The bio-sector has roused itself again after three quiet years. In Europe it is now going through a transitional stage in which Finland is dependent on what happens in general on the European biotechnology markets.

In worldwide terms the bio-sector's turnover went up by 4 billion euros, i.e. 17 per cent, last year. Reports by Ernst & Young and Burrill & Company's Life Science show that the situation is best in the United States, where the market capitalization of bio-sector companies rose by around 60 per cent. The bio-industry in the Asia-Pacific region is developing rapidly with corporate turnover increasing by 9 per cent.

In Europe the sector is at a transitional stage, which can be seen in companies' operations. Although last year was the sector's second-best for funding, its combined turnover fell by 12 per cent to 11.27 billion euros. The funding accumulated by companies in 2003 (2.4 billion euros) showed a big increase over the previous year (123 million euros), but was still a long way off the figures for 2000 (6.6 billion euros).

"The sector has had to respond to challenging financing circumstances by cutting costs, reducing research and development and adapting business models. The ease with which the models can handled and the ability to adapt quickly to prevailing circumstances will, however, be decisive for the success of bio-companies at the development stage," says Riikka Heikinheimo, a technology manager at the National Technology Agency of Finland (Tekes).

Good news promised

European competition with US companies will intensify. "European bio-companies are creating interest as targets for acquisition. As far as research is concerned, American bio-companies look on Scandinavia as the most interesting area," Heikinheimo says.

Pharmaceuticals companies' interest in biotechnology has also increased. The interest is explained by the growing need for new areas of development in pharmaceuticals. According to Heikinhemo, bio-companies can expect good news of the cooperation agreements between them and pharmaceuticals companies. As individually tailored medical care proliferates, contacts among pharmaceuticals, diagnostics and biotechnology companies will intensify.

"Although there has been little positive news about products in Europe so far, good, interesting news can be expected. Listed European companies have at this moment more than 60 Stage III products."

Finland is, like other European countries, dependent on how the entire European biotechnology market develops. "Hardly any investment took place in Finland last year. The good news this year included BioTie Therapies' cooperation agreement with the pharmaceuticals giant Aventis and Ark Therapeutics' listing on the London Stock Exchange."

>> www.ey.com
>> www.burrilldatacenter.com
>> Biotechnology growing, but slowly (10.9.2004)