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France Biotech Presents the Results of Its Annual Study Panorama of the Life Sciences 2012


6/6/2013 9:10:38 AM

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Paris, le 6 juin 2013 - France Biotech, the association of French entrepreneurs in the Life Sciences, published the eleventh edition of its annual study “Panorama of the Life Sciences Industry,” which reports on the international and domestic industry trends in 2012/2013. This year, 186 French companies took part in the study.

“This study underlines the dynamism and wealth of our industry, which affects a number of sectors, ranging from medical devices and therapeutics to green and industrial biotechnology (such as biofuels and biomaterials). With less R&D investment than the Pharmaceutical industry, our sector is able to bring more products into clinical phase trials. The fact that the industry achieved a level of maturity in 2011 was confirmed in 2012 by the continuation of external growth and consolidation activities by French companies. Our young companies represent the growth potential for the industry of tomorrow. It is time for our government and industry leaders to put the necessary resources behind this process.

Venture Capital, which remains “THE” principal source of financing for our industry, showed strong growth following a slow year in 2011, while our sector continues to lead Europe in terms of support from the stock market, with eight IPOs in 2012 and three already in 2013. Each Small and Mid-Size Enterprise (PME) in our industry is an Intermediate-Sized Enterprise (ETI) in strength and could be a market leader of tomorrow. France Biotech will remain vigilant in the face of future reforms and will continue to encourage the government to reconsider its position on recent reforms” claims André Choulika, President of France Biotech.

France Biotech reiterates its proposals for the development of this industry: To maintain employment in our PMEs, it is essential that the JEI status be restored:

-- Ensure that all the ceilings of the JEI effectively disappear and maintain the definition of the designation as it exists, without derailing it by adding vague ideas of what might be considered innovation. The lack of a fiscal definition of innovation will cause an explosion of government spending and eventually lead to cutting important reforms in the short term. A strong innovation policy needs to be maintained and populist measures should be avoided. Breakthrough innovations developed by our companies need competitiveness to become assets for France.

-- Lengthen the duration of the JEI designation from 8 to 15 years for companies with R&D spending of at least 20% of total spending after 8 years (and not more than 15% for the first 8 years), in order to reinforce JEI companies working through the long R&D cycles required by many industrial domains.

-- Put in place a total tax exemption on capital gains for all shareholders (individuals, corporations and investment funds) that hold shares for at least two years, in all JEI companies and all companies that have been in business less than 20 years that had the status JEI for at least eight years, in order to promote early investment and growth to ETI size and to limit sales of JEI or former JEI companies to foreign groups.

“With the JEI designation, the government has a pathway out of the fiscal mess it has put itself in by taxing capital gains. The fiscal impact would be minimal for France and it would redirect investments towards high-risk companies that offer strong potential in terms of creating value, jobs and exports. It is an unprecedented opportunity for François Hollande that would demonstrate a strong policy focused on innovation and the future,” affirms André Choulika.

Venture Capital and the stock market cannot be the only sources of financing for innovation:

-- Direct at least 5% of Life Insurance funds to JEI status or PME companies that have been graduated from JEI status for less than 5 years as put forth in the new JEI status proposal from France Biotech: 20 years, as recommended by the “ Rapport Gallois”.

To create an industrial fabric, it is essential to put in place:

-- The establishment of a collaborative Research Tax Credit (CIR), beyond the 30 M€ threshold per company, which would be granted for research collaborations with companies having a JEI status or a bpifrance (OSEO) innovative company accreditation. This proposal would result in growth for PMEs and national employment, as well as for the innovation of large groups.

“Jobs, exports and economic growth will follow and the benefit will be collective,” stresses André Choulika, President of France Biotech

France

Geographic Distribution

Among the 186 companies in the study, 55 are headquartered in the Ile-de-France region (30% vs. 33% in 2011) and 35 in the “Rhône-Alpes” region (19% vs. 15% in 2011), followed by “Languedoc Rousillon” in third place with 15 companies (8% vs. 8% in 2011), “Midi- Pyrénées” with 13 companies (7% vs. 6% in 2011) and “Pays de la Loire” with 11 companies (6% vs. 8% in 2011). The “PACA” region fell from third place to 6th place with only 10 companies in 2012 (5% vs. 8% in 2011). 54% of companies originate from the academic sector (vs. 49% in 2011).

France

Geographic Distribution

Among the 186 companies in the study, 55 are headquartered in the Ile-de-France region (30% vs. 33% in 2011) and 35 in the “Rhône-Alpes” region (19% vs. 15% in 2011), followed by “Languedoc Rousillon” in third place with 15 companies (8% vs. 8% in 2011), “Midi- Pyrénées” with 13 companies (7% vs. 6% in 2011) and “Pays de la Loire” with 11 companies (6% vs. 8% in 2011). The “PACA” region fell from third place to 6th place with only 10 companies in 2012 (5% vs. 8% in 2011). 54% of companies originate from the academic sector (vs. 49% in 2011).

Real growth from the stock market

In 2012, there were 36 French Life Sciences companies listed on public stock exchanges that combined to employ 3 663 employees, invest 302 M€ in R&D and generate 583 M€ in revenues (+9% from 2011). The collective market capitalization of these companies on May 15, 2013 was nearly 4,1 B€. Carmat, (FR0010907956, ALCAR) an Ile-de-France area company that recently gained approval to conduct human clinical trials of its artificial heart, continues to hold the highest market capitalization (over 525 M€ on May 21,2013) among the more than 200 total companies listed on the NYSE Alternext stock exchange.

