Europe's Health and Life Sciences companies rally to compete globally
Europe's health and life sciences sector is showing signs of robust growth despite the downturn in capital markets, according to a report released today by Deloitte & Touche.

The report, entitled "Surviving Uncertainty" tracks the financial and operational performance of nearly 1,800 businesses in Europe's mediscience sector, estimates that employment in the sector is growing at 23 percent a year.

Private equity and venture capital backing for the sector remains strong. During 2000 and 2001 the European mediscience industry raised more than Euros 1 billion from private equity and the signals are that this is expected to continue in 2002. The report found, however, that private equity is not being used to create companies at historic levels, but to invest larger amounts in existing companies.

The geographic share of the investments is shifting away from the UK and Germany as France and the Medicon Valley gain ground. Meanwhile, venture capitalists are backing product based companies and are increasingly avoiding pure platform companies.

"This industry is not alone in facing challenges in the public markets in its ability to finance its progress, establish valuable links with partners, manage research and development resources and deal with regulators." said Stuart Henderson, Head of UK Head of Life & Health Sciences at Deloitte & Touche.

"Value in entrepreneurial health science companies resides in intangibles, the quality of the workforce, strategic partners, intellectual property, reputation, customers and corporate knowledge. Consequently, as they grow, companies must secure and control these sources of value and to manage their growing pains and build better companies."

"We believe companies in this sector, irrespective of their size and maturity, must consider the formal development of risk management principles and disciplines". 

Key findings:
The market capitalisation of the 125 publicly listed companies in the sector totalled Euros 37 billion at the end of the first half of 2002
Only 12 percent of the European mediscience population has a market cap of above Euros 500 million. Lack of liquidity and perceived volatility have triggered a retreat by institutional investors from the sector
There are currently 528 biotech-derived drugs from European companies in the pre-clinical and clinical development stage.
The bulk of European mediscience activities is occurring in the UK, Germany, France, Switzerland and the Medicon Valley (Northern Denmark and Southern Sweden). The UK, Europe's most mature biotech group, dominates.

Ends

For more information or a copy of the report, please contact: Emma Thorogood on 020 7303 6264 or Amy Thompson on 0207 303 3861 or at amthompson@deloitte.co.uk.

Notes to Editors
Deloitte's Technology, Media and Telecommunications (TMT) group offers audit and advisory services to a broad range of industry sectors, including telecommunications, media, publishing, broadcast, biotechnology, healthcare, pharmaceutical and technology companies. The practice hosts a quarterly techMARK Mediscience forum with the Bio-Industry Association and the London Stock Exchange. techMARK Mediscience, launched in November 2001, is the world's first international market for healthcare companies. Deloitte and the BIA are present briefings on current strategic business issues for senior executives in the healthcare industry.

Deloitte & Touche is the UK's fastest growing major professional services firm in 23 locations, with over 10,000 staff nationwide and fee income of £713.6 million in 2001/2002. It is the UK practice of Deloitte Touche Tohmatsu, a global leader in professional services with over 100,000 people in 140 countries and fee income of $12.4 billion for the year ended 31 May 2001.

Authorised by the Financial Services Authority in respect of regulated activities.

The information contained in this article is correct at the time of going to press.

For further information on Deloitte & Touche, you can access our website on www.deloitte.co.uk