LONDON _ Europe lacks the local biotechnology infrastructure ofthe U.S. and Horst Dieter Schlumberger, who is in charge ofbiotechnology coordination at Bayer AG, of Wuppertal, Germany,says this is one reason why European pharmaceutical companies findit attractive to build production and research and developmentfacilities for biotechnology in the U.S.

"In the United States," Schlumberger told the Financial Timesbiotechnology conference in London Wednesday, "small andmedium high-tech enterprises are an invaluable resource that is eithernot or only restrictedly available in Europe."

Bayer, he said, does not find the technology it needs in Germany. "Ifthe technology is in Europe, it is mostly in the U.K.," Schlumbergeradded.

Other factors hinder Europe's growth in biotechnology, he told theconference, including the regulatory regime. "Investments in theUnited States," said Schlumberger, "are not only concluded becauseof the more favorable regulatory and political environment, but theAmerican biotechnology-based industry is more mature due to thesemore favorable conditions than the European industry."

Schlumberger pointed out that while Europe is moving towards acommon regulatory regime, there are large differences betweencountries on how they interpret the regulations from the Brussels-based European Union.

Germany, in particular, is less attractive to pharmaceuticalcompanies than most other countries in Europe. Schlumbergercomplained that in 1987 when Bayer came to choose a productionsite for clotting factor VIII with genetically modified mammaliancells it ruled out Germany because it faced a drawn out process to getsite approval. It took just 10 months in California.

"From the current view," said Schlumberger, "the decision wasabsolutely correct. Moreover, the Bayer affiliate Miles Inc. has, afternegotiations of a period of two years, now a general permission fromBerkeley [Calif.] for the construction and the use of installations forresearch and development for a planning period of 30 years, which isabsolutely unthinkable in Germany, and perhaps in Europe."

Even in Germany the problem is compounded by the fact that thecountry's 16 local states, the Lander, often interpret the Federalgovernment's legislation differently. Germany also suffers from ahigh cost of labor, not least due to the fact that the country's workersget six weeks annual leave plus a further three weeks of publicholidays. As a consequence of these and other problems,Schlumberger said, "We find it very hard to be really innovative inGermany."

Future Looks Bright

While he agrees with Schlumberger's assessment of the currentposition in Germany, Jrgen Drews, president of internationalresearch at Hoffmann-La Roche Inc., of Nutley, N.J., and chairmanof the Senior Advisory Group Biotechnology, sees some signs ofhope for the future. Drews points to the fact that Europe continues tofund academic research in the life sciences.

"There is a tremendous richness and wealth in the sciences goingon," said Drews. American universities, on the other hand, find itincreasingly difficult to raise money for research. Youngerresearchers in Europe also show more willingness to commercializetheir science. "The ivory tower mentality is slowly disappearing,"Drews said.

If that continues for another 10 years, Europe could rise in theproductivity stakes, Drews believes. "For the next 10 years," headded, "perhaps the U.S. is going to remain the leader, but in thelong term I am not so sure."

By the time the European industry has generated some vigor,Singapore could well be another player on the biotechnology scene.The country has already made impressive growth in the electronicssector. Singapore is now actively soliciting pharmaceutical andbiotechnology companies to set up in the city state, said Teoh Yong-Sea, of Singapore.

Singapore Boosting Development

Teoh is director of the National Biotechnology Programme, set up bythe Singapore Economic Development Board in 1988. Singapore,said Teoh, "has identified biotechnology as one of the key industriesfor priority development." The government decided to intervene toencourage biotechnology, Teoh added, because "the biotechnologyindustry is a very new industry and the private sector is not gettinginvolved."

The country's investors are more interested in investing in propertyor conventional industries, Teoh explained. He said the investors'argument is that "there are plenty of investment opportunities, sowhy get involved in something where you could lose your head?

"Unless the government takes the lead," Teoh said, "biotechnologyor any other new technology is unlikely to take root in Singapore."

The Singapore government has launched a number of initiatives,including the promotion of education, manpower development,building of an infrastructure and promotion of the publicunderstanding and awareness of biotechnology among Singaporeans.The country also has put in place economic and tax incentives.

Research institutes set up with the support of the government rangefrom the Institute of Molecular and Cell Biology (IMCB),established in 1987, to the S$60 million (Singapore dollars) Centrefor National Product Research (CNPR) opened earlier this year incollaboration with London-based Glaxo Holdings plc. With morethan 200 researchers, many of them from abroad, the IMCB hasquickly established its reputation. It has business deals withcompanies such as Amylin Pharmaceuticals Inc., of San Diego, andLynx Therapeutics Inc., of Hayward, Calif.

Another recent initiative by the Singaporean government was thesetting up of its own cluster development fund with S$1 billion toinvest in what Teoh describes as "strategic projects inmanufacturing." Biotechnology, he added, "is one of the clustersearmarked for support by this fund. We will make available this fundto attract biotechnology companies which are ready to consideroffshore manufacturing in Singapore."

Another source of Singaporean government funds for biotechcompanies is Singapore Bio-Innovations (SBI) Pte Ltd. SBI startedwith S$40 million that the company invests in biotech companies. n

-- Michael Kenward Special To BioWorld Today

(c) 1997 American Health Consultants. All rights reserved.