The overall outlook for the biotechnology sector still looks bright though the future appears to be less bright than it seemed a year ago, according to a new study out this morning.

The 200-respondent survey, compiled by Global Life Science Ventures and presented at Sachs Associates’ Biotech in Europe Investment Forum, held in Zurich, Switzerland, looked at the opinions of biotech executives and members of the investment community and 79% of those polled are based in Europe. Of the latter group, 68% see the future of the European biotech sector as fairly or highly positive, down from 75% in 2006 and this tempered optimism is perceived to be due to recent clinical results and drug approvals, which are seen by 34% of European participants as having a negative impact on market sentiment, whereas only 20% see a positive effect.

However, despite some high-profile late-stage failures, big pharma’s attitude toward biotech companies is considered by 80% of European respondents to have improved in recent years and 69% also consider that drugmakers have made more effective use of biotechnology innovations to fill its pipelines in recent years. The survey also noted that there has been a positive shift in the perception of the funding environment for early-stage biotech companies in Europe.

While still viewed as difficult or very difficult by 62% of European respondents, this number is down from 74% last year, while 23% view it as good or excellent, up from 13% last year. The US funding environment is again considered good or excellent by 45% of Europeans, while only 18% consider it difficult or very difficult, though North American respondents were much more likely to view getting funds as difficult. The survey also suggested that Europe and the USA are now considered to have similar market conditions for initial public offerings.

The two most important factors for the success of an IPO were considered to be a late-stage product and a strong management team. The number of products in the pipeline came third, followed closely by the size of the therapeutic market and the survey also concluded that the investment community was more likely than biotech executives to consider Europe as more attractive than the USA.

Peter Reinisch, a partner at GLSV, said the results show that the European biotech sector “is maturing and continues to be viewed positively by a large majority of respondents, despite some difficulties with clinical trials and drug approvals”. He added that “with all the fundamentals in place, the sector will continue to grow and fulfill its expectations as the source of innovative new drugs for the pharma industry’s pipeline”.