07 July 1997 00:00 [Source: ICB]
Europe's biotechnology industry is coming of age and is set to become a crucial part of the region's future.
The European biotechnology industry is now a mature industry with more than 700 firms. Although it has yet to make any money overall, its growth will be of great importance to the future of Europe. To assess where it is going, over 500 delegates met at EuropaBio '97, the first annual congress of the new bioindustry organisation, held in Amsterdam last month.
At the congress participants were made aware of two 'gaps'. A gap in the commercial exploitation of biotechnology which is opening up between Europe and the US; and a gap between the technical progress of the industry and public acceptance. The latter was graphically illustrated by a lorry-load of soya beans, generously provided by Greenpeace, which met delegates at the doorway to the conference on the first morning (ECN 7 July 1997, p25).
The event was used to launch the report Benchmarking the Competitiveness of Biotechnology in Europe, which had been commissioned by EuropaBio. In the study, four scenarios for the growth of the biotechnology industry in Europe were presented; fast, steady, limited and failed. In the 'fast' scenario the industry would grow from Ecu40bn ($45bn) in 1995 to Ecu250bn in 2005, with employment growing from 300 000 to 3m over the same period. In the 'failed' scenario the industry would be almost halved to Ecu25bn by 2005. Which scenario will win out in the end will be decided by the environment in which biotechnology has to operate in the future.
According to the report: 'Europe has made important progress in recent years. But it remains well behind the US in virtually every measure of competitive performance and risks losing ground in the future. The US lead is largely due to a significantly more supportive external business environment.'
The report also acknowledges that biotechnology is now an integral part of the pharmaceutical industry, with biopharmaceuticals accounting for 13% of all new drugs developed between 1990 and 1994 and 5% of all global pharmaceutical sales. There were 770 biotech drugs in development at the end of 1995, with 63% of these coming from the US and 25% from Europe. There were 206 gene therapy drugs in development at the end of 1995, with 70% of these coming from the US and 22% from Europe.
The gap is even greater in agricultural biotechnology. Most R&D takes place in the US and Canada; more products have been approved for use in the US and Japan than in Europe; and US farmers are already making great use of transgenic crops. The acreage of transgenic crops cultivated in Europe is negligible.
'What this study shows is that Europe is doing better, but the US is still driving the worldwide bio-industry revolution,' said Keith McCullagh, vice chairman of EuropaBio and chief executive officer of British Biotech. 'If we pull together, we can catch up. If we do not, the gap will widen.'
It is generally agreed that the science base in Europe is as strong as that in the US. A number of factors have been put forward to explain the lead position of the US in biotechnology. It is said to be more difficult to raise venture capital for biotechnology in Europe, although some observers say that there is plenty of money and that this is due to a lack of good business plans. The US also has a more entrepreneurial business culture, and the regulatory and intellectual property framework in the US is more coherent and favourable.
|PREDICTED GROWTH OF EUROPEAN
BIOTECHNOLOGY (ECU BN)
|Food & drink||17||70||35||18||6|
However, it may be that the European biotechnology industry is simply on a learning curve and that this self-assessment is just part of that process. The latest report from Ernst & Young described 1996 as a tremendous year for the industry with encouraging signs for both job creation and continued expansion. Compared with the previous year, 1996 revealed a 60% increase in job creation and a 23% increase in the number of companies. Biotech companies raised a total of Ecu1.6bn in new equity in 1996 compared with Ecu400m in 1995.
The programme for changing the business environment for biotechnology will also involve winning support from the public. This could present a major problem for the industry, particularly in the light of the results of the latest Eurobarometer survey (ECN 7 July p28).
In response to this, EuropaBio has produced a Draft Core Ethical Values document. Among its notable general principles, EuropaBio confirms opposition to reproductive human cloning, and commits itself to dialogue with those concerned about ethical and societal implications of biotechnology. Other issues addressed include animal welfare, protection of medical information, alteration of human sperm, eggs and embryos, consumer information for food products, and conservation of genetic diversity.
The document is seen by EuropaBio as being just the first step in a permanent process through Which it intends to engage in open dialogue on ethical questions raised by the use of modern biotechnologies.
'Clear and predictable ethical boundaries, based if possible on societal consensus, have become a strategic requirement for bioindustry development', argues Erik Tambuyzer, chairman of EuropaBio's ethics task force and a senior executive with Genzyme.
'But these boundaries will inevitably shift over time, as we open up new technological capabilities with possible new ethical issues embedded in them,' says Tambuyzer. 'So a snapshot of the ethical consensus today may well be unreliable as a navigational tool a few years from now. This means that Europe's bioindustry has to build a permanent process which continuously gives us the degree of clarity we need to invest for the future. It has to become part of our business model.'
There is plenty of room for optimism about the future for biotechnology in Europe. However, the industry will have to remember to 'mind the gap'.
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