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(Last updated: 11 Jan 2008)
Trends and opportunities
The market
The biotechnology in France exploded onto the international scene in the 1990s and is continuing to develop and expand at a rapid rate. 2007 and 2006 were thus record years for the industry in terms of finance and funding. The French biotechnology industry is the third largest in Europe, behind the UK and Germany in terms of the number of listed companies, but further reforms could boost France to become a key driver in Europe and in the world.
There are more than 400 biotechnology companies in France. Many other companies are indirectly involved in the industry in fields such as laboratory supplies, intellectual property law and marketing. Usually, biotech companies, especially the one that make research efforts, don’t make sells until late in terms of existence as a research cycle for a product takes between 10 and 15 years. This is why companies don’t develop a turnover at the beginning of their existence and also why the general turnover in France is mainly realised by the companies that are 10 years old or more.
The biotech industry is thus requiring a lot of resources for companies to pursue their development and the main mean to get those funds is by finding external investors. 2006 and 2007 seem in this prospect to put an end to the investment crisis that occurred since 2001. The listing of French companies (Celectis, Metabolic Explorer, Genoway and Vivalis) at the stock market thus raised €500 million just for the first semester of 2007 and €129 million were also invested by venture capitalists during this period.
The biotech sector employs around 6000-7000 people. Approximately 3500-4000 of these people work specifically in research and development (R&D). Including the companies that are indirectly related to the development and production of biotechnologies, there are around 20,000 people employed in this sector.
In 2006:
- 54 per cent of biotech companies were involved in an activity related to the human health and condition
- 10 per cent related to animal health
- 10 per cent to cosmetics
- 10 per cent to human food
- 2 per cent in animal food
- 8 per cent produce material devices for research activities
Fifty per cent of all companies are involved in only one activity, 17 per cent in two activities and 15 per cent in three.
The biotechnology industry in France is driven by five main factors:
- Government and private funding to academic research
- Technology transfer between academia and biotechnology companies
- Venture capital and stock markets
- Pharma-biotech alliances
- The growth of the healthcare market
In 2005, sales made up the largest sector of the market, with 57.2 per cent of market share in value terms, and this figure is expected to double within the next couple of years. Research funding accounts for 21.7 per cent of the market and royalties represent the smallest market sector with 4.6 per cent.
One of the key strengths of the French biotechnology industry is the number of research institutions, technology parks and scientific personnel active in the industry. France is second only to Germany in the number of full-time researchers working in the life sciences sector and ranks fourth in the world in the number of scientific works published every year.
The relatively recent Young Innovative Enterprise (Jeune Entreprise Innovante - JEI) initiative is starting to have an impact on the biomedical industry in France. This new type of fiscal status came into force in 2004 and over two-thirds of French biotechnology companies are now listed in this status.
Companies in this status must spend at least 15 per cent of their total annual expenditure in R&D and in return they receive exemptions from social security costs for employees involved in the projects. These exemptions are immediately reinvested in R&D: 74 per cent recruited R&D employees, 51 per cent started new R&D projects and 49 per cent bought R&D equipment.
This status makes France the most fiscally attractive country in Europe, and similar systems have already been duplicated elsewhere in Europe (eg. Belgium). Several foreign investors have invested in French companies thanks to this program.
Several new initiatives have been established in France to develop research and development in the biomedical industry. These include a National Agency for Research and final plans for a European Institute of Technology. The aims of these initiatives are to bring the best researchers (primarily from France and Europe) together to develop French multi-disciplinary research in the fields of biomedical and biotechnological science to a leading international level.
The French Government supports the biotechnology industry, often in partnership with the private sector and the academic community. A law passed in July 1999 on innovation and research allows researchers in the public sector to:
- Create a company in order to develop their research work
- Carry out consultancy work
- Hold shares in a company
- Become a company board member
This has facilitated technology transfer from academic institutions to the private sector. The law also provides tax credits and other financial mechanisms to encourage companies to hire young scientists.
Altogether, public funding for the biotech industry reached €2163 billion in 2006.
Technology transfer is a key component of the French industry and is the reason behind a large number of companies deciding to locate near centres of research excellence.
There are seven biopoles (biotechnology centres) out of the total 71 competition clusters in France that were awarded competitiveness labels by the government and which encourage local, regional and also international cooperation in support of industry growth.
In 2004, the government injected €500 million in these clusters that bring together public and private research centres as well as training institutions. Each one of them focus on specific activities:
- Lyon BioPole (Rhône-Alpes): infectious diseases, vaccines and diagnostics (World dimension)
- Medicen Paris Region (Ile de France): high technologies for health, cancer, CNS, infectious diseases, imaging, molecular and cellular therapies, drug development (World dimension)
- Nutrition Santé Longevité (Nord Pas de Calais): nutrition, healthcare and longevity
- Atlantic Biothérapies (Pays de la Loire): biotherapy, biodiagnostics
- Innovations thérapeutiques (Alsace): from genomics to drugs, non-invasive surgery, medical devices
- CancerBioSanté (Midi-Pyrénnées, Limousin): cancer
- Orpheme (PACA, Languedoc-Roussillon): emerging pathologies and orphan diseases
In addition to these biopoles, there are eight genopoles – specialising in genomics and post-genomics research – that are organised in a general network, Réseau National des Génopoles. These genopoles bring together large public laboratories, university laboratories and advanced teaching in the fields of genomics and biology and biotechnology companies. They aim to encourage large-scale and cross-disciplinary research in projects in biological sciences and incubate innovative biotechnology companies. They are located in:
- Evry/Ile de France
- Montpellier and Perpignan/Languedoc Roussillon
- Lille/Nord Pas de Calais
- Lyon and Grenoble/Rhône-Alpes
- Marseille & Nice/PACA
- Strasbourg/Alsace-Lorraine
- Toulouse/Midi-Pyrénées (Toulouse has also developed Agrobiopole, a 300-hectare complex focusing on agricultural biotechnology, as part of the region’s biotechnology strategy)
- Rennes and Nantes/Ouest
Opportunities
Specific opportunities for Australian biotechnology companies include:
- Drug discovery and development – opportunity to initiate collaborative research partnerships, technology transfer agreements or licensing ventures.
- Collaborative research partnerships, technology transfer agreements and licensing.
- Companies with product commercialisation, business and financial expertise to partner with early stage research companies and institutions.
Biotech products related to animal food, vegetal production and environment are minimally investigated by French companies and Australian companies could therefore find opportunities for these types of products.
Competitive environment
The French biotechnology industry is dominated by small and medium-sized enterprises, accounting for 70 per cent of the companies. There are also a number of leading multinationals active in the market including Aventis-Pasteur, Roche Diagnostics and Sanofi-Synthelabo.
The dominant French companies in the market (in terms of revenue) are LFB, Ethypharm Group, CEREP, Flamel Technologies, Rhobio and Genfit. Five public biotechnology companies are Genset, Nicox, Transgene, Sangstat, Cerep, Eurofins and Flamel.
France Biotech is the French biotechnology association and the industry representative. They have been eager to help facilitate international investment in French biotechnological companies financially.
Australia has a strong international reputation for its quality of science and as a source of intellectual capital. Several French biotechnology and biotechnology application companies have invested in Australia, and CSIRO has its European research centre in Montpellier. Australia’s expertise in stem cell research and overall biodiversity is recognised by leading French research organisations and the biotechnology industry.
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