Biotech, Italian-style

In December 2010, television presenter and voice actor Fabrizio Frizzi bounded up the pink and purple stage for his fifth stint as the host of Italy's annual Telethon for rare diseases. It was a good year for Frizzi—who reprised his role as the voice of Woody in the Italian Toy Story 3—and an even better year for the Fondazione Telethon's Institute for Gene Therapy in Milan.

The ink was still drying on GlaxoSmithKline's €10 million deal giving the institute the right to license a therapeutic for the life-threatening immune deficiency disorder ADA-SCID, along with options for six other diseases in the pipeline. "For us, it was a turning point," says Telethon's chief scientific officer, Lucia Monaco, "because it was the first agreement that we've been able to sign with a company to take over the production of a therapy for a disease."

Such international partnerships infuse much-needed cash into Italy's young but thriving biotechnology sector. Unlike other European countries that took a major hit from the financial crisis, Italy's economy was not as heavily leveraged and its biotechnology sector—primarily focused on human health—has been steadily growing, with annual revenues of €731 million, according to Ernst & Young's BioInItaly Report 2010.

"In Italy, our companies have been more solid from a financial point of view," says Alessandro Sidoli, president of the biotech industry association Assobiotec.

At the end of 2009, 187 small companies were focused on biotech, with 31 percent of their funding coming from venture capital and private equity. Between 2000 and 2008 clinical trials increased by 51 percent. Sidoli points out that all this growth is happening despite the fact that Italy has some of the least attractive biotechnology tax incentives in the region, amounting to just 10 percent of a company's R&D investment, compared to 50 percent in France, Germany and the U.K.

In spite of that handicap, Assobiotec is making headway in encouraging international investors. The group has joined forces with biotechgate.com to help investors find local partners, products and technologies in a variety of sectors. "We just entered into this agreement, and we will see how it works," Sidoli says.

Sidoli's own company, Axxam, recently partnered with Fast Forward, an initiative of the U.S. National Multiple Sclerosis Society, which seeks to speed commercial development of new treatments. Tim Coetzee, Fast Forward's chief research officer, says Axxam's research holds promise for shutting down the immune cells that attack the nerves in multiple sclerosis, and the pancreas in juvenile diabetes. "These guys are pros, and it has been a pleasure to work with them," Coetzee says.