The biotech industry in most of the EU's new member states lags behind that of their Western European neighbors, despite many declaring biotech a national priority. The 14 allbio report produced by EuropaBio and Zurich-based Venture Valuation is the first to gather data on the state of the biotech industry in the 12 new member states and 2 candidate countries. The report identifies 260 biotech companies—70% are in the service sector—operating in these countries and at least 18 therapeutic products in development. Hungary, Poland, the Czech Republic and Estonia lead the group, although the report found no correlation between a country's gross domestic product and the strength of its biotech sector. According to Patrik Frei of Venture Valuation who authored the report, despite a highly educated workforce, these countries lack support structures for small and medium-sized enterprises and funding for intellectual property and technology transfer. “It is essential to get these fundamentals right because private equity and venture capital will not invest without them,” Frei notes. Erno Duda, who heads the Hungarian Biotechnology Association, notes that the Hungarian biotech sector has grown from 10 to 110 companies in only a few years. “Hungary has a strong science base, especially in medicinal chemistry,” he says. “The biggest obstacle now is lack of management knowledge. But we are beginning to have the critical mass of companies to make a cluster.”