Biotech sector in the Baltic states: 11 years after joining the EU - have dreams come true?

Author: Pavel Guzanov, University of Oxford


When the official EU membership negotiation kicked off in 2000 in the three Baltic states – Estonia, Latvia and Lithuania – there were a lot of talks predicting a vibrant future for biotech sector in those countries. During the Soviet period the Baltic region was converted into one of the Soviet hi-tech flagships. Even though most of the industry did not survive long after the countries´ independence in 1991, there remained a good number of well-educated and highly-skilled professionals. In addition, the education system was still producing new generation of potential science experts. It was only the funding which was not there. Hence, it was thought that investments and funding from Europe would allow biotech sector to take off, once the Baltic states became part of the EU. Now, eleven years after joining the EU, what can be concluded?


Latvia probably had the biggest advantage in becoming the biotech stronghold of the Baltics, since it inherited the most developed biopharmaceutical industry in the region. Indeed, the two biggest pharma companies in the Baltic states – Olainfarm and Grindex – are from Latvia. But they are remains of the Soviet heritage that miraculously survived the turbulent 1990s. And what about new small companies and start-ups? The situation is not as great as it was predicted back in early 2000s. There are only a modest number of small life science companies, such as Biosan, which provide services in biochemistry and microbiology, and similarly, a quite widely advertised clean technology cluster CleanTech Latvia has not resulted anything noticeable yet (the news feed on their website has not been updated since 2011). The only rising star appears to be Conelum, a biotech startup that was founded upon securing a €200k investment in 2012. The company provides fast microbiological diagnostic tests for food and drink industry companies using their own technology EloKIT.


The situation with start-ups in Estonia is more cheerful. That is absolutely unsurprising, considering that this is the home country of Skype. In 2003, the Estonian Connected Health Cluster was founded as an umbrella organisation for an over a dozen of small biomedical companies and start-ups. One of the companies that definitely worth mentioning is Cellin Technologies, which provides services in regenerative medicine and cell therapy. Few months ago it started production of melanoma cell lysate, the critical raw material necessary for the MelCancerVac - the DanDrit Biotec colorectal cancer vaccine. Asper Biotech is another successful small company, which provides oncogenic tests and has several partnerships both in Europe and US. Finally, it’s also worth mentioning Protobios, a small company providing immunome analysis services, which has secured several contracts for characterisation of the cancer molecular markers and the regulatory mechanisms involved in melanomas.


Lithuania is probably the Baltic champion in terms of biotech start-ups and small companies - at least it seems so at the moment. Companies Sicor and Fermentas – spin outs from the Lithuanian Institute of Biotechnology – successfully specialised on recombinant enzyme production until their acquisition by Teva and Thermo Fisher Scientific respectively. Upon acquisition both sites were maintained and operate up till now. Another successful Lithuanian biotech company – ProBioSanus – produces probiotic based cleaning and personal care products. It has already entered Scandinavian and Israeli markets. Lithuania has also organised several Life Sciences Baltic exhibitions – the largest biotech exhibition in Baltic region that attracts international attention and clearly indicates their national interest in biotech.

All three countries support creation of new biotech companies through low taxes, transparent tax system, simple legal environment – it takes one day to register a new company in Latvia – and investment strategies, such as POLARIS in Latvia. New companies can also benefit from organisational and funding assistance of CEED Tech – a consortium of Central and Eastern European start-up accelerators. Moreover, salaries in the Baltic States are lower than in the old EU member countries. All this makes the region very seductive for founders of new biotech companies. Talking about jobs, although at the moment the biotech sector is not very big, there are a lot of indications that it will grow rapidly. So it is worth keeping an eye on job opportunities there, as all three Baltic States offer high quality of life. In addition, majority of people there speak English, so language will not be a big problem.

Overall, the Baltic States have managed to create nourishing media for small businesses and start-ups thanks to facilitation of legal and tax constraints. The biotech sector still suffers from little governmental support, but EU funding allows it growing steadily. The main problem for Baltic business including biotech companies is radical anti-Russian politics of Baltic states´ governments, which makes it problematic to work in CIS region – the biggest neighbouring market.