Heavyweight European venture capital firms like Novo Holdings and Sofinnova Partners have joined together to make the case for more urgently needed funding in the continent’s biotech ecosystem.
The European Life Sciences Coalition (ELSC), which launched today in association with Belgium-based private capital association Invest Europe, also counts the likes of Forbion, Omega Funds and Cooley among its members. These members represent a combined 24 billion euros ($28.6 billion) in life science assets and have invested in or helped found more than 1,400 companies.
Meanwhile, Invest Europe has more than 650 members in the finance sector across 47 countries that manage 60% of European PE and VC, accounting for 1.25 trillion euros ($1.49 trillion) of assets under management.
The ELSC pointed out that while five of the top 10 pharmaceutical companies by revenue are European entities, and the industry supports 29 million jobs across the EU, the continent has been unable to scale and retain its life sciences innovation despite strong scientific foundations.
Fragmented capital markets, decreasing numbers of specialized VC firms and regulatory hurdles limit access to growth capital in Europe and push innovative companies to look for funding elsewhere. European VC funds currently account for just 7% of the global market, according to the coalition, while U.S. VC represents 63% and China’s VC firms have a 14% share. Additionally, all but one of the 67 EU-based biotechs that went public last year listed outside the EU.
In January, European investment firm Gimv announced it would be moving its investments away from the life science space to focus on its consumer, healthcare, smart industries and sustainable cities investment platforms.
Related
Novo Holdings, the Denmark-based investment firm responsible for managing the assets and wealth of Novo Nordisk’s nonprofit foundation, has joined the ELSC in order to help stem the tide. Naveed Siddiqi, the firm’s venture investments senior partner, emphasized the importance of mobilizing funds from experienced private and public sources that can partner through all stages of drug development.
“To succeed and scale, life sciences companies need access to substantial capital and policy frameworks that recognize the realities of developing complex, science-based businesses,” Siddiqi said in a statement.
At Fierce JPM week last month, ING Bank’s global healthcare lead Stephen Farrelly pointed out the trend that the ELSC hopes to address and noted the weakness and underinvestment in biotech over the last 10-15 years. Farrelly said the U.K., has been a lone standout in Europe, where officials have agreed to knock down rebate rates paid by drug companies and to increase investment on innovative medicines after Big Pharmas threatened to withdraw R&D projects.
“The EU needs to follow suit and ultimately pay more for those innovative therapies, which they’re at risk of losing access to,” he told the Fierce JPM panel in January.
The ELSC aims to better equip the continent to finance startup and scale-worthy biotech innovation on its own soil. The coalition is looking to work with policymakers and leverage Invest Europe’s resources and connections to ensure continued European investment in the future of the industry.
Related
Despite the stark statistics, it has been a busy few months for the advancement of EU biotech innovation. In December, the European Commission proposed an initiative that included a Biotech Act meant to accelerate the development of new treatments and bring them from lab to market.
The EU proposal also included a new funding initiative via its investment arm, the European Investment Bank. The bank will evenly split a 150 million euro ($174 million) investment into 10 biotech, medtech and digital health companies over the next six years with Italian conglomerate Angelini Industries. French antibody specialist Adcytherix’s series B round was the first recipient of the initiative.
In January, privately held French pharma Servier formed a new venture fund primarily serving European biotechs. The company launched Servier Ventures with an initial 200 million euros ($232 million) to focus on oncology and neurology, while initial investments will be minority stakes in European startups.
The rest of the world is also pushing for biotech supremacy. Last month, Andreessen Horowitz (A16z) launched its $700 million biotech-specific fund as part of $15 billion raised across the Silicon Valley-based VC’s separate venture strategy areas. A16z co-founder and General Partner Ben Horowitz wrote that the fund is specifically meant to support U.S. innovation to keep the country ahead of other nations.
Meanwhile, China announced a five-year plan in 2022 to reduce its dependence on foreign investment and innovation and achieve biotech dominance. In an interview with Fierce Biotech in December, Evaluate Director and Asset and Portfolio Strategy Practice Lead Mark Lansdell noted there were 142 China biotech deals that included licensings, acquisitions and financings last year, with billions of foreign investment flowing into Chinese biotechs.
“China has been very smart in picking the right modalities, the right disease and therapy areas,” Lansdell told Fierce at the time.
