joined PA Consulting Group in 1988, and Merlin Ventures in 1996. In 2000 William founded Amedis Pharmaceuticals Ltd and in 2002 founded Delta G Ltd, a company exploiting advances in biogerontology to develop new medicines. In 2003 he co-founded Choracle Ltd, a chemoinformatics company. William also runs Rufus Scientific, helping entrepreneurs, universities and start-ups identify how to generate value from visionary science and technology.

Correspondence: William Bains, Rufus Scientific, 37 The Moor, Melbourn, Royston, SG8 6ED, UK, Tel: 0790 493 1369, Fax: 01763 263367, E-mail: wbains@gotadsl.co.uk

Revised 9 June 2006.

Abstract

The European biotechnology industry receives less funding, and less funding per company, than the North American industry, especially at the sensitive early stages of company development, and the European industry is substantially smaller in terms of employment, products and capitalisation than the US industry. The cause and effect of this relationship are explored in this paper. It is shown that if the European industry is immature it is because its growth has been slower, most probably because of low investment levels, and that the relatively lower value of biotech companies at initial public offering (IPO) is a result of the lower amount of investment they receive, not a reason for. This suggests that poor investment levels are a primary cause of the small size of European biotech companies and the European industry as a whole, not an effect of it. Investor mistrust and investment mechanisms are plausible reasons for this under-investment.