Research-intensive companies have been hardest hit since the financial crisis began, with venture capitalises shying away from niche biopharma firms that can spend up to 15 years working for a breakthrough that might spawn new medicines.
The report, presented at a meeting of policymakers, industry leaders and financiers in Brussels this week (1 December), calls for a new European Biopharmaceutical Innovation Fund to keep the sector afloat.
SMEs across Europe have suffered from the liquidity crisis due to difficulties securing working capital and the ongoing challenge of late payments. However, the impact of decreasing venture capital funding will not be felt for a decade.
The study says investors are now looking for lower risk/reward ratios at a time when 40% of SMEs in the biopharma industry say they will need access to capital within the next 12 months.
It recommends offering tax concessions and developing co-investment mechanisms at EU and national level to stimulate investment. Identifying and disseminating best practice in technology transfer and commercialisation could also help boost the sector, according to the report.
Quicker approval for new medicines developed by young companies could also help accelerate the timeframe for business angels to get a return on their investment.
Giulia Del Brenna, head of the EU executive's Competitiveness Unit for Pharmaceuticals and Biotechnology, said the industry was central to Europe's ambition to put innovation at the heart of policymaking.
"We have a responsibility to ensure that Europe's knowledge economy – especially the biopharmaceutical sector – weathers the current economic climate, and we will act to ensure adequate support," he said.
Emmanuel Chantelot, executive director of European Biopharmaceuticals Enterprises group, said the sector faces challenging times, and praised the European Commission for working with industry to address the problems.
The meeting was also attended by the European Investment Bank and European Investment Fund, which have ramped up their support for SMEs since the economic crisis broke.
