the number of corporations resident in France, Switzerland and Japan.

 It is a global hub of vaccine production, with many UKowned businesses.

Source: Cerved Group illustration of Farmindustria data

All foreign-owned pharmaceutical companies operating in
Italy play a significant role in terms of employment numbers, sales abroad and investments.
66

INDUSTRY OVERVIEWINVESTMENTS IN ITALY
FOCUS ON THE BIOTECH SECTOR: FOREIGN-OWNED COMPANIES
According to Assobiotech, only 11% of the biotechnology companies active in Italy are foreign-owned, with most of themfocusing their business on human health. Despite this, the sales generated by foreign-owned biotech companies amountto two-thirds (66.7%) of the national total, with the other third generated by Italian-owned companies being more skewed
towards the environmental and industrial applications segment.

BIOTECHNOLOGY: NUMBER OF ITALIANOWNED AND FOREIGN-OWNED BUSINESSESIN ITALY, 2019

BIOTECHNOLOGY: SECTOR REVENUE BREAKDOWN BY OWNERSHIP NATIONALITY, 20182018: 100% = €12.1 bn

2019: 100% = 696

Source: Cerved Group illustration of Federchimica-Assobiotech data67

INTERNATIONAL PERSPECTIVEINVESTMENTS IN ITALYPATENT SCENARIO – IN ITALY AND GLOBALLY
Italy is among the top ten countries for the most life science patent applications submitted. Submissions by Italian applicants to the European Patent Office rose for the fourth consecutive year, a clear consequence of rising investments in research and development. The medical sector is the number one field for European patent applications, and experienced a 5%
increase in the number of applications from 2017 to 2018.
The medical device/technology area is more prolific for patents than other areas of life science, and saw a 5% year-on-yearincrease in 2018. Meanwhile, pharmaceuticals (7,441 applications, +13.9%) and biotechnology (6,742, +12.1%) were respectively the 7th and 8th leading sectors in terms of patent applications. Combining all three life science sub-sectors, a total of
27,978 patent applications were filed from Italy in 2018.

THE TOP TEN SECTORS FOR PATENT APPLICATIONS, 2018
(Number of applications)

Source: Cerved-Databank illustration of European Patent Office data68

INTERNATIONAL PERSPECTIVEINVESTMENTS IN ITALYLife science can be considered a major patent-yielding field. Medical technology in particular is the area where the mostpatents have been requested for the last ten years running. By individual country, Germany has been the most prolific in Europe, although the United States is the global leader, far ahead of any other country with 10,145 applications submitted in
2018. Italy comes in 12th place with 502 life science patent applications filed. A notable new entrant is China.

LIFE SCIENCE PATENT APPLICATIONS BY COUNTRY, 2018
(Number of applications)

Source: Cerved-Databank illustration of European Patent Office data69

INTERNATIONAL PERSPECTIVEINVESTMENTS IN ITALY
In the medical technology segment, Italy submitted thefourth most patent applications in Europe in 2018 with
246, an 11.2% year-on-year decrease.

PHARMACEUTICAL PATENT APPLICATIONS BY
COUNTRY, 2018
(Number of applications)

MEDICAL TECHNOLOGY PATENT APPLICATIONSBY COUNTRY, 2018
(Number of applications)

BIOTECHNOLOGY PATENT APPLICATIONS BY
COUNTRY, 2018
(Number of applications)

Source: Cerved-Databank illustration of European Patent Office data70

INTERNATIONAL PERSPECTIVEINVESTMENTS IN ITALYIn terms of the number of patents awarded around theworld in 2018, there were 16,453 in the life science sector,
which is 8.8% more than in 2017. The success rate (ratioof patents awarded to applications) was 58.8%.

PATENT SUCCESS RATE IN LIFE SCIENCE: TOP FIVE
COUNTRIES, 2018(% of patent applications approved)

Italy’s success rate in patents overall is second in theworld behind France, and its success rate is number one
in the world in life science. This is evidence that Italy’s
scientific research in the field is extremely high in quality.
Italy’s patent success rate is 82.1% in medical technology
and 80% in pharmaceuticals, although it falls to 51% in
biotechnology.
With regard to publications and clinical trials, Italy occupies the top spot in the world in terms of publications per
researcher.

