Announcements of alliances and mergers involving French biotechnology firms and pharmaceutical companies can be expected over the next few months, the industry group France Biotech has forecast.

“Growth and innovation are both evident in the product and service portfolio of the French biotech sector,” says the group's annual review, which was presented at the EuroBio 2008 Congress in Paris this week. Currently, French biotech companies have a total of 73 products entering the research phase and 98 in clinical development, compared with 57 products in development at French pharmaceutical companies. Furthermore, marketing approval is now pending for 10 French biotech products, and four have already been marketed, the review shows.

“While awaiting the next opening of the stock market window, it is to be hoped that the financial deficits registered within the large pharmaceutical groups will push them towards our biotech companies,” says France Biotech.

15 French biotech companies achieved stock market listings during 2006-7 but there has been only one listing, for Ipsogen, since then. The firm, which specialises in the development and marketing of molecular diagnostic tests for cancer, was listed on NYSE Euronext’s Alternext Paris market in June.

The sector was buoyed by venture capital investments during the first half of 2008, although investments were down 8% to 87 million euros compared with first-half 2007’s total of 95 million euros, it says.

However, one positive has been the launch in April of NYSE Euronext’s Next Biotech Index, which lists 26 biotech companies and provides greater visibility for the sector, thereby rendering it more attractive, says NYSE Euronext.

The industry group also applauds the success of a number of French government initiatives undertaken to boost innovation since 2004 in terms of supporting small and medium-sized enterprises (SMEs) in the sector, but points out that this year’s Research Tax Credit reform is likely to be of help only to larger firms; the Finance Ministry has reported that only 19% of companies employing fewer than 250 employees will derive any benefit from this measure.

The budget allocated to the reform has been increased from 1.4 billion euros to 3.2 billion euros, and it will cost 10-15 billion euros over the next five years, without producing any benefits for SMEs, France Biotech warns.