A total of 146 M€ was raised from the public markets in 2012, a strong increase both in value (+59%) and in number (+33%) compared with 2011. The largest operations were completed by DBV Technologies (41 M€), EOS Imaging (38 M€) and Adocia (27 M€). As in 2011, there was a predominance of MedTech companies among those filing for IPOs in 2012 (6 of 8 in 2012 vs. 5 of 6 in 2011). The reliance on public investors continues to be a key resource for the Life Sciences sector, as three companies have already conducted IPOs in 2013, raising a combined 31 M€ (Spineway, Spineguard et Erytech Pharma).

Venture capital perks up in 2012

Investments by venture capital funds increased in 2012 to 138 M€ (via 41 deals), against 121 M€ in 2011 (via 38 deals). Allocation of investments by funding round was well distributed, with Series B financings leading the way at 49 M€, followed by Series C financings of 34 M€, Series A financings of 26 M€ and Series D financings of 10 M€.

Other sources of financing

Corporate Venture investments made by Pharmaceutical companies play an important role in supporting this innovative sector in France, with notable support coming from Mérieux Development in 2012. Seed funding by French Business Angels was stable in 2012 in comparison with 2011, amounting to just over 5 M€ both years. French Life Sciences companies were among the early adopters of crowdfunding in 2012 when Toulouse-based biotech company ANTABIO recorded what has been described as the first crowdfunding operation ever completed by a biotech company.

A rich pipeline of therapeutic products

289 total products were declared this year, ranging from the proof of concept stage to commercialization, and 51% (95 of the 186) of companies that responded to the survey reported having a therapeutic product under development. On average, the 95 companies developing therapeutic products are 9 years old, have 25 employees, maintain 3 partnerships, spend 3.4M€ a year on R&D and exploit 14 patents. The dominant therapeutic area of focus remains Oncology (29%), while this year saw an increase in products addressing Infectious Diseases (17% vs 8% in 2011), the Central Nervous System (9% vs 7% in 2011) and Metabolism (8% vs 6% in 2011).

There are:

 134 products in Research and Proof of Concept (vs. 137 in 2011)

 55 products in Preclinical development (vs. 55 in 2011)

 33 in Phase I studies (vs. 29 in 2011)

 32 in Phase II studies (vs. 35 in 2011)

 8 in Phase III studies (vs. 6 in 2011)

 4 in Registration (vs. 3 in 2011)

 25 products entering commercialization (vs. 20 in 2011)

70 companies reported having other, non-therapeutic products under development, such as in vitro or in vivo diagnostics, medical devices and other advanced technologies. On average these companies are 9 years old, have 21 employees, maintain 3 partnerships, invest 1.5M€ in R&D annually and exploit 6 patents. A total of 89 Diagnostic products are being developed by 40 different Life Sciences companies. 19% of these Diagnostics are targeting Oncology, while 16% focus on the Central Nervous System and 15% address the Immune System. Medical Devices companies continue to provide an impressive stable of innovative products. This year saw 9 companies report a total of 19 medical devices under development, with most products focusing on Oncology (26%), Orthopedics (21%) and Cardiovascular (16%).

Life Sciences funding in Europe

IPO financing in Europe

In recent years France has drawn on the resources of the public markets more actively than other Life Sciences sectors in Europe. From 2007 through 2012, there were 27 successful IPOs on the NYSE Euronext or Alternext exchange conducted by French Life Sciences companies that raised a total of 491 M€. Over the same time period, there were six IPOs by British Life Sciences companies on the London Stock Exchange that raised a total of 38 M£, three IPOs by Swiss Life Sciences companies on the SIX Swiss exchange that raised CHF 137 M and two IPOs by German Life Sciences companies on the Deutsche Börse that raised 48 M€.

VC financing in Europe

Equity financing of venture-funded companies varies drastically from year to year in many countries in Europe.

Study tudy Methodology

This study of the Life Sciences sector in 2012 was conducted by France Biotech in Q1 of 2013 using a survey questionnaire. The responses of 186 companies were retained. The criteria for participation are as follows: have an activity in a domain of the Life Sciences in France; allocated at least 15% of total spending to R&D; and have less than 250 employees.

About the Panorama of the Life Sciences Industry study

Since 2002, France Biotech has conducted the Panorama of the Life Sciences Industry in France, a unique study that provides an annual update on the growth and dynamism of this innovative sector in France. The results of this study allow France Biotech to ground its proposals to the government in hard facts and to effectively represent the entire industry. The Panorama analyses data from independent companies allocating at least 15% of total spending to Research and Development costs. France Biotech surveyed more than 400 companies via a secure online questionnaire and has analyzed the data provided from 186 of the 192 total responses. The results of this survey will remain the property of France Biotech.

About Life Sciences in France

A second generation of Life Sciences companies has arrived in France in recent years. Over 250 companies in the Life Sciences exist, consisting of four main types of businesses. Therapeutics companies remain the most numerous, followed closely by diagnostic and medical devices companies, while an emergence of companies in the fields of cosmetics and the environment has occurred in recent years.

About France Biotech

France Biotech is the association of French companies in the Life Sciences sector and their partners. Its mission is to contribute to domestic growth in this innovative industry and to support France’s leadership role within the European Life Sciences community. More specifically, France Biotech acts as an engine of change by interacting with the government, economic organizations, academic institutions, the media and the investor community to ensure the prioritization of the Life Sciences sector in France and the improvement of the economic, legal, regulatory and managerial environments for this important industry.

Press Contacts:

France Biotech

Haude Costa / Déléguée Générale

Haude.costa@france-biotech.org

Tel : 01 56 58 10 70 / 06 84 25 88 27

Alize Public Relations

Caroline Carmagnol et Christian Berg

caroline@alizerp.com/christian@alizerp.com

Tel : 06 64 18 99 59/01 42 68 86 43



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