24-05-2012: France Biotech in partnership with Ernst & Young, published for the 10th year running the 'Life Science Panorama', describing the industry's main trends for 2010/2011 in France and worldwide. This time, almost 200 French companies took part in the survey. The panorama highlights the maturity threshold attained by the life science industry, equivalent to that of the pharmaceutical industry thanks to a wide variety of highly sought-after products. It also focuses on the first acquisitions of foreign companies by French companies and the first takeovers of listed French companies. In this time of crisis, France has clearly demonstrated the momentum of this sector, but will it run the risk of decline in the years to come due to reduced financing?
"In spite of the difficult period we are going through, our sector is proving its vitality. Its turnover is continuing to increase significantly and it is entering into partnerships with high potential. Will venture capital, which remains THE source of financing for the expansion of our industry, be able to meet the needs of the sector, taking into account the unprecedented drop in financing observed in 2011? The capital strength of our companies will be the fundamental means of support for growth, so that we may continue to take on staff, innovate and post solid performances. 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. Each SME 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," stated André Choulika, Chairman of France Biotech.
France ranked 2nd in the world (source: OECD) in terms of number of life science companies
There are 1,359 life science companies throughout France. They are mainly located in the Ile de France region (33% as in 2010), the Rhône-Alpes region (15% as against 16.6% in 2010) and the PACA (Provence-Alpes-Côte d'Azur) region (8.2% as against 10.5% in 2010). It should be noted that 6% of these companies are in the Midi-Pyrénées region and 6.6% (4.9% in 2010) in the Loire region, a trend boosted by the centre of competitive excellence. AND 48.5% of the French companies are from the academic sector.
Biotech companies, real growth opportunities for the pharmaceutical sector, with partnerships still on the up
Over the past few years, biotechnology companies have become the main potential for growth for the pharmaceutical industry, now the largest client of innovative companies (33%), along with public research laboratories.
85 partnerships were entered into in 2011. Biotechnology companies often stem from an academic discovery and then remain closely affiliated with their laboratory of origin. The percentage of partnerships stemming from academic research rose from 49% in 2010 to 52% in 2010, showing an increase in this field.
A sector struggling to finance itself and attain mid-cap status
The financing of French companies in the sector1 (via venture capital, IPOs or refinancing on the financial markets) dropped sharply between 2010 and 2011, falling by 40% from €460 million to €277 million. This trend could also be observed in the biotech sector in Europe, where financing fell by 36%.
In parallel, the companies questioned continue to overwhelmingly favor the various tools made available to the public authorities (Oséo - French state innovation agency, C.I.R. - tax rebates for research), whilst underlining, however, the extremely negative impact of the reform of the Young Innovative Company status.
"As financial resources continue to dry up, companies in the sector will have to develop more rapidly. Therefore, concentration phenomena could increase, or we may be faced with the development of the 'open innovation' phenomenon,'" concluded Franck Sebag, a partner at Ernst & Young.