European Pharmaceutical Industry Outlook 2018

Strong potential persists for suppliers in the European pharmaceutical industry in 2018

Protel tracks capex project activity across the main process sectors to help suppliers win new business. In this article we aim to present a quick and easy to digest run-down of the main trends and developments in a highlighted sector of the process manufacturing industries in one of our covered regions – the UK pharmaceutical industry. For more information on the areas we cover, click here.

In our last article we wrote about how the European pharmaceutical industry had a positive outlook ahead. While the outlook for the UK is still looking rather complex, the picture for the regions of France, Belgium and the Netherlands has remained largely positive.

When focusing in on European pharmaceutical & biotech, the data from our capex project database shows that overall investment levels are very buoyant. Confidence in the market is high with general sentiment positive and compared to the previous period the level of investment remains very high. However,the picture in each country has changed slightly.

We are still seeing the vast majority of projects reaching sanction, where in the UK pharmaceutical investment is slightly more likely to be placed on hold while plans are reviewed, we are seeing much less uncertainty affecting the pharma/biotech markets in France, Belgium and the Netherlands. There seems to be little evidence that this trend will change in the coming year and should persist into 2019.

Engineering houses are generally very busy with work – many larger players are now setting minimum scheme sizes to prioritise workload. This represents significant opportunity for small and medium size companies, as going forward we see an average potential project value of between €11-15m across France, Belgium and the Netherlands.

Trends & Opportunities

As before, animal health and blood products remain stand-out trends across the three regions, with much planned investment catering to these product types.

A slipping deadline for serialisation authentication processes to be implemented in the EU (now February 2019, though there may be leeway) means that there is still potential for suppliers in the areas of track & trace, serialisation and traceability in pharmaceutical packaging. Most large manufacturers of pharmaceuticals have implemented plans to be compliant. As such, many smaller organisations still need assistance to meet required standards – this is an area of significant opportunity for suppliers of solutions throughout 2018/19.

Our Coverage

The Netherlands

On our MyProtel project search engine we are currently tracking:

• 88 active pharma/biotech & laboratory projects;
• with a combined potential investment value of €1.36bn;
• an average project value of over €15m.

Compared to the previous period, the average project value and overall potential investment value has increased – this corresponds with a lower number of individual schemes. We’re seeing more, larger scale pharma/biotech investment in the Netherlands on average in 2018/19.

Major investors in 2018 include:

• MSD Animal Health – €501m;
• Nutricia Cuijk – €240m;
• MSD Oss – €120m;
• Sanquin Blood Supply – €87m;

Belgium

On our MyProtel project search engine we are currently tracking:

• 115 active pharma/biotech & laboratory projects;
• with a combined potential investment value of €1.32bn;
• an average project value of over €11m.

Belgium has remained largely static compared to the previous year, with a slight drop in both number of projects and total value, there is however still a huge amount of potential for suppliers as we move from 2018 into 2019 in the Belgian pharmaceutical and biotech sectors.

Major investors in 2018 include:

• UCB Pharma – €208m;
• Zoetis Belgium – €140m;
• Pfizer Belgium – €120m;

France

On our MyProtel project search engine we are currently tracking:

• 213 active pharma/biotech & laboratory projects;
• with a combined potential investment value of €2.84bn;
• an average project value of over €13m.

Upcoming investment levels in France have remained very consistent since we published our previous article covering pharma/biotech investment. The shape of the investment is still skewed much more toward smaller to medium size project schemes, as a greater number of new or spin-out companies start to plan capex for the coming year, often using in-house design resource.

Major investors in 2018 include:

• Sanofi-Pasteur – €487m;
• LFB Group – €410m;
• Les Laboratoires Servier Industrie – €286m;

Conclusion

On the whole confidence persists strong across the three countries (see more about our coverage here). Investment levels are very buoyant among both large organisations and smaller producers across a diverse range of project schemes. The picture has shifted slightly from last year in France, Belgium and the Netherlands as we move toward 2019.

Where previously we were seeing activity concentrated heavily in larger sites, this is really only still the case in the Netherlands and Belgium, whereas in France we are seeing a much more diverse range of project schemes among a more varied manufacturing landscape.

As with last year, there remains a great deal of potential for suppliers of capital equipment and project services across the pharmaceutical industry in France, Belgium and the Netherlands. Uncertainty that we’ve seen impacting the pharmaceutical landscape in the UK has not had much impact at all on the plans and capex of manufacturers across the countries concerned.

This means that suppliers based in the UK or Ireland could do well to investigate how they can solve challenges (particularly around packaging & track & trace) for small and medium size organisations operating in the European pharmaceutical industry.

For more information on any of the organisations, projects or trends covered, including key information required to target specific projects, please contact us.