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Introduction
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Developments in life sciences have been extremely rapid over the past decade and this trend will continue in the coming years. This has been aided by progress in the technologies involved, leading to ever faster and cheaper gathering of data and design of new materials and methods. Scientific knowledge alone is not sufficient to make use of the new technologies. A firm commitment to knowledge transfer and to exploitation by the technology users is necessary. Efficient risk capital markets, creation and development of high-tech small and medium enterprises (SMEs), and promoting the links between the technology producers and technology users are crucial for linking research to socio-economic needs, leading to future wealth and job creation. The challenge is therefore to set up a nurturing environment both for established bio-industries and for a new generation of European entrepreneurs.

Europe has taken a great step forward in the past few years in terms of start-up companies in the biotechnology sector. Compared to the USA, which is still the leader in this sector in many ways, Europe now has a higher number of biotechnology companies. Nevertheless most of these European companies are small, and their total combined revenues and number of employees are about a third of those in the USA. Similarly, the number of publicly traded companies in Europe and their average market capitalisation is a lot lower than in the USA, even though the number of traded companies in Europe almost doubled in the year 2000 whereas there appears to have been a stagnation in the USA in this respect. For example, the biggest American biotech company, Amgen, has almost as much market capitalisation as all of Europe's biotech companies together. It is thus clear that the European biotech industry still has a great potential for growth. (Source: Ernst and Young's eighth annual European life sciences report 2001).

The development in the EU reflects a slowly changing attitude among the scientists working in biotechnology towards the commercialisation of their results. This has also been greatly facilitated by some regional support programmes, by the creation of business incubators at universities and by government support, e.g. the BioRegio initiative in Germany. There has also been increased support at the European level, e.g. through the EC structural funds, the European Investment Fund and initiatives of the European Commission DG Enterprise, such as I-TEC. The European Commission DG Research has also been instrumental in facilitating the business environment for start-up companies. An extensive programme on SMEs has been running since the early nineties and has supported the participation of SMEs in community-funded research projects. In the Fifth Framework Programme (FP5) 10% of the total funding for research, technological development and demonstration activities was allocated to the participation of SMEs in projects. This percentage amounts to about 250 million Euros over the entire period of the Quality of Life Programme (1998-2002).

In addition to funding research carried out by SMEs, awards are also granted for the preparation of proposals and to support activities such as courses and conferences relating to entrepreneurship. The Commission co-organises the yearly Biotech and Finance Forum with the European Association of Securities Dealers (EASD). The Commission has also supported the BioBiz training scheme for writing business plans and several other specific meetings, including a workshop on Entrepreneurship in Plant Biotechnology and a special meeting where researchers met entrepreneurs.
Apart from specific SME measures, these companies are crucial actors in the other RTD activities of the research programmes, not least in the Cell Factory key action of the FP5 Quality of Life Programme. The Cell Factory aims to integrate innovative research and technologies with exploitation by industry and/or other socio-economic entities in the fields of health, environment, agro-industry, agri-food and high value added chemicals. Particular attention has been paid to the problem solving approach to strengthen European industrial competitiveness by improving the potential for the creation of small research-based biotechnology firms and entrepreneurial initiatives. These knowledge-based new industries are a reservoir of industrial competitiveness, scientific and technological innovation, opportunities for investors and job creation, which is still under-exploited in Europe.

This publication introduces a selection of companies active in the biotech sector that have in one way or another been involved in community-funded research. These companies have all been created recently or have gone through a restructuring which can qualify them as being start-ups. This selection is not meant to be a list of the "best of biotech in Europe" but rather an attempt to provide examples of the great diversity of companies being created in the biomedical, environmental, agri-biotech and industrial bioprocesses and products areas. The intention was also to present a wide spectrum of experiences and business models. Some of the companies have been financed by private capital from the scientists themselves whereas others have sought venture capital or direct equity financing from a bigger company. The companies should therefore be seen as representatives of the vast number and variety of entrepreneurial activities going on in Europe and will hopefully serve as triggers for continued development in this sector of the knowledge-based economy.


Indridi Benediktsson & Gwennael Joliff-Botrel
Scientific officers
EC Directorate-General for Research