Biotechnology in Europe – history of an empire

Biotechnology as an industry in Europe is relatively young, with its roots in the early biotechnology companies which emerged in the 1980’s through entrepreneurs such as Sir Christopher Evans.

An industrial revolution

The scientific breakthroughs of the 1960s, including the discovery of the structure of DNA, began to yield insights into disease processes and potential treatment. Ambitious and far-sighted scientists began to look at applying pivotal academic research to produce market products that would herald the start of the biotechnology revolution and fundamental change to the way that drugs are discovered and brought to market.

As attitudes to investment and risk began to change through the 1990s, fledgling biotechnology companies started to emerge across Europe. By 2000, healthcare biotechnology had become a major growth industry, embraced by national and international governments as Europe started its inevitable move away from a production economy to a knowledge-driven economy.

Massive public and private investment was poured into the sector and companies were born at an incredible rate. This, combined with the release of experience managers from a consolidating pharmaceutical sector, created the environment where hundreds of companies emerged each year.

Growing pains

The initial enthsuiasm for a new industry that promised fabulous returns on investment took a reality check when it became apparent that biotechnology is not a short term investment and that the promised wealth was not tomorrow or the next day but potentially 10-15 years away.

Private investment in early stage companies slowed significantly in 2001 with the global economic downturn and the last IPO for four years took place.

This had a varying impact across Europe – where clusters had reached a critical mass the impact was lessened – while some companies did close, others stopped growing, minimised spending and radically transformed business models from platform technologies to product pipelines to attract the reduced investment available.

New models

Inevitably, the global market began to recover and with it an older, wiser and changed biotechnology industry. Gone were the days when all ideas were turned into companies with rapid expansion – company growth was, and still is, more cautious – money burn is critical and companies now operate with a global outlook out of necessity as new regions start to challenge.

Early stage investment caution reduced the rate of successful start up companies to a rate where early funding is a challenge across Europe. Public investment has started to step into the gap, particularly in the newer biotechnology regions with planned, careful investment.

As companies grow, the exit strategy for investors is just as likely to be acquisition as outlicensing a product to market or seeking an IPO. Europe’s biotechnology model is evolving to one where innovative and proven companies do not stay independent but are either acquired by a pharma or undertake a series of mergers to create stability and weight.

Today’s biotechnology

Many new regions are focussing on biotechnology as a core industry and the sector has seen biocommunities emerging from Spain to Estonia, reflecting the expansion of Europe and the increased availability of high quality research for commercial exploitation.

The Council of European BioRegions has Members from biocommunities from all corners of Europe and beyond – each with dedicated policy, funding and scientific support to ensure that it becomes a significant economic tool for the region.