A new study suggests that biotechnology. “one of Europe’s most innovative sectors” is facing “potential catastrophe” in the current financial crisis, as firms in the sector face increasing difficulties to access the funding they need to keep afloat.

A new study by French research group Alcimed, on behalf of the trade association European Biopharmaceutical Enterprises, confirms that the sector is already looking at a major funding shortfall. This is putting 20% of Europe’s small biopharmaceutical companies at risk of bankruptcy by the end of 2009, it is claimed.

This represents the possibility of 20,000 “high-skill, high-value jobs” being lost “and a permanent damage to Europe’s research”. For many, “the clock on those 18 months has been ticking ominously for some time”, EBE says, and the crisis could deepen further in 2010 if the current situation persists.

Carlo Incerti, president of the EBE, said that “this is not just about saving jobs in the short term, it’s about protecting Europe’s capacity to drive medical innovation”. He added that “if we do not support the sector, much of the innovation already created may be lost”.

Dr Incerti said that one potential solution could be for urgent assistance from the European Investment Bank. He added: “By demonstrating faith in healthcare biotechnology, the European institutions can maintain confidence and attract potential investors to come forward.”

The EBE noted that it has begun a dialogue with the European Commission regarding the recommendations outlined in the study. The association says it is hoping to see a “new collective initiative at the European level” that will help launch “immediate measures and improve longer-term programmes to sustain investments into the healthcare biotechnology sector”.