Source: Cerved-Databank illustration of European Patent
Office data71

INTERNATIONAL PERSPECTIVEINVESTMENTS IN ITALY
By raw number of publications, Italy is:

1st in Europe, 2nd in the world in ageing theories



1st in Europe, 2nd in the world in endocrinology



1st in Europe, 2nd in the world in haematology



1st in Europe, 2nd in the world in urology



2nd in Europe, 3rd in the world in cardiology and cardiovascular medicine

2nd in Europe, 3rd in the world in dermatology



2nd in Europe, 3rd in the world in nephrology



2nd in Europe e 4th in the world in pharmaceuticals



2nd in Europe e 4th in the world in oncology



3rd in Europe, 4th in the world in immunology

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INDUSTRY ACTRACTIVENESS73

INDUSTRY ATTRACTIVENESSINDUSTRY ATTRACTIVENESSRADAR, 2020(a)sub-sector, which fosters increasing concentration within
this market. The potential for new businesses to penetrate
the other two sub-sectors is also relatively low. Investments are highly concentrated among the major companies already active in the sector.

BARGAINING POWER OF SUPPLIERSa) The smaller the area between the five points, which represent attractiveness factors, the more attractive the sector is for business.

THREAT OF NEW ENTRANTS
The likelihood of new entrants is low due to significant barriers and large investments required to become competitivein the sector. Further challenges for new contenders include
complex regulatory issues that govern the pharmaceutical

In pharmaceuticals, suppliers include pharmaceutical companies themselves, so threats to operating margins fromsuppliers is low in this area. In the medical devices sector,
though, suppliers have medium bargaining power on balance, and it is actually higher against Italian firms thanagainst multinationals that operate in Italy due to the factthat the latter have vertically integrated their production
processes. Finally, suppliers that manufacture more sophisticated instruments enjoy higher bargaining power thanthose that provide raw materials.

74

INDUSTRY ATTRACTIVENESSINDUSTRY ATTRACTIVENESSRADARBARGAINING POWER OF BUYERS
Government policy, medical opinion and pharmacist recommendations significantly influence demand for pharmaceutical products. In the medical devices sub-sector,
public sector clients have strong bargaining power throughcentrally organised tender processes for all the public hospitals belonging to entire regions or cities. It should also be
noted that public health service institutions continue to
pay their bills very slowly. The average days sales outstanding (DSO) in the sector in Italy is well above the European average. Procurement procedures initiated by private
healthcare institutions tend to be much simpler; these clients have medium to high bargaining power.

companies to offer hefty discounts in order to win important supply contracts or to avoid losing clients thatbring in high sales figures. In the pharmaceutical sector,
pricing is a big factor for generic drugs given that for eachprescription drug, a uniform standard sale price to the end
customer is established for the entire country. Internationalisation activities are ramping up through mergers andjoint ventures.

THREAT OF SUBSTITUTE PRODUCTS
It is low and immaterial in the medical devices segment. In
pharmaceuticals, online sales platforms (although these
are relatively underdeveloped in Italy) do pose a threat.

RIVALRY AMONG EXISTING FIRMS
Competition is intense on the whole, and especially high inthe medical devices sector. Manufacturers compete chiefly over prices, with commercial pressures forcing some75

INDUSTRY ATTRACTIVENESSOPPORTUNITIESTECHNOLOGICAL INNOVATIONSAND DIGITAL HEALTH
The continuing digitalisation of the healthcare system is
encouraging businesses in the sector to invest more deeply in digital technology. Advances such as artificial intelligence, big data, automation, 3D printing, cloud computing
and blockchain allow huge sets of data to be generated
and analysed promptly and effectively in order to determine appropriate treatments in ways not thought possible
until recently. These innovations can also make the processes of clinical research, pharmaceutical manufacturing
and personalised treatment plans run more efficiently.

should simplify the medical care experience for all
citizens and help eliminate the errors associated with
Italy’s traditional handwritten “red slips”. Digital prescriptions will also make it easier for the health service
to carry out its prescription monitoring activities.



Telemedicine: this is a remote monitoring service especially for patients with chronic illnesses, with the possibility of remote assistance by healthcare professionals.

