French biotech companies suffer from venture capital shortage
Paris – The French biotechnology industry is facing a major decline in invested venture capital according to an analysis made by France Biotech, the country’s national association of biotech companies.
The latest statistics are sobering. Funding fell by a whopping 79% in 2008 relative to 2007 – a loss of more than EUR500m, down from EUR694m in 2007 to just EUR143m in 12 months. Listed companies took the heaviest hits. In 2008, they collected only EUR12m on the public capital market, a fall of 98%. In comparison, venture capital investments in private companies dropped by “only” 27% to around EUR132m in 2008. The trend for early 2009 appears to show continued degradation, said France Biotech.
Philippe Pouletty, the association’s chairman, commented that “in order to underpin the optimism of our entrepreneurs, we must adopt an aggressive stimulus plan for young, innovative companies. Assuming that they can access finance, today’s innovative SMBs will become tomorrow’s multinationals, and thus constitute an essential driver of strong, sustainable economic growth.” France Biotech also stated that contrary to claims by French President Nicolas Sarkozy, the French government had actually weakened its support for young, innovative companies in 2009 – pointing to the budget for the OSEO (the French state innovation agency), which was slashed in half, and the reform of a national research tax credit that it says has effectively led to an average annual reduction of 56% for young biotech companies.