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Industrialists call for a real industrial and financial policy for biotechnologies in Europe Life sciences are key for growth and competitiveness in Europe, but also for European public health systems and their independence Paris, February 10th 2005 – On the occasion of the BioImpact presentation, the first scientific study on the impact of biotechnology-derived medicines on the quality of life and life expectancy of patients, France Biotech, the French Biotechnology Industry Association (www.france-biotech.org), EuropaBio, The European Association of Bioindustries (www.europabio.org) call for the need to pursue ambitious actions in France and in Europe to develop real and effective biotechnology industrial policies that should integrate research, development, and biomanufacturing. With 190 medicines and vaccines already available and more than 400 therapeutic products under development in 2004, biotechnologies are targeting over 300 million patients in the world. These medicines are offering safer, more efficient medicines with reduced side effects, and new therapeutic strategies for very incapacitating illnesses which have gone untreated until the arrival of biotechnology. Small and medium-sized biotechnology companies (3500 worldwide, approximately 1500 in Europe and 2500 in France) pharmaceutical industries and researchers are working to renew the portfolios of therapeutic products available to doctors and patients, by undertaking cutting-edge research and using the very latest healthcare technologies. Thus, it is crucial to stimulate the environment for these young innovative biotechnology companies, and tighten their collaboration with academic research and the pharmaceutical industry where both the “know-how” and capacity lie to develop and commercialize their products. On that point, the gap between the US and Europe is continuously widening. Unless Europe is to become dependant on medicines researched and developed on the other side of the Atlantic, it is indispensable and still possible to redress the balance. The components of an efficient national and European policy in life sciences are well identified and it is now time for our European governments and various authorities to act by taking into account the industry’s recommendations. Boost and better finance academic research and enable a number of centres of excellence to emerge Grant agencies have proven to be efficient in numerous countries in Europe and in the US. In France, the new National Agency for Research (ANR), that will grant €350 million in 2005, should focus on life sciences and bionanosciences; put an emphasis on research excellence and finance the best research teams and projects; be led by an internationally renowned president; benefit from additional large investments (at least €10 billion from now to 2010, financed, for example, by privatisations), and must be independent from the large research organizations. The European Commission must, on its side, help Member States reach the objective of investing 3% of their GDP in Research and Development by 2010 and enable SMEs access to at least 15% of the €30 billion proposed for the seventh framework programme for research through appropriate instruments and less red tape. Finally, in France and in Europe, we must enable the emergence of a few centres of excellence focused on life sciences and bionanosciences, bring together academic research, clinical research, and private research. Only centres with a critical mass and an international visibility will be able to attract industrial research, biomanufacturing units or young talented researchers from India or China for example. Promoting a dynamic European Stock Market: from an SME to a World leader European companies suffer from the fragmentation and anaemia of European Stock Exchanges, as well as the lack of appetite among European investors for technology stocks. The stock market avenue is indispensable for the growth of a biotechnology company that needs several hundred million euros in capital to develop its first medicine and become profitable. The absence of stock exchange exit possibilities further compromises and penalizes biotech start up financing as VC funds continue financing existing companies rather than new start ups. In the biotech sector, there are only 4 quoted companies1 in France compared to 48 in the UK, a total of 106 in Europe, and 324 in the US! France has had no biotech IPO since 1999. In 2004, the European investment in biotechnology companies was just 17% of the total investment in the sector. The Young Innovative Company (Jeune Entreprise Cotée) status submitted to the French government in December 2004, offers fiscal incentives to revive the interest of institutional investors and stock-market investors in young growing technological companies, the future champions of tomorrow’s European economy. JEC proposes that any SME, and especially innovative companies, with a workforce of fewer than 2,000 employees and a turnover of less than 150 million euros, which is listed on either a controlled or regulated stock exchange, will benefit from the following advantages for an 8-year period following IPO: • Total exemption from capital gains tax for shareholders (whether direct or through any investment company) • Total exemption from ISF (Impôt de Solidarité sur la Fortune – wealth tax) for directly or indirectly held securities • Total exemption from inheritance taxes on directly or indirectly held securities • Exemption from social costs on the salaries of personnel involved in research or managing research and development projects. National actions will strongly complement the European Commission’s recent measures to create a pan- European stock market. The European Commission’s measures include the upcoming European stock market listing prospectus directive starting in July 2005, and the revision of the legislation regarding the pre-emption rights in the Company Law Directive framework, and the expected consolidation of stock markets. Tackling the last link in the financing chain of innovation, from the start ups to industrial development and internationalisation, JEC complements the measures, already in place, which promote the financing of young innovative companies, such as the French Young Innovative Company status (YIC), in place since January 1 2004, to attract investments in innovative SMEs. that has already been adopted by 1000 companies including 150 biotech companies; and the commitment of insurers to invest an additional 6 billion euros in SMEs by 2007. It would be a pity to see our best SMEs bought out by overseas companies or settle abroad due to a lack of a Stock Market where they could raise enough money to finance their development. All these measures, combined with an improvement in the authorisation process and market access to innovative biotherapies and in the regulatory environment for companies in the life sciences industry, can no longer be put off especially at a time when the US and Asia are boosting their actions in the life sciences industry. About France Biotech France Biotech is the French biotechnology association and the industry representative. Its mission is to contribute to position France and Europe as leaders in the Life sciences industry. France Biotech is acting on the four key factors of success for a strong biotechnology industry: • improving the academic R&D dynamics and funding: France Biotech supported the SCI when it made a series of proposals including the creation of a National Science Agency, project accepted by the French government on June 2004,, and the focusing of the Agency’s budget on Life Sciences and Nanobiosciences • ensuring a liquid chain of financing for young biotechnology companies (from seed funding to the stock market): France Biotech has designed and proposed, with the SCI, the status of Jeune Entreprise Innovante (Young Innovative Enterprise, JEI). The government implemented this law proposal on January 1st 2004, which now makes France the most attractive country for young research-driven companies and subsidiaries from a tax and social costs standpoint recently, France Biotech and a few other organisations of entrepreneurs and investors triggered an initiative that led to the commitment made by the Life insurance companies to invest an additional 6 billion euros in private equity. France Biotech is now proposing the government to provide fiscal incentives for investors that will invest in Young Listed Enterprises, in order to prevent the lack of appetite encountered by young technology companies on the European stock markets. • working on the managerial environment within its through members networking, benchmarking activities, good practices sharing, etc. • and lastly improving public perception: the association has organised in 2004 BioPicture Festival, the 1st international film and image festival on biotechnology, for conveying a positive image of life sciences among the general public. France Biotech gathers 150 members, representing most of the French biotechnology investments, pipeline and employees. About EuropaBio – www.europabio.org EuropaBio, the European Association for Bioindustries, has about 40 corporate members operating worldwide and 25 national biotechnology associations representing some 1500 small and medium sized enterprises involved in research and development, testing, manufacturing and distribution of biotechnology products. EuropaBio's mission is to promote an innovative and dynamic biotechnology-based industry in Europe by stimulating R&D, commercial development, and market access for biotechnology products. 1 Source : Biocentury (09 02 05) Contact France Biotech Angelita de Francisco Déléguée générale Tél : +33 (0)1 56 58 10 70 Contacts presse Pour France Biotech Pour Europabio Alize Public Relations Adeline Farrelly Caroline Carmagnol Communications Director Tel : + 33 (0)6 64 18 99 59 Tel : +32 2 735 03 13 caroline.carmagnol@wanadoo.fr a.farrelly@europabio.org
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