French Biotech: A Fast-Growing Industry

Sep 01, 2004
By BioPharm International Editors
Volume 17, Issue 9

The French biotechnology industry produced revenue of d830 million in 2003, which makes it the third largest in Europe.
Over the last 20 years, France has become a major hub of the European biotechnology sector. The renewed French interest emerged from the perception that progress in biotechnology is good not only for the country's economy but also for the well being of people worldwide and both the private and the public sectors. This realization has produced a cooperative and effective regulatory and fiscal environment. In particular, as of 2004, start-ups benefit from the "Innovative Startups" status. This new legislation allows full tax and social costs exemptions for small and medium-sized enterprises (SMEs). Biotech's growth in France is primarily due to special funding and an active policy supporting technology transfer from academic circles to industry. Additionally, a strong supplier base assists biotech firms in a range of activities. Third party providers and consultants offer a full range of services, including product development assistance, manufacturing of batch products for safety testing or clinical trials, and advice on legal and regulatory affairs, logistics, patenting, marketing, and trade issues.

Platform 7 of the Institut Pasteur: high-rate long oligonucleotide synthesis
The Biotech LandscapeWith over 300 biotech firms and more than 600 service providers and related companies, the French biotechnology industry experienced strong growth and generated revenue in excess of d830 million in 2003, making it the third largest in Europe after the UK and Germany. More than 7,500 individuals are directly employed in the biotech field, moving 165 new therapeutic products from preclinical development to phase 3 trials. A France Biotech Association survey confirms that French biotech is a young, heterogeneous, and promising industry. More than one-third of the companies were created in the last three years, and only 10% are over 10 years old. Approximately one-half of these companies operate from a single site, especially start-ups, but the survey shows that the number of sites increases as firms mature.

Nearly one-third of French biotech firms experience negative sales growth, particularly the smaller ones, and yet another one-third show sales growth of over 50%. There is a strong concentration of sales among few companies: 80% of all sales are generated by 6% of companies. Despite the economic slowdown's effect on the financial resources available for biotech companies worldwide, the French biotech workforce has grown more than 30% annually since 2000. Research employment increased even faster and now represents almost 50% of the total biotech workforce.

The Tryton bioreactors, introduced by France-based company Biolafitte, ensure optimal culture conditions by controlling all process parameters.
French biotech companies are also diverse in focus. Forty-eight percent concentrate on R&D, 22% are service providers, 16% are partnered with pharmaceutical firms, and only 14% are actually marketing products today. Companies created more than five years ago are more likely to base their business model on R&D and partnership, while younger firms are more inclined to provide services or market products, aiming for faster profitability. Many younger companies favor diagnostic-kit development.

While the biotech industry covers areas as varied as developing cosmetic products, improving crop yield, and cloning animals, one-half of French biotech companies focus on human health applications, especially drugs and medical diagnostics. Their main areas of expertise are oncology (19%), infectious diseases, immunology research, and central nervous system (10 to 12% for each).

The French biotech industry has a handful of mature companies. The largest firms — CEREP, Flamel, IDM, Transgene, Sangstat (Genzyme), Genset (Serono) — including the few that are listed on the stock exchange, employ on average 100 people, have raised more than d50 million each and have several drugs either in development or already on the market. Their annual sales range from 5 to more than d100 million. Most other companies are far from these leaders. Many have not yet generated revenue, indicating both their youth and the long R&D cycles in biotech.

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