Analysis: Maturing Belgian biotechs outshine European peers

Thu Oct 4, 2012 7:40am EDT
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By Ben Deighton

BRUSSELS (Reuters) - From its base in a business park outside the city of Ghent, Belgium's biotech industry is attracting a global following, benefiting from years of patient investment, promising clinical trials and pharmaceutical companies' hunger for new medicines.

Syngenta SYNN.VX, the world's biggest agribusiness company, last month agreed to pay a whopping 70 percent premium for Belgian seed technology firm Devgen, fuelling share price gains across the sector that some analysts think can continue.

Biotech companies worldwide are seeing their shares boosted by hopes they will be the next takeover targets or drug deal partners for a pharmaceutical industry struggling with patent expiries and clinical trial failures.

But investors have been burnt many times before betting on small companies only for them to run out of money or see their biggest drug hopes fail before a buyer ever materializes.

In Belgium, some investors think they have found something different in companies like ThromboGenics (THR.BR: Quote), which has an innovative eye treatment poised to be launched in the United States, and Ablynx (ABLX.BR: Quote), whose ultra-small antibodies can reach parts of the body inaccessible to regular antibodies.

"I think people see good value in Belgium from abroad," said Stephen Bunting, managing director of life sciences investment group Abingworth, which owns a 9-percent stake in Ablynx and previously held shares in Devgen and another Belgian biotech company, Galapagos GLPG.BR.

"I would be fairly sure that some of the recent buying in Belgian markets has been driven from the (United) States," he added, highlighting the interest in the country's biotech industry from the world's biggest drugs market.

Shares in five Belgian biotech companies have risen by more than 20 percent over the past month - Devgen DEVG.BR (65 percent), TiGenix (G9U.BR: Quote) (60 percent), Ablynx (59 percent), Galapagos (29 percent) and IBA (IBAB.BR: Quote) (20 percent).   Continued...

A sign is seen at the Devgen headquarters in Ghent September 21, 2012. REUTERS/Laurent Dubrule