This is the challenge for the current period

After a dark period due to the crisis, French biotechnology funding resumed colors in ce spring. End of April, three new companies, Neovacs, AB Science and Deinove (read "Les Echos" from May 7, 2010) have managed to reopen the market window, remained tightly closed to the sector for eighteen months. Even if these introductions proved to be more sensitive that planned, is to have restored a breath of hope to a deserted by the capitalists life sciences industry. According to the annual panorama of France Biotech, the flow of private funds accuses a free fall, plunging EUR 180 million in 2007 to EUR 65 million in 2009, its lowest level for ten years.

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In this context, the Paris stock exchange took over, becoming the year as in 2007 the first source of funding for this industry with 170 million euros of secondary levees between NicOx (EUR 100 million), Innate Pharma (24.3 million), Cellectis (EUR 22 million), ExonHit Therapeutics (17 million euros), Hybrigenics (EUR 2.8 million) and Ipsogen (EUR 2.5 million). As confirmed by Cédric Moreau, analyst at Natixis, "the France hosted the sector of biotechnologies in Europe between 2005 and 2010, recovering his behind Great Britain and the Germany".

Caution is required

For now, 2010 continues on its course. In a few days, Transgene should close on 25 May the capital increase of EUR 152 million, subscribed to 55.2 by its majority shareholder, the Institut Mérieux, which will give him the means to complete his metamorphosis in biopharmaceutical integrated and cost-effective by 2015. Yesterday, ExonHit launched a capital increase reserved for 1.5 million, eligible Act Tepa. But from excitement, caution rest implementation. As remind the severe stock market turbulence that crosses NicOx for a week, due to the uncertainty weighing on the approval by the Food and Drug Administration of Naproxcinod, the first of a new class of anti-inflammatory, dedicated to the relief of signs and symptoms of osteoarthritis. Accustomed to the hits of the stock market, the company has lost two-thirds of its capitalization for ten days. Of course, since the fateful meeting of May 12, NicOx must clarify essential points with the US health authorities. But this hazard is not common practice in the life of a company or a pharmaceutical laboratory What happens, it is certainly not necessary to play the Cassandras before even that the FDA has rendered its final opinion, July 24.

If it is to give a brake to the whole of French biotechnology which is really not needed. Wrongly or rightly, "the penalty for disappointed markets is incredibly harsh and brutal." "Sometimes it is said it is better to remain private," said Antoine Papiernik, associate partner of Sofinnova Partners, which nevertheless has several companies in the portfolio an IPO candidates ("international public offering") before the end of 2010. The credit of this venture capitalist warned, the entrance to the Belgian company Movetis on Euronext Brussels last December, with raised EUR 100 million. "We are working to refine the profile of our societies to give them the maximum opportunity to succeed and to have a stock route of quality," he insists.

Severe asthenia

The next introduction of Carmat, which decided on 28 April and hopes to raise 15 million euros on Alternext towards mid-June, should restore the balm to the heart of the sector. The totally implantable cardiac bioprothèse the most advanced in the world is the iconic project is capable of wrapping individual investors willing to support an extraordinary industrial adventure (read below). After Neovacs and Deinove, Carmat will be the third company under stock exchange within two months by Truffle Capital, as in the first two, which will participate in this operation (see below). An example to follow by Jean - Emmanuel Vernay, Associate Manager of Invest Securities. "Day where of French venture capital investors that the stock market is not there to retrieve files that they do not go out, will is a big step towards maturity of this industry." In other words, the IPO is more pure and simple output, but a relay for additional funding. "This is the challenge for the current period". "The France is not far from having a few champions who will finally take the sector and we can be optimistic in the medium term," he said.

If the market situation is in the process of consolidation, it must at all costs remedying the severe asthenia has private financing until the damage is irreversible for dozens of start-up companies in need of funds. Even if this is not the first time, cannot that deplore the Diatos liquidation, a company specializing in Oncology, that its investors finally dropped last year, after have saved it in 2007 following its failed IPO attempt, while they were still injected overall 55 million euros since its creation in 1999!

Take real risks

How get out of financial rut For the moment, the fellow thrill may not be enough to unlock the chain of French biotechnology industry funding. "I do not, at present, tangible reason to relaunch of investment machine private." "Apart from the classic difficulty to finance the boot now acute a problem arises at a more advanced stage, at the level of the third round table and beyond, which was not planned initially", said Philippe Guinot, Director of Credit Agricole Private Equity life science investments. "We are beginning to suffer from the desertification of the area by the capitalists to sit and syndications," he warned.

Fortunately, the strategic investment fund, 51 owned by the CDC and 49 by the State, began to take over, the last few months, by directly investing (NicOx, Innate Pharma) or via InnoBio. Launched last October, the public-private fund dedicated to biotechnologies has 140 million euros subscribed at 37 by the ISPs and major global pharmaceutical laboratories in France (Sanofi-Aventis, GSK, Roche, Novartis, Pfizer, Lilly...). The start-up Adocia and Genticel are the first beneficiaries. To sustainably revive financial mechanics, the only way is to finally take real risks in France.