The main ongoing developments in digital health are as
follows:Electronic healthcare folders: in order to eliminate or
reduce the need for paper records, the basic information and medical records of each citizen are placedin a single electronic folder that can be accessed byhealthcare institutions. With version 2.0 of this programme, big data and artificial intelligence solutions
can be used to process the data.

Electronic prescriptions: prescriptions in digital format
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INDUSTRY ATTRACTIVENESSOPPORTUNITIESHIGH DEMAND FOR COVID TESTSThe global Covid-19 pandemic, which broke out in Italy in
February 2020, has inevitably given companies that operate in the life science sector a major short-term opportunity. For pharmaceutical and biotech businesses, it is in theform of intensive research to find effective treatment and avaccine against the virus, while companies that manufacture diagnostics products and other medical devices haveseen extremely strong demand for molecular test andblood test kits that can detect Sars-Cov-2. Since May 2020
there has been a spike in demand for molecular tests
needed to detect the Sars-Cov-2 genome in nasal secretions or in other respiratory system material, as well as forblood tests that detect antibodies.

77

INDUSTRY ATTRACTIVENESSOPPORTUNITIESGROWING EXPORTS

AGEING POPULATION

Pharmaceutical companies that operate in Italy are characterised by high export intensity: 71% of Italian-owned
pharmaceutical companies’ sales stem from exports, andthat proportion rises to 90% among foreign-owned companies. Pharmaceutical exports have been growing constantly over the past several years. The prospect of continually
increasing sales abroad of medicines and other pharmaceutical products certainly constitutes an opportunity for
growth in the short to medium term. According to Farmindustria, the EU-28 is currently the geographical area towhich the majority of Italian-made pharmaceuticals areexported, accounting for 56.8% of the total. The countries
that import the most Italian pharma products are Belgium,
Germany and France. Demand from countries outside theEU grew by 7.5% year-on-year in 2018 to reach the remaining 43.2% of total exports, with a sharp 21.7% increase in exports to east Asia.

As the average age of the global population continues torise, age-related illnesses and conditions are also bringing
about considerable opportunities for business growth in
the life science sector. In developed/industrialised countries especially, the elderly (over-65) population is rising,accompanied by a constant increase in chronic and/or
degenerative diseases. As life expectancy increases andthe ratio of economically active to inactive citizens decreases, the socioeconomic burden of health and social
care and pension payments to the elderly population will
also continue to increase. In this regard, Italy is particularly
influenced by this trend, having the highest life expectancy
in Europe with over two million people over 85 years old
and a record-breaking 14,456 centenarians living in the
country as of 2019, 84% of whom are women.

The medical devices and biotechnology sub-sectors havealso witnessed growing demand from abroad, creating animportant opportunity for higher sales figures in the short
to medium term.

In this context, the pharmaceutical industry is called upon
to provide new drugs and new treatment solutions to face
the growing portion of the population affected by chronic
illnesses.

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INDUSTRY ATTRACTIVENESS

CRITICAL SUCCESS FACTORSINVESTMENTS IN R&D
Growing investments in research and development of newtechnology, particularly in view of the ongoing health service digitalisation process, constitute a critical successfactor for life science companies. Innovative technology
helps companies improve their performances on the market by upgrading their products and making their production process more cost-efficient.

intelligence, telemedicine and electronic medical records.
Specifically, the diagnostic imaging and laboratory analysis segments are the two areas in which R&D investmentswith digital aims have spread fastest.

Especially in the pharmaceutical and biotechnology sectors, the amount of resources devoted to research projects is a significant distinguishing competitive factor –and this also has important effects on improvements inhuman health.
Scientific and technological developments are enabling
pharmaceutical companies to make great progress inboth R&D and enabling biotech companies to develop andproduce more advanced therapies.
Investments are ramping up especially in digital technology, amidst the ongoing health service digitalisation, withthe major investment projects relating to big data, artificial
79

INDUSTRY ATTRACTIVENESS

CRITICAL SUCCESS FACTORSIn recent years, system-wide expenditure on digital health innovations has been growing: healthcare institutions spent€970 million on digital technology in 2018 alone, according to the Milan Polytechnic University’s “Digital Innovation in
Healthcare Monitor”. This shows how using digital technology to make the national health service more efficient has taken
on a strategic role in the sector.
Furthermore, pharmaceutical companies are to an increasing extent also providing services in addition to supplying products.

