BioWorld International Correspondent

BRUSSELS, Belgium A new report commissioned by the European Union has confirmed some of the weaknesses of the European biotechnology sector. The European biotechnology lag behind the U.S. has systemic causes, rather than simply being the result of specific market or institutional failures, it suggested.

Successful innovative and commercial activities in this industry will require a coordinated strategy, which has so far been absent in Europe.

The report, from Alfonso Gambardella and a team at the University of Siena in Italy, underlines the unattractiveness of the European environment: comparatively little U.S. research is done in Europe, it points out, and the European research system in the life sciences and in biotechnology is “still too fragmented,” due to regulatory, entrepreneurial, fiscal and financial factors, but also because of inadequacies in the supply of cutting-edge scientific research. European firms are still too small and too specialized in specific niches, and are not able to make efficient use of networks of collaborative research.

The report suggests that increased funding is only a part of the solution, and that more pluralism in funding sources, lower dependence on closed national systems, and higher integration of research with teaching, clinical research and medical practice should become priorities of a European research policy for biotechnology.

The report suggests that European companies have tended to collaborate more with U.S. biotechnology firms rather than European firms. Even in the absence of other institutional barriers to entrepreneurial ventures, start-ups in Europe might have been crowded out by the large number of U.S.-based firms anxious to trade non-U.S. marketing rights for capital, it remarks. Given the number of American firms in search of capital, European firms interested in commercializing biotechnology had alternatives to investing in local biotechnology firms.

The European research system is insufficiently integrated with industrial research, the report says, because the industry does not exploit the potential offered by science, and there is low mobility of researchers, compounded by bureaucratic obstacles to collaboration. Policies in this area have been based on a misconception, the report charges: Europe’s traditional focus on incentives for academic researchers to become involved in industrial research, and on developing venture capital and science parks, “reflect an understanding of the innovation process as based on the transfer of knowledge.” But because innovation is primarily an interactive process, “more emphasis is necessary instead on how to integrate more directly different agents and fragments of knowledge.”

The report profiles the growth and current state of development of the industry in Europe. The rate of company formation is showing signs of decrease, after the number of independent European dedicated biotechnology firms almost doubled to nearly 2,000 from 1996 to 2000, it says. Germany and the UK still have most firms, with more than 500 each, followed by France and Sweden, each with at least 200, and with other countries boasting from close to 100 in Switzerland to 30 in Spain. German biotechnology companies are active mainly in human health care (therapeutics and diagnostics), Swedish firms concentrate on human and animal therapeutics, while France, Italy and Switzerland have a higher proportion of companies active in agro-food.

A large proportion of French and German firms entered the industry, both in pharmaceuticals and agro-food, to explore the commercial value of recent technological advances at the lowest levels of organization of living organisms in genomics, proteomics and bioinformatics. The UK keeps a strong technological basis in cell and tissue engineering, process biotechnology, instrumentation and devices. Moreover, new UK firms are more active in combinatorial chemistry and in other general-purpose research techniques applied to drug discovery and development. Italy’s specialization is in targeting subcellular organisms, while Swedish companies tend to focus mainly on manufacturing biomaterials and on innovative technologies in drug discovery, such as combinatorial chemistry and chiral synthesis.

EU Watching Genetics Issue In Iceland

The European Union has conceded that concerns over data protection must be taken seriously in a new Icelandic plan to back national biotechnology developments. The government of Iceland is planning financial guarantees to encourage continued expansion of Iceland’s biotechnology sector.

Draft legislation now going before the parliament is aimed at authorizing the minister of finance to guarantee a convertible bond offering of up to EUR227 million (US$220 million) by DeCode Genetics Inc., an Icelandic genomics company. DeCode said it hopes the new investment will allow it to accelerate the development of new products based on its discoveries in the genetics of dozens of common diseases.

But there are signs of local resistance. Mannvernd, an Icelandic group concerned about treatment of medical records and personal data, has written to the EU seeking intervention. It said the plan is tantamount to putting Iceland’s 1,200-year genetic history on sale to the highest bidder. It said Icelanders cannot opt out of the database, and that DeCode’s special relationship with the government gives it a monopoly situation, raising questions over the right to access and use of personal genetic information, and data privacy.

The EU has replied to Mannvernd acknowledging that this is an “important issue,” and giving assurances that the appropriate authorities that link Iceland to the EU will be explicitly asked to check that there are no breaches in compliance with the EU rules on data protection, to which Iceland also has signed on.

EU Seeks Bids For Research Programs

The European Union has issued an invitation to researchers to suggest cutting-edge research topics for its upcoming five-year research program. The EU’s sixth framework program, which will run from 2002 to 2006 with a budget of about $17 billion, and which will devote a large proportion of its finance to biotechnology and life sciences, is in the final stages of formal legal adoption. Although a consensus already has been built among EU politicians on its main orientations, potential candidates for grant aid now are being asked to submit suggestions as to which specific areas they would like to see covered by the program, to help the EU focus its planning as the preparations are made to launch formal calls for tenders later this year.

Expressions of interest are being sought on genomics research, among the other areas. The deadline for submission of proposals (to fp6-eoi2002@cec.eu.int) is June 7. After that, the EU will assess the submissions, and publish an abstract of each suggestion received, together with contact information, in July. Submissions are being invited from organizations or groups of organizations from the 15 EU member states and the 13 EU candidate countries, but entities from other countries and international organizations may also be associated with submissions.