Back to blogs

Launch or License: Taking Your First Product to Europe

Posted on July 2019

Blog Img

​For many emerging US-based biotech companies, taking their first product to Europe is a daunting prospect. Directly launching abroad is a difficult path, with many companies deciding to out-license rights for that territory instead. While doing so cuts down risk, it typically reduces profits and inhibits the potential to create a global brand and market strategy; companies often give away 65-70% of the asset value. While contractual terms such as “Best Efforts” may help, unlike objective performance measures, such standards are highly subjective, and their interpretation will differ significantly from jurisdiction to jurisdiction – meaning there is no guarantee that the licensee will treat the product as a priority.

On the other hand, although Europe is often seen as a single market, in practice its individual member states are highly diverse. ‘Going-it-alone’ inherently occurs more risk and expense than partnering with a licensee. Each country has its own regulations for local distribution, supply chain management, commercial and medical affairs, quality and pharmacovigilance. Take regulatory translation, as an example. While 51% of European adults speak English, there are 23 other official languages that must be considered. Pharmaceutical companies manufacturing with the EU must make translations of the Summary of Product Characteristics (SmPC), the Patient Information Leaflet (PIL) and the packaging and labelling texts available. Companies only have 5 working days to submit initial translations after marketing authorisation and 20 days to provide their final publishing format.

So, why bother launching directly? Because doing so is the next logical step to becoming a global biotech company with a solid commercial footprint. While austerity measures have resulted in growing pricing pressures and restricted market access for pharmaceutical products, the EU5 market continues to represent 17% of the global market for branded pharmaceuticals (i.e. France, Germany, Italy, Spain and the United Kingdom). Emerging markets present a ripe opportunity that should not be overlooked, but BRIC countries (Brazil, Russia, India and China) continue to account for around 7%. BRIC populations are also highly distributed, making physical access and promotion difficult and expensive. 

"Europe and the US dominate the global biotech market," says Zach Stamp, Director of EPM Scientific, "This trend is not likely to change... Traditionally, biotech companies have sought to be acquired by, or partner with, large pharmaceutical companies. However, this model is changing. Now companies may have more success going straight to market in Europe." 

Directly launching a product in Europe can add significant value. Launch companies outperform their licensing peers. In an analysis of historical stock price over a two-year period, beginning one year prior to European Medicines Agency (EMA) approval through one-year post-approval, the majority of launch companies saw positive impact on share prices. Over the two-year period, they had an average share price increase of 48%. However, the range was considerable from -117% to 205%, highlighting the potential risk of direct launch. In comparison, for companies that out-license European right to a partner their share prices increased on average by 2% but their performance was also wide ranging from -78% to 193%. 

For the right asset, great risk comes with great reward. In the words of Francios Nader, former CEO of NPS Pharmaceuticals, “Virtually all the companies that made it big historically, made it on their own. You think of Genzyme, you think of BioMarin, you think of ViroPharma: they were the masters of their own destiny and it worked very well for them.” 

How to avoid talent pitfalls during expansion

From our experience of helping clients build senior teams in Europe, we understand the key talent pitfalls that should be avoided to ensure products reach the market. In particular, a lack of brand awareness can be a significant obstacle to attracting the best talent immediately. A small US biotech company may be well known domestically, but not among potential European recruits. As recruitment specialists, we help our clients create a strong Employer Value Proposition (EVP) and act as brand advocates to secure the best talent available in the region. If you are a US biotech company considering a European launch let us help you find the right connections. Get in touch today

"When we met the EPM Scientific team, we found what we were looking for but more importantly we found a company that shares the same entrepreneurial spirit, can do attitude and pragmatism that we have at iQone. I am happy to recommend EPM as a partner for every company looking to expand their reach in Europe." – Michele Genini, Chief Operating Officer, iQone Healthcare Group


EPM Scientific is a leading specialist recruitment agency for the Life Sciences industry. We were founded in 2012 to give companies and candidates peace of mind that the recruitment process is in experts hands. Today, we provide contingency, retained search and project-based contract recruitment from our global hubs in London, Berlin, Switzerland, New York and Chicago.

We pride ourselves in keeping our professional network up-to-date with any changes that will shape the future of work or affect the hiring process. Visit our website to discover more invaluable insights, including exclusive research, salary guides and market trends.

In this article