Little of France’s technology financing reaches biotech

Published 1:30 am Sunday, January 15, 2017

By Marie Mawad

Bloomberg

For a 28-year-old biotech entrepreneur, Frenchman Xavier Duportet has a standout resume: a PhD in biology and genome engineering from MIT, a lab at Paris’s Louis Pasteur Institute, and award-winning research with his name on it.

Still, in Paris, as in capitals across Europe, it’s much harder for him to raise money than for most of his tech peers.

To find the support they find is lacking back home, companies like Duportet’s Eligo Bioscience, as well as larger rivals that have already tapped the stock market such as OSE Immunotherapeutics and Celyad, have headed out to the J.P. Morgan Healthcare Conference starting Monday to meet U.S. financiers.

“France is a great place for innovation, with brilliant minds that cost half what they would in the U.S.,” said Duportet, who’s seeking 25 million euros ($26.2 million) to finance clinical testing of his startup’s treatment of drug-resistant bacteria on humans.

French fund Seventure Partners, which pitched in on Eligo’s 2.4-million-euro fundraising in 2015, will participate again in the next round, but “to raise money we need more investors who know pharma and can put in bigger amounts — we’re talking to investors in the U.S.”

France has a history of technology innovation and has spawned a strong talent pool with research tax breaks and subsidies.

But over the past five years, its push to reverse a shortage of venture capital investments has succeeded only in some startup segments, leaving others — like biotech — behind.

Investment in digital technology reached $1.4 billion in France during the first nine months of 2016, second in Europe only to the U.K.’s $1.8 billion, according to a report by CB Insights. And it was positioned to leapfrog the U.K. in the final quarter of 2016 at year’s end, investor Bpifrance said in December.

Meanwhile, venture capitalists invested just 250 million euros into health sciences startups in France in the first nine months of 2016 ­— of which only147 million euros was in biotech.

That’s short of the 485 million euros in estimated financing needed by the industry for the coming two years, according to a report by industry group France Biotech. And there have been few individual rounds of more than 15 million euros, the report showed.

— Bloomberg