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