Record investment in French biotech companies expected in 2007

Industry group France Biotech believes that 2007 will be a record year in terms of investment in domestic biotech companies, with Euro 623m invested up to September.

According to data from France Biotech, investment in biotech companies has increased by 60% compared with the 2006 figure of €388m.

The increase in investments in biotech companies, already very significant in 2006 (only €167m was invested in 2005), is explained in particular by a stock exchange listing phase relaunched at the end of 2005, with operations carried out by BioAlliance Pharma and ExonHit Therapeutics and then, in 2006, by Genfit and Innate Pharma.

In 2007, five companies have already completed their listing on the stock exchange: Cellectis, Metabolic Explorer, Genoway, Vivalis and Zeta Biotech.

By mid-September, 14 French biotech companies were listed (including Flamel Technologies on the Nasdaq) compared with four at the beginning of 2005.

France Biotech also says that employment in biotech companies increased by 10% between 2005 and 2006, with a high proportion of jobs still in r&d (68%). The effect of the young innovative company (JEI) status, for which France Biotech campaigned hard, "remains convincing after three years of application", the association says.

The JEI status ensures that companies are exempt from social charges for personnel involved in r&d projects, providing they maintain r&d expenditure at more than 15% of their total expenditure. This status has been adopted by some 340 biotech companies. Thanks to the exemptions, three quarters of the companies have recruited r&d personnel, launched new r&d projects and bought new equipment.

France Biotech calculates that the state subsidies to SMEs in the biotech sector represented about €150m in 2006, outside of competitivity clusters, which it says created "quite a significant" lever effect. It also notes that a significant number of products are under development in the companies, with 68 products from the 46 SMEs currently in clinical trials, including 41 in Phases II and III.

However, this "slight improvement" should not "disguise the persistent divergence between France and its neighbours", France Biotech emphasises. In fact, France is in the third or even the fourth rank of biotech companies in Europe, with five times fewer companies listed than in the UK and a stock market capitalisation three times lower than that of British biotech companies.

The association therefore believes it is necessary to implement a series of incentive measures, enabling French savings to be mobilised towards innovative SMEs, and to refocus the industrial innovative agency (AII) on these companies and not on the large industrial groups.

The association calls for the status of young listed innovative enterprise (JEIC) to be created and for several reforms of university research to be carried out. It appeals for the national research agency (ANR) to become a "powerful vector of evaluation and financing for scientific research projects".