The French biotechnology industry on the launchpad - France Biotech recommends accelerating efforts to allow takeoff

France Biotech unveils « 2004 French Biotechnology Industry Report » on December 15th in Paris

20-Dec-2004

France Biotech, the French biotechnology industry association, presented the « 2004 French Biotechnology Industry Report » results. This third edition of 2004 describes the main developments in the biotechnology sector in 2003, as well as the trends, and the 2004 financing activities. In 2003, and for most 2004, the French biotechnology industry was marked by a dramatic fall of sources of financing from both venture capital and stock markets. Subsequently, company investments and jobs stagnated in the sector.

Nevertheless, the institutional and financial environment of the biotechnology sector was positively impacted at the end of 2004 by some key measures implemented by the French government, which has been favouring R&D driven companies with measures such as the Young Innovative Company status (JEI in French) and the commitment of insurers to invest an additional 6 billions euros in SMEs before 2007. These measures were conceived and submitted by France Biotech and the Strategic Council for Innovation to the French government. In addition, the research environment, key for the life sciences industry, will benefit from the creation of the National Science Agency (Agence Nationale de la Recherche in French), announced by Prime Minister Jean-Pierre Raffarin on June 29th 2004. France Biotech recommended the Agency to be well capitalized and focused on Life Sciences and Bionanosciences.

The panorama unveiled by France Biotech makes watch of a moderate optimism: it underlines the relative fragility of the national industry, the need for accelerating efforts that will drive to a successful takeoff with a focus on the measures having the strongest and fastest impact, such as the Young Innovative Company status. Despite positive shivers at the end of 2004, France remains globally behind compared to its competitors: both at the level of public investments in academic research in the field of life sciences, and at the level of investments made by venture capital in the young life sciences companies, the French efforts are 3 times inferior, in corrected GDP, to the US'. It is also noticed that the total amount of capital raised by the whole national industry, including during the good years, is much lower than the development cost of a single drug, estimated between 500 and 800 million dollars.

The conference will also provide the opportunity to give a review on 2004 France Biotech's actions, and will unveil France Biotech's latest proposal to the government, namely to create a Young Listed Company status (JEC). This status will address the need of SMEs to access to the stock market and will combat the lack of appetite of institutional and stock-market investors in growing young technological companies by offering tax benefits to those who invest in innovative SMEs.

«The French government implemented excellent measures to help SMEs. Nevertheless, the 2004 biotechnology study clearly shows that international recovery has not yet benefit to the French and European life sciences industry, no champions have emerged from!", said Philippe Pouletty, President of France Biotech. "If the sources of financing for biotechnologies have been running dry the last 2 years, the new institutional environment in place starts bearing fruit", added Philippe Pouletty. "With complementary measures, necessary to have a solid chain of financing and for SMEs' growth, we are taking the right direction that let's expect a better future in the biotechnology industry starting in 2005. National actions will strongly complement the European Commission's recent measures to create a true European stock market. The European Commission' measures include the upcoming European stock market listing prospectus directive starting in July 2005, and the revision of the legislation regarding the pre-emptive rights in the Company Law Directive framework. All these measures will protect European SMEs from buyout by overseas companies or from having to settle abroad where they will raise enough money on the stock market to finance their development," ended Philippe Pouletty.

This study was completed within the framework of the «Observatoire des biotechnologies(TM) » (the Biotechnology observatory), put in place by France Biotech and its partners, and under the scientific direction of Pr. Pierre Kopp, economist, University Paris I (Panthéon-Sorbonne).

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