Lombardy is one of the motors of Europe’s pharmaceutical industry. Alongside Germany’s Rhineland and Baden-Württemberg, Île-de-France (Paris Region) and Spain’s Catalonia, the northern Italian region consistently ranks as one of the continent’s biggest sources of pharma manufacturing. 

This strength extends beyond just pharmaceuticals. Latest data from industry body Assolombarda puts Lombardy’s annual output across the full spectrum of life sciences sectors at €74.5bn, representing 13% of the region’s gross domestic product (GDP). According to Invest in Lombardy, there are some 1900 businesses operating in life sciences across the region.

Lombardy’s well-established life sciences manufacturing base is a reflection of its industrial heritage. Those trying to build its capital, Milan, into an equally powerful life sciences innovation hub say the surrounding manufacturing base has helped lay some groundwork. 

“The strong presence of major pharmaceutical companies [and] Lombardy’s industrial heritage plays a crucial role in supporting Milan’s effort to become more of a life sciences innovation hub,” says Fabrizio Grillo, president of Federated Innovation @MIND, a network spurring collaboration within Milan’s life sciences cluster. 

This industrial environment boosts Milan’s life sciences ambitions in two key ways. First, a number of pharma manufacturers are fostering start-ups and innovation “by establishing incubators, venture capital (VC) arms, and extensive research and development (R&D) programmes”, says Marina Izzo, CEO of Swiss medical device start-up EBAMed, which recently opened a branch in Milan.

Second, these manufacturers — along with Lombardy’s heritage of small and medium-sized enterprises (SME) across all industries — have helped build supply chains needed by the next generation of life sciences businesses to grow. 

Supporting start-ups

One local manufacturer growing Milan’s life sciences innovation ecosystem is Zambon. Founded in the Veneto region in 1906, the family-owned chemicals and pharmaceutical company transferred its headquarters to Bresso, in the northern outskirts of Milan, in 1961. “The family realised that to have an international presence, you must be close to a business city with easy connections to the rest of the world,” explains its CEO, Giovanni Magnaghi.

Zambon now operates in 23 countries, is active across the full pharmaceutical value chain from R&D to manufacturing, and continues to add new dimensions to its business. In 2000, it started expanding its Bresso site into a campus consisting of 30,000 square metres of offices and labs that now hosts more than 30 other life sciences companies from Italy and abroad. This year, Zambon launched the fifth edition of its open accelerator programme, which has a focus on femtech and received 185 applications from around the world.

Zambon invests up to €100,000 in each of the five winners — which come from Italy, Israel, the UK and Switzerland — and provides them with training and consulting. “If the acceleration programme goes well, we may also have an interest in bringing the product to the market through our global presence,” says Mr Magnaghi.

The company is also fostering start-ups by investing in life sciences VC funds. These include funds managed from Milan, but also those managed in the US which have more of a global focus. “We do this not just for financial return: it is more for the networking opportunity,” says Mr Magnaghi, adding that it provides an opportunity to approach portfolio companies regarding collaborations, entering licence agreements and even moving to Milan.

Another homegrown life sciences champion supporting Milan’s innovation ambitions is Bracco. Founded 97 years ago, the group focuses on diagnostic imaging and sells its products into some 100 countries. It works closely with the Milano Innovation District, and helped attract the likes of US-headquartered Illumina. “Innovation is a team effort,” says Bracco’s CEO Diana Bracco. “Today, even more than in the past, in order to ensure successful research ... can be translated into innovation for physicians and patients” it is necessary to pool experience and knowledge, and work without cultural barriers, she says. 

Tapping into supply chains

Beyond these direct efforts by pharma groups, the large network of SMEs operating across Lombardy also has the power to support Milan’s life sciences goals. SMEs provide the backbone of the region’s economy, which itself contributes some 20% of national GDP — more than any other region. 

“When you have the chance to find a good supplier at a [reasonable] price that is willing to work with you, and is within 50 or 100 kilometres, that is very useful” for building a life sciences ecosystem, says Alessio Beverina, a partner at Milan-based VC firm Panakès Partners. Lombardy has many SMEs [assisting] the life sciences cluster, he says, adding: “They can be strong support for building a pipe, a digital machine [or] a pumping system.”

Lombardy’s life sciences supply chain is further bolstered by Milan’s 19 research hospitals and large number of private health clinics, which attract patients from across the country, and businesses looking to supply them. Mr Grillo says the resulting supply chains are one aspect of northern Italy’s success in producing pharma, biotech and innovation. “[Milan is] lucky to have this ecosystem,” he adds.  

Over the past year, several foreign firms have made investments in and around Milan that further enhance these supply chains. Last October, German contract manufacturer Aenova announced €10m in fresh capital for its site in Carugate to expand its production of semi-solids and liquids for pharma and medical device companies. In August, US firm Singota Solutions opened a cold-storage logistics hub near Saronno to serve pharma clients. Meanwhile, in July, Silicon Valley-based biotech firm Alamar established its European headquarters and a distribution centre in Milan, citing its “robust infrastructure and central location” as key reasons behind its choice. 

These latest deals are indicative of the role that foreign direct investment (FDI) has played in advancing Lombardy’s life sciences ecosystem. Data from fDi Markets shows that €1.9bn worth of FDI projects have been announced in the region’s life science sectors since 2003. Some of the biggest life sciences names present in Lombardy include Switzerland’s Novartis and Roche, the US’s Boston Scientific and Medtronic, and France’s Sanofi. 

What is more, a global survey of 280 pharma and biotech executives conducted by life sciences event organiser CPHI in September found that Lombardy is the most attractive location in Europe to build a manufacturing plant, based on cost and access to talent. Indeed, there may just be even more FDI on the way. 

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This article is part of the Special Report:
Milan’s life sciences ascent
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