Biotech in France: What’s holding back progress and how to move forward?

France biotech

Each year France Biotech publishes the “Panorama France Healthtech” report, which assesses the progress made by French healthtech and the areas in which the ecosystem needs to improve. In this article, we delve into the report to take a look at where the French industry stands.

France’s healthtech sector is a notable part of the European biotech landscape, characterized by its diverse and growing array of companies. Spanning biotech, medtech, and digital health, this sector includes more than 2,600 companies including 820 biotechs. It supports around 60,000 jobs, illustrating its importance not just in innovation but also in the French economy as a whole. Within this ecosystem, France has carved out a niche as a leader in the field of rare diseases in Europe.

However, France’s biotech ecosystem faces a set of challenges. While France’s position offers a glimpse into the potential for groundbreaking health solutions, it also opens up discussions on the regulatory and funding hurdles that need to be addressed for the sector to flourish further. As we explore the French healthtech sector, we’ll look at both its achievements and the obstacles it faces.

Table of contents

    The current state of French biotech

    The French biotech sector has always been a pivotal player in Europe’s life sciences landscape. As we navigate through the complexities of modern medicine and healthcare demands, France’s biotech industry continues to evolve, marked by significant growth in digital health and a sustained commitment to addressing rare diseases.

    The Panorama report counted 20 more biotech companies in 2023 than in 2022 for a total of 820 companies. Among these companies, one out of four is working in oncology, and 21% of the solutions French biotechs are developing address rare diseases. The most notable growth in the number of companies in the healtech industry is in digital health with 50 additional companies in 2023. Almost half the companies in the industry are start-ups and a third have been around for more than 10 years. The industry is gaining in maturity but younger companies, like in other countries, might struggle with funding.

    The repartition of the stage of development of French biotech products is also important to note. While 10% of the solutions produced by French biotech companies are commercialized more than half of total French products are in the research and proof of concept stage (27%), or in pre-clinical phase (32%). The rest are relatively equally spread between phase 1 to 3 clinical trials with only 6% in phase 3 and 5% in phase 2b. With 59% of French biotech products in the earliest stages of development, the share of solutions in advanced phases is almost not progressing.

    Repartition of products by development stage

    Original graph taken from the Panorama France Healtech report 2023 and reproduced here in English.

    France’s leadership in rare diseases

    France’s prominence in the rare disease domain underscores its capacity for deep scientific inquiry and therapeutic innovation. With a strong network of research institutions and biotech firms dedicated to uncovering treatments for these often overlooked conditions, France is making efforts to establish itself as a leader in this critical field.

    An example of France’s dynamism in this area lies in the rare disease-specialized biotech company Amolyt Pharma. Last week the company announced its acquisition by AstraZeneca with an upfront payment of $800 million and potential milestone payments of $250 million for a deal of a total potential value of $1.05 billion. This move grants AstraZeneca access to eneboparatide, a promising treatment for hypoparathyroidism in phase 3 designed to normalize calcium levels while avoiding kidney disease and excessive calcium supplementation.

    Sanofi, the French biotech giant is also involved in rare diseases and announced in January the acquisition of Inhibrx for approximately $1.7 billion, aiming to expand its portfolio with INBRX-101, a promising therapy for alpha-1 antitrypsin deficiency (AATD), a rare lung and liver disease. INBRX-101, currently in phase 2, is a recombinant human AAT-Fc fusion protein that has shown potential in early trials to normalize serum AAT levels with monthly dosing, potentially offering significant improvements in treatment options and quality of life for AATD patients. This acquisition aligns with Sanofi’s strategy to enhance its rare disease portfolio, with the transaction expected to close in Q2 of 2024.

    French biotech is faced with challenges

    New startups in France encounter funding challenges, partly due to the selective nature of investors. The Panorama report emphasizes the importance of a supportive investment landscape, especially for nascent companies that are crucial for the sector’s innovation and growth.

    The report shows that the number one concern of French biotech companies is finding funding sources and actually raising funds with 67% of the surveyed entities placing it as their top challenge. Not only is it the biggest concern but it is also a growing concern since this figure has seen a four percent increase since last year’s survey.

    Concerns among French healthtech companies according to a France Biotech survey

    Original graph taken from the Panorama France Healtech report 2023 and reproduced here in English.

