PARIS - The French Ministry of Research has established a new fund to provide seed money to newly created biotechnology firms.
Called Bioam (short for biotechnologie amorgage, or biotechnology priming), its funding comes from state and private financial institutions and three public research establishments and the plan is that it will end up with some EUR30 million (US$28 million) to EUR40 million to distribute.
Three financial institutions and the three research institutes (the National Scientific Research Center, the National Institute for Health and Medical Research and the National Agronomic Research Institute) already have put up EUR17 million, while another EUR15 million or so is due to be provided by industrial companies (such as Aventis), investment banks and venture capital funds. The fund has been established for a 10-year period and will be managed as an autonomous agency. According to the chairman of its board, Chantal Parpex, "it will invest an average of EUR1 million per project and we aim to create 20 to 25 companies over the next three or four years.''
At a conference to launch Bioam, research minister Roger-Girard Schwartzenberg said the fund was "part of the set of measures designed to make France a major player in the biotechnology field.'' He described the state's role as one "akin to a kindly business angel, since the funds advanced will be repayable without interest.'' Echoing that sentiment, the secretary of state for industry, Christian Pierret, maintained that the state had to support start-ups in their initial phase "to compensate for the lack of business angels'' in France.
More specifically, Chantal Parpex explained that Bioam funding would fill the gap between the early backing normally provided by business angels and the point at which venture capitalists enter the arena. "We will become involved quite early in the company's existence, at the incubation stage, with the aim of preparing them for subsequent funding rounds. We have already looked at around 40 projects.''
The Bioam fund complements the incubation funding provided specifically for start-ups that set up shop at the Genopole biotechnology business and research park at Evry, south of Paris, which was inaugurated in October 1998. There, a seed fund called Genopole 1er Jour (Genopole 1st Day) has been created to fund start-ups from the day they are established to the completion of their first funding round. It is on a much more modest scale than Bioam, disposing of funds of just EUR1.2 million that have been provided by a variety of mainly private companies and financial institutions.
At a conference in Paris to outline the Genopole's activities in 1999, held two days before the Research Ministry unveiled Bioam, Managing Director Pierre Tambourin was able to announce that EUR228,500 had been advanced to three new firms last year to help them get off the ground. As of now, the Genopole is home to 15 research laboratories and 27 companies, 16 of which have been created since 1998 and seven relocated to the Genopole from elsewhere in France.