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Bridging the gap between innovation and later-stage financing for biotech in Europe

  1. Jing Gong

    1. Traverse Biotech, New York, NY, USA.

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  2. Jean-Loup Romet-Lemonne

    1. Traverse Biotech, New York, NY, USA.

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  3. Brandy Houser

    1. Traverse Biotech, New York, NY, USA.

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Scientific innovation is global and distributed across regions where there is a combination of government funding and academic centres of excellence. However, scientific translation into biotech companies is concentrated in regions with professional investors and with access to public markets that have high trading volume, such as the NASDAQ stock exchange in the USA. Europe continues to be a leader in life science innovation, but its biotech industry remains approximately a quarter of the size of the USA in terms of both the number of companies and the value of venture financing. Here, we analyse venture deal data and publicly available data on the NASDAQ to identify specific challenges for biotech development in Europe. We then discuss the differences in the economic dynamics between the USA and Europe and highlight strategies on how to bridge the gap.

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Nature Reviews Drug Discovery 22, 438-439 (2023)

doi: https://doi.org/10.1038/d41573-023-00074-0

Updates & Corrections

  • Correction 01 June 2023: The analysis shown in Figure 1a and b of the article has been revised to include deals with a value >$100,000, announced between 2021–2022, available on the analysis date of 23 May 2023. The overall trends discussed in the article remain the same. With the updated inclusion criteria, companies in Europe received ~US$11.2 billion over 231 deals in venture financing rounds in 2021–2022 and companies in the USA received ~$62.5 billion over 1,039 deals, and the average deal size was approximately one and a half times greater for the US companies. With the original criteria, companies in Europe received ~US$10.2 billion over 216 deals and companies in the USA received ~$43.5 billion over 382 deals, and the average deal size was approximately two times greater for the US companies. The data shown in Figure 1c, which illustrates differences for the top 10 deals in Europe and the USA, remain the same. The supplementary file has been updated with the additional deals.

  • Correction 05 September 2023: An error was made in Fig. 1 and in the second paragraph of “Value of venture financing rounds” in the description of the revised set of deals in the corrected version of the article published on 1 June 2023. With the updated inclusion criteria, companies in Europe received ~US$11.2 billion over 483 deals in venture financing rounds in 2021–2022 and companies in the USA received ~$62.5 billion over 1,965 deals. These data show that the average deal size for US-based companies is ~1.4 times that of Europe-based companies. Further details have also been added to the supplementary file to clarify the assembly of the dataset and its analysis, including limitations related to the labelling in the database used to assemble the dataset. This has been corrected in the HTML and PDF versions of the article.

Supplementary Information

  1. Supplementary Tables

Competing Interests

The authors are equity holders of Traverse Biotech.

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