French biotech industry celebrates successful 2010
Has a strong product pipeline, good venture capital investment and seven IPOs in 2010
The future of the biotech sector in France is very promising, according to the Life Science Panorama 2010 survey carried out by France Biotech, the French association of life sciences.
The survey confirmed the arrival of the ‘second generation’ of biotech companies in France, with new companies emerging in the medtech, environmental and renewable energy sectors, partly as a result of the French government encouraging the creation of these kinds of businesses through its ‘Biotech and Bioresources’ call for projects under the Grand Emprunt (National Bond Scheme).
‘The life science industry in France has never been as lively, partly as a result of support from the French government,’ said France Biotech chairman André Choulika.
But he warned that reforms set out in the 2011 Budget Bill, particularly the progressive eradication of the Young Innovative Company (YIC) tax breaks for companies less than 8 years old, established in 2004, ‘will threaten the survival of many French life science companies’.
‘France Biotech will continue to lobby the government to backtrack on these recent legislative changes,’ Choulika said.
More than 263 firms responded to the survey, with 211 included in the analysis.
Most of the French life science companies are located in one of three regions in France: Paris Ile de France (33%), Rhône-Alpes (16.6%) and Provence-Alpes-Côte d’Azur (PACA) (10.5%). The average number of staff on the payroll is 25, compared with 19 in 2009.
Oncology and infectious diseases are the most popular therapeutic areas for product pipelines. Research is concentrated on the development of products for human healthcare and two-thirds of respondents have at least one therapeutic product in development or on the market.
In terms of commercial development, the French listed companies Cellectis, Vivalis and Iris Pharma made two acquisitions in 2010. The survey suggests that more acquisitions are in the pipeline.
In spite of these positive signs, 12 companies went out of business in 2010 and some corporate alliances probably took place because of financial difficulties. Even though 2010 was a ‘remarkable’ year in terms of fundraising, 33% of all companies encountered financial problems: 20% had cash flow problems; 27% needed to raise funds; 7% made staff redundant in 2010 and 5% said they would have to cut jobs in 2011; and 4% will file for protection from creditors.
In 2010, 114 firms had YIC status, which led to the hiring of 394 r&d personnel (an average of three per company), the launch of r&d projects worth €44m and investment in equipment worth €2.2m.
These figures clearly demonstrate the effect that YIC status has had in strengthening r&d at biotech companies. Recently incorporated life science SMEs are now applying for YIC status at an early stage.
According to a survey carried out by France Biotech in October 2010, the French research tax credit scheme (affecting 1,227 employees in all) benefited 27 companies with between 1 and 10 staff, 15 companies with between 11 and 30 staff and 16 companies with more than 30 staff. The total eligible r&d expenditure in 2009 was €167m, with the deduction of €10m in repayable advances.
Meanwhile, the French state innovation agency Oséo invested a total of €42m in 344 projects in 2010 and its Strategic Industrial Innovation programme awarded €58m in financial support to six pharma/biotech projects.
Venture capital has been the main source of funding for the sector, increasing by 56% to €148m in 2010. Last year also saw a rise in stock market listings, with 7 out of the 10 European IPOs from French companies.
The Euronext Next Biotech index was created in April 2008 as a tool for tracking the performance of listed biotech companies across Europe. At present, the index features 34 listed companies, of which 17 are French (Cellectis, ExonHit Therapeutics, Genfit, GenOway, Hybrigenics, Innate Pharma, Ipsogen, Transgene, Vivalis, Deinove, Carmat, Ipsogen, Neovacs, IntegraGen, Novagali, AB Science and Stentys). Other French life science companies are also listed on other markets: BioAlliance Pharma and NicOx on Euronext, Cerep on Alternext and Flamel Technologies on the Nasdaq.
France is currently home to about 250 life science companies in five main business sectors: primarily therapeutics, closely followed by diagnostics, innovative medical devices and, most recently, cosmetics and the environment.