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Euro biotech investment down 44 per cent

Venture capitalist cash drying up for European biotechnology sector as deals across all industries hit 11-year low

Biotechnology companies in Europe are having to compete for a shrinking pot of cash as venture capitalist funds dry up.

Investment in the sector fall 44 per cent in the third quarter as companies attracted €163m for 29 deals, according to analysts Dow Jones VentureSource.

Across all industries investment in European companies in the period slumped to an 11-year low, hit by the region's debt crisis and a loss in business confidence.

Venture capitalists put €951m into 219 deals for European companies in the third quarter of 2011, a 12 per cent drop in investment

"The ongoing European debt crisis, drop in consumer and business confidence and general uncertainty surrounding global economic conditions continue to affect levels of venture capital financing activity in the region significantly," said Anthony Sheldon, research manager, Dow Jones VentureSource.

"With no clear indication of an improving global economic environment, it remains to be seen whether the small gains made this quarter in the consumer and business sectors are a genuine cause for optimism looking forward to 2012."

The challenging climate for biotech, and healthcare companies in general, has attracted the attention of big pharma.

Just last week Sanofi CEO Chris Viehbacher told Associated Press: "It has never been more difficult to fund a new idea. Venture capital has pretty much gotten right out of healthcare.

"There has to be a greater demonstration that we can convert a great idea scientifically into a patient benefit with increased frequency — and faster."

1st November 2011

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