Diana Turner from Drug Discovery World reports.
While biotech has so far been dominated by the US, since the inauguration of Donald Trump in January 2025, there has been considerable uncertainty, with significant cuts to medical research funding from the National Institutes of Health (NIH) and the promise of industry-specific tariffs on the horizon. In response, many of the big pharma companies and investing significantly in the US in the hopes of avoiding the costly tariffs, but where does that leave smaller companies and start-ups?
In contrast, Europe appears to offer relative stability and financial security. European universities have recognised the opportunity and introduced new grant funding programmes to encourage scientist to relocate, resulting in a ‘brain drain’ of talent from the US. An extraordinary 75% of 1,600 US scientists who answered a recent Nature poll said that they are considering leaving, with many looking for jobs in Europe and Canada1.
So, is it Europe’s time to shine on the global biotech stage? Can the region overcome its challenges to take a leading role?
Barriers to innovation
Biotech in Europe has traditionally been constrained by a number of factors, most significantly a lack of consistency between the countries that make up the European Union (EU) and poor collaboration with those outside it, like the UK. According to the European Federation of Pharmaceutical Industries and Associations (EFPIA), advanced therapy medicine products (ATMP) clinical trial activity was twice as high in the US and almost three times as high in China than in Europe between 2014 and 20212. They report that the number of ATMP trials conducted in the US and Asia-Pacific region grew by 70% and 67% respectively, while Europe remained stagnant. They also report that the US currently has 50% of the world’s ATMP manufacturing facilities, stating that “Asia is fast becoming the most competitive region for attracting ATMP clinical trials (255 in 2021), but Europe is unfortunately in decline (89 in 2021)2.
The decline in Europe in recent years has also been noted in other areas too. Zymewire’s 2024 Biopharma Recap Report noted that, while North American biopharma companies saw a 1.2% increase in funding and APAC funding saw an increase of 55.3%, Europe experienced a 25.4% decline in funding. Although the European Medicines Agency (EMA) is taking positive steps toward simplifying the regulatory process at a European level with the clinical trial regulation (CTA) adopted in 2022, there is still the risk that approved therapies may not reach patients in all EU countries due to delays in local availability and the lack of appropriate legislation.
Max Baumann, Co-founder of Treehill Partners, points to the EU’s fragmented approach and the added complication of economic uncertainty from the US as the key hurdles to overcome in the EU funding landscape: “Private investment remains highly selective, especially at later stages, creating bottlenecks for innovation and leaving many companies stranded after early funding rounds. Geopolitical tensions are also reshaping the sector. Biotech is increasingly seen as strategic, prompting the EU to bolster domestic value chains and consider protective trade measures. European biotech’s future will depend on a significant reshuffling of the broader biotech ecosystem within Europe to make available the capital pools required not only to develop foundational science but also generate commercial value therefrom by advancing strongly into later stages of the value chain.”
The rest of Europe could benefit from more support for clinical trials like the UK, which has invested quite substantially in ensuring short, guaranteed review timelines. SixPeaks’ CEO, Philip Just Larsen, expands on how the EU is meeting the challenge: “Unlike other European countries, there’s also no separation between the ethical review board and the medicines authority. In my opinion, it would be helpful to align local and national review board approvals in Europe. The Accelerating Clinical Trials in the EU (ACT EU) initiative aims to make EU more competitive for innovative clinical research by harmonising and streamlining procedures in order to accelerate clinical trials.”
In light of these pressures, the CEOs of the research-based pharmaceutical industry have issued a stark warning to the European Commission that unless Europe delivers rapid, radical policy change then pharmaceutical research, development and manufacturing is increasingly likely to be directed towards the US. A survey of European Federation of Pharmaceutical Industries and Associations (EFPIA) member companies identified as much as 85% of capital expenditure investments (approximately €50.6 billion) and as much as 50% of R&D expenditure (approximately €52.6 billion) potentially at risk.
Roche recently announced that it will invest $50 billion into the US in the next five years, following similar US investment plans from other companies, including $23bn from Novartis, $55bn from Johnson & Johnson, and $27bn from Eli Lilly.
As the Trump administration calls for lower drug prices in the US, European drugmakers are urging Europe to allow higher medicine prices. Novartis and Sanofi wrote in a letter published in the Financial Times that European price controls on medicines hurt innovation and make the region less attractive. AstraZeneca Chief Executive Officer, Pascal Soriot warns: “Europe spends a substantially lower share of GDP on innovative medicines than the US and, as a result, is falling behind in attracting R&D and manufacturing investments, putting its ability to protect the health of its own people at risk.”
European success stories
Despite these regulatory and funding barriers, there are clear signs that Europe is taking steps to make the continent an attractive region for biotech investment and many feel optimistic about its future prospects. Qaisar Rafiq, European Head of Business Development at Kadans Science Partner says: “There is strength within Europe’s biotech industry. Take Isomorphic Labs recent $600m funding round, it demonstrates clear investor confidence and commitment to the region’s industry. There are also wider European initiatives to be positive about, with the Innovative Medicines Initiative encouraging public and private collaborations, and the statistic that European pharmaceutical industry invested $50bn into R&D in 2023, nearly doubling the 2010 funding level, again supporting investment and innovation. Looking forward, we’re positive about the European investment environment and the momentum being generated via existing programmes.”
