Denmark’s foundation‑fueled biotech boom redraws the Nordic map

In the Nordics region, Denmark, and particularly Copenhagen, is punching far above its geographic weight, reshaping the trajectory of European biotech.

Sweden, despite a legacy of pharma companies and abundant science, is seeing its startups drift across the bridge to Copenhagen, with higher salaries and a better private capital base.

The biotech scene in other countries such as Norway and Finland is less robust, with a greater emphasis on radiopharma, medtech and tech.

Three key ingredients have spurred Denmark’s biotech success, said João Ribas, partner at Novo Holdings Seed Investments in Copenhagen. They are talent, novel science and strong capital allocation. This is no accident, but rather the result of systemic investment, particularly by the Novo Nordisk Foundation.

In terms of talent, there is an experienced pool that has cycled through their first and second companies and are building their third. In addition, there is a good base of individuals in big and medium-sized pharma, as well as CROs in the Nordics.

“From a government perspective, and from a foundation perspective, there’s been continued investment in novel academic science,” Ribas added. Efforts such as Innovation District Copenhagen, replicating the Kendall Square Initiative in Cambridge, Massachusetts, nurture an environment of elite research institutions, leading hospitals and a thriving start-up ecosystem.

Finally, the benefit of foundational funding cannot be overstated. The Novo Nordisk Foundation funds the science; the BioInnovation Institute (BII), a major life science incubator established by the foundation in 2018, translates it into companies; and Novo Holdings fuels the venture pipeline. This vertically integrated system is not common in other European countries, Ribas said.

BII has supported more than 130 early-stage startups within life science and deep tech, serving as a “massive machine… for creating investable companies,” said Ester Sklarsky, principal at Sound Bioventures based in Stockholm.

BII announced earlier this year that the Novo Nordisk Foundation had granted DKK 5.5 billion (~$858 billion) “to elevate innovation in Denmark and Europe.” In comparison, the Karolinska Institutet, a leading medical research university in the Stockholm region, has millions, Sklarsky said.

Many Swedish companies are applying to the BII and moving headquarters to Copenhagen, Sklarsky added. The higher salaries in the city are also attractive.

The caution is that BII could be seen as a gatekeeper if companies that apply for funding are denied. Thus, having more BII-like systems would encourage innovation and competition.

Sweden has legacy pharma roots such as AstraZeneca and Pharmacia, later sold to other pharma players. The country is bubbling with biotech activities as well, but the ecosystem is hamstrung by several factors, Sklarsky said.

According to SwedenBIO’s triennial Drug Discovery and Development Pipeline Report mapping Sweden’s pharmaceutical R&D landscape, there are 518 active drug development projects across 152 companies headquartered in Sweden.

But financial resources are thin, leading to Sweden’s growing gap with Denmark.

“We have a lot of early stage, governmental funding, which gives the initial boost to get things out of academia or get ideas going but there’s not that much private capital willing to invest in biotech,” Sklarsky said. This scenario is compounded by the lack of specialist biotech investors in the country.

Sweden also has geographical fragmentation. There is weak integration between Stockholm/Uppsala/Gothenburg and the southern life science cluster known as the Medicon Valley region, spanning the Øresund Region between eastern Denmark (Copenhagen) and southern Sweden (Malmö/Lund).

In terms of other Nordic countries, Norway and Finland have niche strengths (radiopharma and medtech, respectively) but lack scale. Norway has an oncology legacy from radiopharma company Algeta, later acquired by Bayer, but there is not much institutional biotech funding.

In addition, Norway has certain structural barriers that mitigate entrepreneurship, including a sovereign wealth fund that cannot invest domestically and a wealth tax on unrealized gains.

Finland is stronger in medtech versus biotech, but like Sweden, lacks a big pharma anchor (Orion Pharma is considered mid-sized). There are state-backed initiatives like the Finnish Drug Discovery Center (FDDC) to overcome the pharmaceutical “valley of death” by linking academic innovation with commercial-scale drug development.

Ultimately, Ribas and Sklarsky agreed Nordic regional cooperation could serve as a European model, in terms of better coordination across shared hubs and the avoidance of duplicative capabilities.

“I think we have an opportunity in the Nordics to lead the way, to show what an effective model for cooperation within the region could look like,” Ribas said. “We could be fast decision makers… [and] show the rest of the world that at least in some places in Europe, decisions can be made quickly, and we can also become powerhouses.”