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The creation in the Paris Region of a multidisciplinary Institute of Technology will bring together the best researchers in world, innovative SMEs and the research centres of large industrial groups.
The total share of industrial investment in European R&D is insufficient and explains the poor positioning of the European industry in high-growth technology fields. The gap is widening, not only with the USA, but also with Japan, jeopardizing the future growth and financing of the European social model.
Biotechnology drugs already amount to 10% of world pharmaceutical sales, 20% of total newly registered products and 50% of the product pipeline. Apart from the health sector, life science research contributes to the growth of numerous key sectors such as energy, the environment, the food industry and several others.
With a comparable number of biotechnology companies, the US has twice as many jobs in this sector, invests three times as much in R&D (in 2005, over a quarter of the $110 billion invested in R&D by the federal state was allocated to life sciences) and generates twice as much revenue as Europe .
Both these sectors were the first recipients of venture capital investments, both in Europe and the USA, but investment in biotechnology companies was four times higher in the USA than in Europe in 2004 ($3.8 billion in the USA compared with $1.4 billion in Europe), with European companies failing to benefit from the increase. At the end of 2005, total investment (venture capital and stock market) in biotechnology again increased on either side of the Atlantic, but once again over three times more was invested in American biotech.
France only ranked third in Europe for venture-capital investment in biotechnology companies in 2004 (€242 million), behind Germany (€258 million) and the UK (€393 million). France only had four listed companies, as opposed to 15 in Germany and 42 in the UK in August 2005.
It was not until the end of 2005, when there had been no initial public offering (IPO) in this sector in France since 1999, that the French stock market began to open up to biotechnology companies with the initial public offerings of BioAlliance Pharma and ExonHit Therapeutics. With 48 strategic alliances established by French biotechnology companies in 2004, France was still behind its German and UK neighbours, with 103 and 105 alliances respectively in 2004.
An effort on the scale made by the USA and Asia needs to be made now for the French biotechnology industry to succeed in entering the maturity phase and continue to be a driving force.
France Biotech, the Strategic Council of Innovation (SCI) and several associations identified several key factors for success.
Stimulating the stock market for high-tech SMEs. By enabling French SMEs to finance their international growth using the French–European stock market and by whetting the investors' appetite by means of tax incentives, an initiative called Jeune Entreprise Innovante Cotée (JEIC) status will boost private research and hopefully lead to the emergence of leading companies.
JEIC status will therefore contribute to a new impetus to all the innovation financing chains and to preventing delocalization of technological SMEs to the US. There are currently about one hundred listed biotechnology companies in Europe: 6 are in France, 42 are in the UK and 15 are in Germany, compared with 319 in the USA!
Strengthening venture capital. The savings of French people, particularly in life insurance and pension funds, should be increasingly directed towards all innovative SMEs, including biotech SMEs; the commitment by insurance companies to invest €6 billion more in SMEs with high-growth potential between now and 2007 should now be backed up by substantial investments in specialized venture capital funds.
Dynamizing research and improving research finance. Our new Agence Nationale de la Recherche (ANR) must receive substantial additional resources — at least €1 billion a year — and set up good international practices of grant agencies (peer review, independency and transparency). This agency must allocate at least 40% of its funds for projects that come directly from and are managed by innovative SMEs or innovative SME consortiums, and not reserve its funds for projects managed by a few large groups.
The creation in the Paris Region (Ile-de-France) of a multidisciplinary European Institute of Technology (IET de Paris) will bring together the best researchers in world, innovative SMEs and the research centres of large industrial groups. Financed on projects by European grant agencies, it will enable French biomedical and biotechnological research to gain a leading position on the international scene.
Dr Phillipe Pouletty is chairman of France Biotech, the French biotechnology industry association.