French biotechs afflicted by a plunge in financial support

France has one of the largest concentrations of biotechs in Europe. And a new report paints a stark picture of some of the challenges faced by the industry. 

In the assessment of the 1,359 life sciences companies in France completed by Ernst & Young and France Biotech, analysts concluded that the industry witnessed a 40% plunge in overall financing--the sum of new venture cash, IPOs and refinancings--from 2010 to 2011, tracking a continent-wide trend that has crimped spending. The French life sciences field raised only 277 million euros last year, down from 460 million euros in 2010.

Signs of the financial crunch are abundant, notes the trade association France Biotech. The number of new biotechs created in the country dropped by almost half, down to only 24 in 2011. And closures spiked to 25, up from 5 the year before, according to a report from Nature. But the industry association is staying upbeat about the future.

"The sector has reached maturity in France in terms of products in phase 2 and 3," noted André Choulika, the France Biotech president and CEO of Cellectis, according to Nature. "The total number of these products is now equal to a top ten pharmaceutical company." But the government of France, he adds, needs to step in and help.

"France Biotech has warned the Government about the impact of the innovation grant reforms, which have blocked the path of many of our fast-developing companies, and may continue to do so," said Choulika in a statement. "Each SME (small and medium-sized enterprise) in our sector is a large company in the making. France Biotech will continue battling to get the Government to review its standpoint on the recent reforms and will remain vigilant as regards future reforms."

- here's the press release
- get the report from Nature