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Peter O'Donnell is a freelance journalist who specializes in European health affairs and is based in Brussels, Belgium.
European Biopharmaceutical Enterprises (EBE) warns that Europe’s new drug ideas are going to waste due to a lack of innovative support in the sector. The EBE has offered several requests to stimulate investment, but attracting support from member state governments and the European Commission will be no easy task.
Europe's great new drug ideas are going to waste because innovation support is lacking for biopharmaceuticals, warns one of the industry sector's organizations in late September. Complaining of "Europe’s flawed and underfunded biotech-ecosystem," European Biopharmaceutical Enterprises (EBE) says the result is "significant capital leakage and innovation drain" to other parts of the world. It highlights the exploitation of the gene editing technology CRISPR-Cas9c, which originates from European institutions but is predominantly employed by US companies, three of which, all headquartered in Cambridge, MA, raised large amounts of capital-Editas Medicine ($120 million), Intellia Cambridge Therapeutics ($70 million) and CRISPR Therapeutics ($64 million)-all for local staff hire and investment. Innovations such as RNAib and next-generation T cell receptors show a similar story, says EBE: "Other regions than Europe are reaping the economic benefits from Europe’s excellent basic science." For EBE, Europe's creative potential is frustrated by its insufficient capability to translate basic science into a commercial venture, to define attractive business cases, and to find investment capital to execute a viable business plan. One of the reasons is that "there is no strong culture of institutions or individuals seeking useful application of their work, taking out patents and creating start-up companies." EBE blames in part the failure of European universities to offer science students courses in entrepreneurship, to make effective links with business schools, or to provide technical transfer offices with the expertise to negotiate equity shares realistically. Europe's public funding, such as through the Innovative Medicines Initiative or the EU research program, tends to spread its support too thinly across too many candidates and too many different countries, and should focus more on the quality of the research and on exploiting scientific and commercial potential, says EBE. European venture capital funding has been on the rise, but is still "far too low to finance European biotech companies throughout the product development process." The top five commercial biotech companies in the US had total sales of $80 billion in 2015, representing half of worldwide biotech revenues in biotech-and creating a healthy investment ecosystem that attracts novel investments. Europe has few mature biotech companies-the paper cites Shire, UCB and Actelion-and the sector can offer no performance comparable to the US, and can attract no comparable investment. Total capital increase of just 6% last year in the US pales by comparison with US companies, which showed a 35% increase in 2015 compared to 2014. "Even large European funds find US companies more compelling cases for investment than Europe-based companies, basically because US companies create a much higher value and greater return on investment," comments EBE ruefully. There is a desperate need for a strong specialist investor community and an optimally functioning single capital market in Europe for biotech companies, concludes the sector group. If the European venture capital industry attained the same size relative to the economy as in the US, it might then provide funding for future potential European Amgens and Gileads. A final flurry of EBE requests for change includes wider concessions, such as tax credits for research, or marketing agreements for intellectual property developed at European universities, to stimulate investment. This should replace the current random and haphazard provision at national or sub-national level, says EBE. It may be right. It probably is. But how to convince member state governments, all hard-pressed for cash, to offer more support? And how to obtain support from the European Commission, whose president made not a single mention of health in his state of the union speech this month?