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Finance Facts and Figures
Small and Medium Sized Biotechnology Companies
(“biotech SMEs”) play an important role in the
discovery and development of new technologies and
products in the life sciences. Without the
intervention of biotech SMEs during the past two
decades, there would certainly have been less
progress in the development of medicines for unmet
medical needs or in the development of new
agri-food processes and
products. Europe currently counts over 1,900
innovative biotech SMEs, which all have the
potential to become key drivers of public
welfare and economic growth, but which also have
high requirements in terms of capital, business
environment, people, and public and political
support.
|
In 2006* |
Europe |
US |
|
Number
of companies |
2330 |
1991 |
|
Number
of new companies formed |
131
|
78 |
|
Number
of employees |
98,500
|
190,500 |
|
R & D
expenditure |
€7.6
billion |
€21
billion |
|
Revenue |
€21.5
billion |
€41.5
billion |
|
Venture
Capital raised |
€1.02
billion |
€3.2
billion |
|
Equity
raised |
€3.65
billion |
€11.3
billion |
|
Debt
raised |
€0.81
billion |
€7.4
billion |
*Source:
Critical I (data collected from dedicated
biotech companies)
|
In 2007* |
Europe |
North America |
|
Venture
Capital raised |
€ 1.2
billion |
€ 4.0
billion |
|
Percent
of companies that closed or failed
to find a listed industry buyer or
achieve an IPO |
42%
|
28% |
|
Percentage of companies that raised
more than €50 million before IPO
listing |
28%
|
56% |
|
Active
lead investors per company |
0.9 |
0.5 |
*Source:
IPEEX (data collected from healthcare biotech
companies)
In
conclusion
|
European companies |
Europe needs |
-
Take
longer to raise capital
-
Have
more defaults & private
consolidation
-
Have
fewer ‘meaningful’ IPOs
-
Remain
sub-critical size
-
Are
part of a smaller industry due to
lower amounts of capital available
…compared
to N. American counterparts |
-
More
lead investors
-
More
inter-regional lead investment
-
Weak
companies to fail faster (and
therefore consolidate) with greater
comfort
-
Strong
companies to fund faster with far
greater lead investor choice
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European biotech SMEs: from money to critical mass
Today, one of the main barriers in Europe to successful
entrepreneurship, innovation and product development is
the lack of different forms of finance along the
‘capital chain’ (i.e. from seed capital to IPO and
secondary offerings). Besides the European market
fragmentation, the lack of available capital (i.e. EU-money
invested in European companies) has a great impact on
the economic and industrial evolution of the European
biotech industry. With approximately the same
number of companies as in the European sector, the US
biotechnology industry employs almost twice as many
people, spends almost 3 times as much on R&D, raises 3
or 4 times as much venture capital, and has access to 4
times as much debt finance. Furthermore, the US
industry generates roughly twice the revenue of the
European sector (€42 billion versus €22 billion).
For more detailed global and intra-European
comparative industry figures, also see
the
Critical I report: Biotechnology in
Europe: 2006
Comparative Study.
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