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The Low-Key Priority: Life Sciences R&D in the Czech Republic

The Low-Key Priority: Life Sciences R&D in the Czech Republic

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Life Sciences R&D has consistently been touted as one of the Czech government’s top priorities – and the markets and investors have not been indifferent. We reached out to several experts to check up on the overall health of life sciences R&D in the Czech Republic and learn how that priority translates into practice.

A Strong Academic Foundation

“The country has a strong tradition of academic excellence and research in life sciences,” as PRK Partners Partner Monika Maskova points out, “with Czech universities having a great international reputation and their research work being recognized, particularly, in molecular genetics, immunology, analytical and pharmaceutical chemistry and biochemistry, cardiology, neurology, metabolic diseases and, more recently, medical applications of nanotechnologies.” Glatzova & Co Partner Jiri Sixta also highlights “the deep tradition in the R&D area – from Professor Heyrovsky to Professor Holy and others making unique progress in various areas of life sciences.”

The Czech Republic maintains a high number of graduates in natural sciences (biology, physics, mathematics), Dubanska & Co Partner Barbora Dubanska explains, noting that the country is “doing quite well in attracting the prestigious European Research Council Grants, with an average of four awarded every year. We have the positive examples of Gilead and IOCB, with Charles University and some others also emphasizing the work of their tech transfer offices.” Maskova agrees, saying the high-quality education is supported by close ties between the academic community and the industry “supporting the translation of results from basic research into applications and commercial assets.” According to her, all this translates into “the availability of highly skilled university graduates and industry-specific staff, at a competitive cost.”

In Good Health

There are several positives on the business side as well. Czech life sciences R&D “has received a great deal of attention and support, in recent years, not only from academia but also from the public sector and, most importantly, from investors,” JSK Partner Tomas Dolezil notes. Dozens of companies of all sizes – including many young firms and start-ups – operate in this field, he says, “characterized by an extremely high innovation potential, an above-average number of projects successfully applied to the market, and the high added value of products and high pro-export potential.” Sixta agrees, saying he believes “the Czech Republic is more attractive for life sciences R&D than other CEE countries.”

Dolezil also highlights “the extensive experience in the sector,” with numerous companies “developing their own R&D and education departments.” As Dubanska notes, “local scientists and healthcare professionals are also keener to work with partners – on clinical trials or other projects – as low base salaries mean the extra income is well worth the added effort.”

“And we are quite efficient at running clinical trials,” Dubanska offers, “in terms of timeframes and costs, and we also have a national template for a clinical trial agreement, so less time needs to be spent on negotiations.” Manufacturers of medical devices cooperate with clinical workplaces, Dolezil notes, “both in the research and development of new devices and, later, in the application phase,” also improving the level of medical care.

Finally, Dubanksa also lists some solid supporting factors: “the relatively robust healthcare system, with a decent amount of spending; and the Czech Republic being relatively quick to adopt new medical devices and innovative medicines – both legally and from a mindset perspective.”

But Not Outstanding

Still, Dubanksa is adamant she “would not overestimate the Czech Republic.” While the country is doing well – it isn’t necessarily ahead of its CEE competitors: “We don’t do enough to support technology transfer and, comparatively, we don’t see that many spin-offs, as there’s not enough support or security for them to pursue the road of a biotech startup. Don’t get me wrong, we do have the highlights of Diana Biotechnologies or Oxygen Biotech – but there’s not really a number of those lining up.”

Looking across CEE, Dubanska says Poland is ahead on startups and has a bigger market. She notes that for Czech Zentiva, Poland has Polpharma – “with both companies looking into supporting startups. The Czech Republic also has the factories of Teva – but then Hungary has Gedeon Richter. And Austria’s Boehringer Ingelheim is doing very well, building a new research center, with Austria also boasting very good academics and results.”

Dolezil agrees, saying that the main challenges are “due to the absence of communication between government, university entities, and the commercial sector. Primarily, we still lack the legislative conditions for tech transfer, i.e., for the creation of an innovative environment for the establishment of spin-offs, start-ups, and cooperation with business.”

For Sixta, it’s still mostly a money problem: “while the funding is getting better,” he says, “we are still lacking massive private funding in this area.” We need more grants to fund R&D, Dubanska agrees, and “the money life sciences researchers get is peanuts – so that’s not conducive to more researchers joining the field.”

Lagging Legislation

When speaking about sector-specific challenges, Maskova says “the life sciences sector is highly regulated, with the legal framework often lagging behind the state of play.” This puts pressure on the companies’ ability to navigate complicated regulatory pathways, she says, noting that currently, “compliance issues occur particularly in connection with implementing new technologies and digitalization.”

Dubanska says this also leads to an imbalance in the market. “Most biotech startups focus on medical devices or AI and digitalization, with Carebot being a good example, and not necessarily on pure innovation – new molecules, drugs, or diagnostics – as clinical trials are still too complex and expensive for small operations. Streamlining clinical trials’ legal and administrative obstacles would go a long way,” she says.

Sixta highlights “the relatively effective patent protection system,” but says “its flexibility and the speed of the processes could still be improved,” with Dolezil adding that, “on both the local and European level, we would need to further develop the protection of intellectual property for early-stage research or open data.” New areas, such as “human resources and ethics in life sciences as well as the protection of the state’s security in research,” also face a lack of regulation and require support, according to Dolezil.

Just How Much of a Priority?

Maskova sums up the positives: “Public funding of over EUR 2.5 billion was allocated in the last decade to building research facilities,” she says, with Sixta pointing out the Czech government is providing significant subsidies, including to the Czech Academy of Sciences. “The government also provides investment incentives, to invest in R&D, employ researchers, and cooperate with universities and research institutions,” Maskova adds.

Dolezil agrees there is state financial support towards R&D in general, with funding for the Research, Development, and Innovation Council set to increase by 15% until 2025. Still, he points out, “that trend does not fully mirror the needs of the sector. We see a huge lack not only of direct financing but also of institutional support in general.” The high entry costs for life sciences R&D, “needing access to expensive infrastructure like research laboratories, is why additional government support is needed,” Dubanska points out.

Finally, she highlights the gap between data and action: “The demographics show the population getting older and sicker. With the current system, we’ll run out of money soon. We know it’s an important sector and we should pour more money into R&D, to facilitate the digitalization of healthcare and restructuring the system – shifting the focus to prevention rather than more expensive care.”

This Article was originally published in Issue 9.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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