The European bio-pharmaceutical sector faces a range of challenges that need to be addressed if the sector is to flourish for the benefit of patients, society and the economy. These are the conclusions drawn from a report commissioned by EFPIA and compiled by Charles River Associates (CRA). 

CRA was asked to explore the extent to which these barriers exist, and to what extent companies of different sizes face a variety of challenges in raising capital to fund research and development.

The report, entitled: "Access to finance and barriers to growth in the innovative biopharmaceuticals sector," was launched during a lunch event at the European Business Summit on May 6. It examines the gap between Europe and the U.S. in terms of growth of companies in the sector, and the underlying causes. 

The event was Chaired by Didier Malherbe (Vice President & head of Public Affairs, UCB) with contributions from MEP Philippe de Backer, John Davis from the European Investment Bank, Patrick Van Beneden (partner at venture capital firm Gimv) and Jack Scannell (Researcher in biomedical R&D productivity, Oxford University). 

The report underscores that growth rates of mid-sized European-based companies lie substantially below those of US counterparts. While Europe has a similar number of biopharmaceutical companies investing between €100 million and €999 million and even over €1 billion annually in R&D, there are significantly fewer companies in Europe investing in the €30-99 million range. This happens irrespective of the fact that quality and quantity of fundamental research is broadly similar in the EU and the US.

A lack of private venture capital to fund early, loss-making development phases of proof of concept and essential safety testing in the EU has been identified as a major factor for this discrepancy. Yet equally importantly, these European funding shortfalls extend to other sources of finance used in later stage development.  Public funding sources in Europe are providing investment support for companies, but historically this has mostly focused on the earliest stages of their development and on particular types of company.  

Today’s discussion should be a catalyst to further engagement on how best to build a thriving life-sciences eco-system for companies of all sizes.