Financial crisis expected to slow R&D investment

The current global credit crunch could dent invesment in biotech research and seriously delay the discovery of new medicines, a UK scientist warned yesterday at a conference on the future of life sciences. 

As the global financial crisis drags on, “investing in biotech companies is now seen as risk taking, and will not be for the timid,” said Professor David Wield of the UK Economic and Social Research Council (ESRC) on 27 October. 

Even coping with the everyday expense of basic biotech research carried out by biotechnology companies is “increasingly becoming more of a struggle,” he noted. SMEs constitute a majority of the 1,600 or so European biotech companies. 

Drug development by pharmaceutical companies has also been “hit by the credit crunch,” while big companies are laying off staff and closing down research units instead of eyeing biotech start-ups for new ideas, he added. According to EuropaBio, the European bioindustries association, biotech medicines account for some 20% of all marketed medicines and represent 50% of all medicines in the pipeline. 

Recent EU statistics show that the R&D investment rate of European business has grown for the third year running and last year even surpassed that of the United States. However, the European Commission notes that this positive development could be undermined by the current financial crisis. 

EU Science and Research Commissioner Janez Poto?nik has thus called on governments and the private sector not to reduce their research spending. He argues that sustained investment in innovation can help to relaunch the overall economy, because major societal challenges such as security of energy supply, food safety and climate change will remain long after the resolution of the financial crisis.

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