PARIS – According to the latest annual overview published by trade association France Biotech, French med-tech, biotech, and e-health companies have adapted rapidly to the COVID-19 pandemic. Many French health care companies have faced real difficulties in all areas of procurement, R&D, and sales. As of February, a quarter of these French companies were redirecting their research activity towards the coronavirus.
The new report, titled “Panorama France Healthtech 2020,” reveals that more than a hundred medical, vaccine, therapeutic, diagnostic, medical device and e-health innovations have been developed by around 15 health care companies. “Companies listed on the stock exchange and involved in the fight against COVID-19 saw their share price increase on average by 577% last year,” Chloé Evans, market research manager & international relations at France Biotech, told BioWorld.
A market worth $48B by 2030
These 2,000 companies in France, including 1,000 med-tech, 750 biotech and 200 e-health companies, generated more than $950 million in revenues last year. More than twice as much as five years ago. This represents average sales of nearly $4 million per company. This revenue is largely attributed to medical technology and in vitro diagnostic companies.
According to Boston Consulting Group Inc., the French health care sector could see sales revenues of more than $48 billion by 2030. The numbers in direct and indirect employment will grow by a factor of 3.6, from 50,000 jobs last year to 180,000 in 2030.
The emerging sector of e-health now represents 16% of health care in France, with the rise of artificial intelligence platforms used in solutions for optimizing care systems, managing patient flows, follow-up, and telehealth.
Whereas in 2017, big data represented 8% of areas of application in e-health, “this figure almost doubled this year, climbing to second place in areas of application for connected health,” said Stéphane Tholander, CEO of Cibiltech SAS and secretary of the e-health committee at France Biotech. Bioinformatics is now one of the top three areas of French health care activity.
“However, the explosion of digital applications due to the various lockdowns during COVID-19, comes up against technical barriers in hospitals, difficulties in evaluating the service provided and questions surrounding financial arrangements, with approval for reimbursement coming at a snail’s pace,” said Tholander.
R&D lies at the heart of French health care. According to the report, 52% of health care firms sprang from public academic research or institutions. “More than 60 companies are formed each year. What’s more, these companies are devoting more than half their spending to R&D,” said Evans. French med-tech, biotech and e-health companies invested nearly $975 million in R&D in 2020, nearly double the amount in 2014.
The intense R&D activity in France has resulted in the development and marketing of more than 2,000 devices with an average portfolio of three products for each company. This represents annual growth of 15%, mainly in the areas of early-stage detection, in vitro diagnostics, and imaging, centered primarily in the disciplines of surgery, neurology, ophthalmology, cardiovascular disease, and oncology.
A sector looking to the U.S.
While 95% of French health care companies favor their domestic market, one in five companies has one or more subsidiaries abroad: half in North America, 32% in Europe and 11% in Asia. “The United States, Germany, Belgium, Switzerland and Spain are among the top five countries targeted in the West, while Japan, China and South Korea constitute the top three target markets in Asia,” said Evans.
According to the report, health care companies in France raised a total of $1.8 billion in capital in 2020, down 13% from the previous year. In venture capital alone, $1.06 billion was raised last year, compared with $1.28 billion in 2019.
The average raised by each was nearly $11 million, well below the $14 million seen in 2019. While France held onto second place in European rankings in terms of the number of health care companies financed by venture capital in 2020, “it sees lower average market caps than in other European countries, particularly due to the absence of significant funding,” said Cédric Garcia, partner at EY.
French government bolsters R&D efforts
The French government did its part to support the health care sector in France. “To safeguard these critical companies in the context of the COVID-19 pandemic, we have put in place unprecedented means of supporting companies, such as early payment of research tax credits and loans guaranteed by the State,” Agnés Pannier-Runacher, deputy minister for industry, attached to the minister of the economy, finance and the recovery, told BioWorld. According to the France Biotech report, just over half of all health care companies were able to benefit from a loan guaranteed by the French government.
The French public investment bank, Bpifrance SA, provided more than $500 million in funding, which is almost three times more than in 2019. This financial assistance is spread across support for innovation ($200 million), financial partnerships ($145 million) and manufacturing ($155 million).
"We are also keeping up momentum on equity investment, with $150 million invested in the capital of health-tech companies via our specialized Innobio, Patient Autonome, Tech Seed and PSIM funds,” said Paul-François Fournier, senior executive vice president of Bpifrance Innovation. In fact, Bpifrance mobilized $167 million in health care venture capital funds in 2020, part of $720 million in total funding, including the Jeito and Biodiscovery 6 funds.
The French government has also initiated the implementation of the Tibi model. This is named after the former president of UBS France, Philippe Tibi, who last year submitted a report to the government, on a system for banks and insurance companies to get involved in the financing of startups. By 2023, $8.5 billion of investment in innovative companies will be committed to by French insurance funds and partly state-controlled funds.
Nine accredited health care funds have already started raising funds. “They will soon be able to contribute to the long-term financing of innovative biotech and med-tech companies," said Pannier-Runacher.
Franck Mouthon, president of France Biotech said that investors in health care companies need to be reassured about having continued access to the French reimbursement market. “The French government needs to guarantee continuity of funding, from the R&D phase upstream right down to acceptance onto the health care system,” said Mouthon.