France Biotech calls for more investment in biotech companies

France Biotech, the professional association for French life science companies, has reported a major drop in equity investments in French biotech companies.

Funding fell by 79% to Euro 143m in 2008, compared with â"šÂ¬694m in 2007 and investment in listed companies collapsed - only â"šÂ¬12m in 2008 - a fall of 98%.

Venture capital investments in private companies (â"šÂ¬132m in 2008) fell by 27% and the trend for 2009 so far shows continued degradation.

Philippe Pouletty, France Biotech's chairman, said: "In order to underpin the optimism of our entrepreneurs, we must adopt an aggressive stimulus plan for young, innovative companies. Assuming that they can access finance, today's innovative SMBs will become tomorrow's multinationals and thus constitute an essential driver of strong, sustainable economic growth."

Paradoxically, the French government has weakened its support for young, innovative companies for 2009.

The budget for the OSEO state innovation agency has been cut by half to â"šÂ¬320m and reform of the research tax credit (CIR) has led to an average annual reduction of 56% for biotech companies incorporated within the last five years.

France Biotech therefore urges the French government to double OSEO's budget for 2009 and triple it for 2010. It also calls for a reform of the CIR in order to distribute it more equitably between SMBs and multinationals and wants 50% of the government's Strategic Investment Fund (FSI) to go to innovative French SMBs to enable them to acquire undervalued foreign companies and technologies.

In addition, it would like caps on tax-efficient investments in young, innovative companies to be removed and the duration of the fiscal status of such companies to be extended from eight to 15 years.

The association also urges reform of the savings system in order to better channel life assurance and pension funds towards financing for such companies.