    Another element of the Panorama report is in line with global biotech trends of mergers and acquisitions (M&A). When French biotechs were asked about the exit strategy they considered the most, 47% answered M&A and only 34% answered going the full journey to market access. This is a global trend and with the U.S. dominating the biotech industry, French promising assets might become tomorrow’s biotech giant’s property. This trend offers young companies additional perspectives to get their solutions to the market at a time when funding sources are more focused on advanced products.

    While the French company Sanofi has surpassed a $100 billion market cap, the list of companies in this exclusive club is very much dominated by the U.S. This suggests that France could enhance its standing in the global biotech arena by leveraging its strengths in niche areas, such as rare diseases.

    France’s government strategy to speed up the industry

    The French government’s Plan Santé 2030, part of the broader France 2030 initiative, represents a significant commitment to revitalize and propel the nation’s standing as a leader in healthcare innovation within Europe. With an overall budget of €7.5 billion allocated specifically to the health sector, the plan aims to foster breakthroughs across various domains, including biotherapies, digital health, and emerging infectious diseases. Key facets of this initiative involve streamlining administrative procedures to facilitate clinical research, supporting the growth of promising startups, and ensuring that France can attract and train the talents necessary for tomorrow’s medical advancements​​.

    A notable aspect of the government’s strategy is the distribution of funds across several crucial areas. This includes substantial investment in research and development infrastructure, clinical trials, and the acceleration of biotherapies and digital health solutions. Additionally, a significant portion of the budget is dedicated to supporting industrial investments and the growth and industrialization of healthcare startups through Bpifrance, the French Public Investment Bank​​.

    The plan also emphasizes the need for France to be prepared for future pandemics, allocating funds to enhance the nation’s readiness against emerging infectious diseases. This initiative aims not only to address immediate healthcare challenges but to ensure long-term preparedness against potential health crises​​.

    This plan reflects the French government’s ambition to bolster domestic innovation by providing financial support, simplifying market access for new treatments, and fostering a more integrated dialogue among various stakeholders in the life sciences industry.

    How to take French biotech to the next level?

    To move forward and address the challenges the French biotech sector faces, the Panorama report outlined strategic areas of improvement in three key areas:

    Investment landscape

    Creating a more supportive investment landscape is crucial for nurturing innovation and growth within the French biotech industry. Government incentives, such as tax breaks for investments in R&D and biotech startups, could be pivotal. Additionally, public-private partnerships (PPPs) can leverage private investment while mitigating risk through government backing. Enhancing the visibility and attractiveness of French biotech firms to foreign investors is also essential. This could involve organizing international biotech forums in France, showcasing the country’s innovation potential and success stories to a global audience.

    Regulatory simplification

    Streamlining regulatory processes is key to accelerating innovation. Recommendations from the Panorama report include creating a more agile regulatory framework that allows for expedited review and approval processes for biotech innovations, particularly those addressing unmet medical needs. Adopting a “sandbox” approach, where new technologies can be tested in a controlled environment with regulatory oversight, may encourage innovation while ensuring safety and efficacy. Furthermore, enhancing communication and collaboration between biotech companies and regulatory bodies could help clarify expectations and speed up the approval process.

    International partnerships and reindustrialization

    Global collaboration is fundamental to the sector’s growth, offering access to new markets, technologies, and expertise. France could focus on forging strategic partnerships with leading biotech regions, such as the United States’ Silicon Valley and Boston area, as well as biotech hubs in Asia and Europe. These partnerships could involve collaborative R&D projects, exchange programs for scientists and entrepreneurs, and joint ventures. Reindustrialization, with an emphasis on biomanufacturing capabilities within France, can reduce dependency on foreign production and supply chains. Investing in state-of-the-art biomanufacturing facilities and adopting advanced manufacturing technologies, such as continuous manufacturing and automation, will be critical for enhancing the sector’s resilience and self-sufficiency.

    All in all, France is a significant biotech player in the European landscape and shows potential for improvement especially if it manages to leverage its proficiency in niches such as rare diseases. However, Europe is still far behind the U.S.’s dynamism, and French start-ups are faced with the great challenge of funding at a time when investors seek to mitigate the high-risk nature of biotech investment by focusing on companies with late-stage candidates, which are still too rare in France.

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