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7-Business: European biotech still dwarfed by America

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TITLE:  European biotech still dwarfed by America - report
SOURCE: Agence de Presse Medicale for Reuters Health, by Richard Woodman
DATE:   15 Jul 2004 

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European biotech still dwarfed by America - report

LONDON (Agence de Presse Medicale for Reuters Health) - European biotech
companies can still barely mount a serious challenge to American
supremacy, according to a report commissioned by the UK Department of
Trade and Industry.

The "Equity Gap" report, released on Thursday by the UK BioIndustry
Association, shows that European companies raised only 1.98 billion euros
equity capital in 2002 - about 3.4 times less than their American peers.

American companies raised an additional 4.3 billion euros through debt in
2002 compared with just over 200 million by European companies.

The report, prepared by the independent Critical l consultancy, examined
nine European countries - the UK, Denmark, Finland, France, Germany,
Ireland, Israel, Norway and Sweden - and the United States

It found that U.S. companies employed 160,000 people and generated
revenues of nearly 36 billion euros in 2002 whereas Europe employed only
87,000 people and generated less than 20 billion euros. Fifty-four
percent of U.S. biotech staff, but only 43% of Europeans, worked in
research and development.

European companies tended to be smaller, slower, less intensive and more
prone to failure than their American counterparts. In 2002, European
firms had only half as many products in pre-clinical trials as their
American rivals and had 60% fewer compounds in clinical studies.

Backers of U.S. companies appeared to be more disciplined than their
European counterparts in distributing capital. They started fewer
companies but funded them more generously, not only at the outset but
throughout their development, the report said.

Within Europe, British biotechnology companies still raised the most
money from equity sales despite a very difficult 2002 when only 676
million was raised compared with 1907 million in 2001. Germany raised 644
million in 2002 compared with 695 million in 2001 while France raised 354
million in 2002 compared with 369 million in 2001.

Investment bankers and company representatives at the UK BioIndustry
Association briefing in London said too many biotech companies were
created in Europe and further consolidation was needed. They also
criticised the lack of scientific expertise of European venture
capitalists and fund managers compared with their American counterparts.


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