80

INDUSTRY ATTRACTIVENESS

CRITICAL SUCCESS FACTORSNEW BUSINESS MODELS, NEW SKILLS
New product technologies and innovative production processes require companies to possess new skills, particularly inthe digital domain (e.g. AI and big data), and even to develop new business models. In such a highly dynamic market context, it is no longer sufficient to develop these skills internally (though this is still important). Instead, companies need tochange their business models to accommodate interdisciplinary and inter-sector cooperation and partnerships, especiallyon an international scale. Partnerships have thus become a significant distinguishing factor for production performance
improvements.
In addition, Italy’s position as the leading pharmaceutical manufacturer in Europe can be attributed to its robust, consolidated manufacturing structure in the sector featuring specialised know-how and high human resource productivity levels.
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INDUSTRY ATTRACTIVENESS

CRITICAL SUCCESS FACTORSORGANISATIONAL CAPABILITIESINTERNATIONALISATION

Given Italy’s leadership in pharmaceutical production in
Europe, it is important for companies active in the sector
to optimise their production processes by containing
costs and keeping flexible organisational structures. In theinterest of sustainability, it has also become important forpharmaceutical companies to adopt ‘green’ practices andadapt their production processes so as to reduce theirimpact on the environment. The production of pharmaceutical products does in fact have a significant impact on
the environment; however, Farmindustria points out how
Italian pharma companies have distinguished themselvesby paying close attention to environmental issues, making
commitments towards sustainability and social and competitive responsibility. Many companies are investing in‘clean’ technologies, in the form of production equipmentthat eliminates or reduces harmful environmental effects.
To sum up, the Italian pharmaceutical sector enjoys ahighly competitive position thanks to efficient organisational structure combined with an attentiveness for environmental sustainability.

Given the sector’s high export intensity, extensive international business activities – whether through partnerships,
joint ventures or ‘strategic alliances’ with foreign companies and institutions – are a key success factor. Internationalisation is indeed a significant driver for growth in the
sector. It is also very common among companies in the
sector to penetrate foreign markets by establishing commercial subsidiaries in countries where there is high demand for distribution of their products. Finally, mergers
and acquisitions are regularly pursued as a way of gaining
market shares on an international scale.

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REFERENCES
Assolombarda, La rilevanza della filiera Life Science in Lombardia: Benchmarking tra regioni italiane ed europee, 2018
Assolombarda, La rilevanza della filiera Life Science in Lombardia: Benchmarking tra regioni italiane ed europee, 2017
Confindustria Dispositivi Medici, L’industria dei Dispositivi Medici in Italia, 2018
European Patent Office (EPO), Annual Report, January 2019
Farmindustria, Indicatori Farmaceutici, July 2019
Farmindustria, Indicatori Farmaceutici, July 2018Federchimica-Assobiotech, Le imprese di Biotecnologie in Italia, Report 2020
Federchimica-Assobiotech, Le imprese di Biotecnologie in Italia: aggiornamento congiunturale 2019Federchimica-Assobiotech, Le imprese di Biotecnologie in Italia, Report 2018Federchimica-Assobiotech, Le imprese di Biotecnologie in Italia: aggiornamento congiunturale 2017

The European House, Ambrosetti, Il Ruolo dell’Ecosistema dell’Innovazione nelle Scienze della Vita per la crescita e la competitività dell’Italia, Technology Forum 2019
The European House, Ambrosetti, Il Ruolo dell’Ecosistema dell’Innovazione nelle Scienze della Vita per la crescita e la competitività dell’Italia, Technology Forum 2018
The European House, Ambrosetti, Il Ruolo dell’Ecosistema dell’Innovazione nelle Scienze della Vita per la crescita e la competitività dell’Italia, Technology Forum 2017
The European House, Ambrosetti, Il Ruolo dell’Ecosistema dell’Innovazione nelle Scienze della Vita per la crescita e la competitività dell’Italia, Technology Forum 201683

www.ice.it

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ITA - Italian Trade Agency@itatradeagency

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