Venture capital investment in biotech companies increased by 20% to €1.4bn in Europe last year, with three out of four of the top venture fundraisings coming from the UK, according to figures compiled as part of Ernst & Young’s twentieth Beyond Borders: The Global Biotechnology Report 2006.
In the US poor IPO performance led venture capitalists and their portfolio companies to look to deals for exits or sources of financing.
William Powlett Smith, leader of Ernst & Young’s UK biotech team, said: Increased investment in R&D combined with more products in phase II and III made the European sector more attractive for investors and big pharmaceuticals. Strong R&D is crucial for long-term growth, and we welcome PF7’s (The Seventh Framework Programme of the European Union) proposal to double public R&D funding to more than €70bn from 2007-2013. Further R&D funding is also central to realising the potential of agricultural and industrial biotech. Industrial biotech, especially, is a very exciting area with more research into alternatives to fossil fuel.”