Chiesi Group is one company firmly embedded in Europe. In September 2024, the Group launched its Biotech Center of Excellence, dedicated to developing and producing monoclonal antibodies, enzymes, and other proteins, in Parma, Italy, and has plans for further manufacturing investments in the next five years. The company seeks to align with recent biopharmaceutical advancements, and increase production in Europe, attracting international talent and investment, and creating global partnerships. “Chiesi is committed to innovation and the development of therapeutic solutions that improve patients’ quality of life,” explains Giuseppe Accogli, CEO of Chiesi Group. “Additionally, the Group plans to invest nearly €1 billion in Europe by 2030 in its manufacturing operations, with key projects such as the Biotech Center of Excellence and the redevelopment of the Nerviano (Milan) plant, which will primarily specialise in the production of carbon-minimal inhalers. These investments underscore Chiesi’s dedication to advancing healthcare while enhancing Europe’s competitiveness.”
Swiss company SixPeaks Bio is another European success story, benefitting from the eco-system in Switzerland that places emphasis on supporting the life sciences. Sirpa Tsimal, Director Global Marketing, Swizerland Global Enterprise (S-GE), explains why this is: “Switzerland’s biotech sector remained robust in 2024, driven by record private investment and deep-rooted international collaboration. Despite global financial headwinds, the industry attracted CHF 2.5 billion in funding, with private companies raising a record CHF 833 million. R&D investment and employment continued to grow to 2.6 billion (+8.3% Verus 2023), and major alliances fuelled innovation and approvals. Anchored in global partnerships, the Swiss model highlights resilience, talent, and a steadfast commitment to addressing worldwide healthcare challenges.”
SixPeaks Bio is targeting the preservation and potentially the expansion of skeletal muscle mass as a future therapeutic companion to GLP1 RAs. The company was founded in 2022, and in May 2024 it emerged from stealth mode with a pipeline of therapies, including a potentially best-in-class dual-specific antibody targeting activin type IIA and B receptors. It secured $30 million in Series A financing led by founding investor Versant Ventures, while a strategic collaboration with AstraZeneca will provide additional, non-dilutive financing of up to $80 million over two years. CEO Larsen comments: “The incubator is a very efficient way of getting companies off the ground. There’s a dense local talent base in Basel, with lots of extremely smart and skilled people – partly because of established companies like Novartis, Roche, Idorsia and Lonza – but startups and early-stage companies also to make it a really thriving hub. What makes a difference for company creators in Switzerland is that the bureaucracy burden is quite low, and that makes it easy to attract people and build new companies.”
As well as existing biotech hubs like Switzerland, there is also newfound positivity around biotech in Central and Eastern Europe (CEE), with key investor event Bio€quity Europe planned to take place in the region for the first time in 2026. Host location the Czech Republic is home to nearly 400 biotech-related entities, employing over 22,000 professionals and generating more than €3 billion in annual revenue. “We are truly honoured to welcome Bio€quity to Prague,” said Petra Kinzlová, CEO of Prague.bio. “This marks the first time the event will take place in the CEE region, a significant milestone that underscores our role as your biotech hub in the heart of Europe. Hosting this prestigious conference is a unique opportunity to showcase the strength and potential of the Czech biotech sector and to foster deeper cross-border collaboration within Europe’s innovation ecosystem.”
A European future for biotech?
This could be the start of a new era for European biotech, with a focus on creating the right conditions to attract and keep innovative researchers, companies and investors.
Lindsay Davies, CSO of NextCell, shares her thoughts: “Europe has demonstrated its resilience over the last few years in a challenging economic environment for cell and gene therapies (CGTs). I believe this is testament to the level of innovation that the region holds, with strong collaboration between academic and industrial partners to develop new, promising therapeutics. Challenges associated with pricing and reimbursement now lie at the forefront of determining Europe’s global position in the space, with a need to find viable solutions to ensure commercialisation of European developed CGTs in their own region as well as other large markets.”
In May 2025, European Commission President Ursula von der Leyen announced new funding ‘super grants’ at the ‘Choose Europe for Science’ conference, and European Research Council doubled the additional funding available for grantees relocating to Europe by an additional €2 million. In her speech, President von der Leyen said: “I believe that science holds the key to our future here in Europe. That is why I am here today, to say that Europe will always choose science. And Europe will always make the case for the world’s scientists to Choose Europe. European support has made possible breakthroughs in genome sequencing and mRNA vaccines. These examples show what we all know – the return on investment in science is unparalleled. We have world class research infrastructure. This helps make Europe a leader in fundamental research.”
She pointed to the bloc’s advantages, such as the world’s largest international research programme, Horizon Europe, and its tradition of open and collaborative science, and made key new announcements: a EUR 500 million package for 2025-2027 to attract research, increased support for early career scientists through the Choose Europe pilot under Maria Skłodowska-Curie, and the European Innovation Act and a Startup and Scaleup Strategy, to remove regulatory and other barriers, and to facilitate access to venture capital. It is hoped that these, and similar initiatives within the EU and the rest of Europe, will make the area the obvious choice for both academia and biotech business.
Von der Leyen concluded: “Europe has made its choice. We are choosing to start a new age of invention and ingenuity. We are choosing to put research and innovation, science and technology, at the heart of our economy. So, to every researcher, at home or abroad, to every young girl and boy who dreams of a life in science, as Maria Skłodowska-Curie once did, our message is clear: Choose Science. Choose Europe.”
The article was issued in Drug Discovery World DDW Volume 26 – Issue 3, Summer 2025 Read the digital issue
References:
- https://www.nature.com/articles/d41586-025-00938-y
- https://www.efpia.eu/media/676753/cra-efpia-investment-location-final-report.pdf