Accelerating the maturation of French biotechnology and life science SMEs

25-Oct-2006

As the candidates in France's 2007 presidential elections continue to prepare their campaign platforms, France Biotech, the French biotechnology industry association, presents three key proposals for promoting the maturation of biotechnology SMEs at the various stages of their development cycle and for ensuring solid, sustainable growth.

Biotechnology and high-tech SMEs are key drivers of innovation, notably in healthcare, which accounts for 80% of Europe's 2000 or so biotechnology firms, but also in energy, environment, industrial processes optimization, food, and so on. A number of the SMEs founded 25 or 30 years ago in the United-States of America are now prosperous "big pharma" companies: the first ten "blockbuster" biotech drugs - those with annual worldwide sales of more than a billion dollars and delivering benefits to millions of patients, including those in Europe - were all invented and developed in the USA.

Today, Europe has generated as many biotechnology SMEs as the USA but company creation is just one of the elements of a policy truly in line with the Lisbon Objectives. European biotechnology SMEs are smaller and more sluggish because they invest less in R&D and are less likely to survive than their North American counterparts. The main cause of this under-sizing is chronic financial undernourishment - mainly due to difficulty in raising funds on the stock market. This is especially true in France, which lacks a critical mass of professional investors and analysts. Hence, according to France Biotech, even though the whole biotechnology sector is hoping that Innate Pharma will successfully complete its initial public offering, and that the firm will be emulated by many others to come, France is far from the scores chalked up by Germany - with 20 listed companies - and the UK - 63 listed companies. More generally, Europe now has only 143 listed companies, versus 337 in the USA; furthermore, the market capitalisation of the American firms (getting on for 385 billion dollars) is four times greater than that of the Europeans.

Without a coherent, integrated system for promoting R&D investment, SME growth and, more generally, the constitution of a critical mass of stakeholders with solid experience of all the stages of the research and innovation value chain, Europe runs a significant danger of deepening its pharmaceutical trade deficit and seeing a brain drain and relocation of its leading high-tech companies not only to the USA but maybe also to the emerging Asian countries, which are rapidly closing the gap.

The set of components of a growth ecosystem, that generates benefits for society at large, must be supported and coherently operated: today's challenge is to accelerate the maturation of this sector. Even though the constraints linked to the fragmentation of Europe's markets and the diversity of national healthcare systems are the same for both major companies and SMEs, the latter must receive specific attention as part of a wide-ranging debate on France's attractiveness and competitiveness for the healthcare industry, since these are the businesses that drive growth, innovation and employment.

https://www.bionity.com/en/news/58891/accelerating-the-maturation-of-french-biotechnology-and-life-science-smes.html