The New Biotech Act Targets Europe’s Funding and Innovation Gap

Faced with Europe’s decline in the financing, clinical development, and industrialization of biotechnology, the European Commission has proposed the Biotech Act, which is now awaiting adoption by the European Parliament and the Council. This legislation aims to create a more favorable environment for companies in the sector, with the ambition of reducing the growing gap with the United States and China.

The assessment made by Brussels is unequivocal. According to the European Commission, the European Economic Area’s (EEA) share of global commercial clinical trials fell from 22% in 2013 to 12% in 2023, while China’s share rose from 5% to 18%. At the same time, the European Union attracts only 7% of global venture capital investments in health biotechnology. Between 2015 and June 2025, late-stage development funding reached approximately €25 billion in the EU, compared to nearly €219 billion in the United States. The new Biotech Act plans to change that difference.

This difficulty in accessing capital is pushing many European biotech companies to seek funding or an IPO outside of Europe.

To reverse this trend, the Commission plans to mobilize up to €10 billion through various European instruments to support biotech companies, particularly during their growth phases. The goal is to facilitate their development without forcing them to quickly turn to foreign investors. Brussels acknowledges, however, that public funding alone will not be sufficient and will need to be leveraged to attract more private capital.

The Biotech Act also provides for an acceleration of clinical trial procedures

Without requests for additional information, the timeframe could be reduced to 47 days, while the timeframe for substantial amendments would be reduced from 64 to 33 days. The Commission assures that this administrative simplification will not be accompanied by any relaxation of scientific or safety requirements, the objective being to make procedures more efficient without compromising European standards.

Beyond clinical development, Brussels intends to strengthen bioproduction capacity within the European Union. The Commission believes that startups often possess recognized scientific expertise but struggle to access industrial infrastructure that would allow them to produce on a larger scale. Developing manufacturing capacity is considered a key factor in retaining innovations stemming from European research and limiting their transfer to other parts of the world.

The Biotech Act project also includes a section dedicated to regulatory simplification

Companies currently face procedures involving multiple European and national authorities, depending on the aspects being assessed, whether it concerns the medicine itself, health data, or, in some cases, genetically modified organisms. The Commission aims to improve coordination between these stakeholders and develop regulatory testing mechanisms to reduce time to market thorugh the new Biotech Act.

The text of teh new Biotech Act still needs to be adopted, but it represents one of the main European initiatives in support of biotechnology in recent years. It remains to be seen whether the announced resources will be sufficient to close Europe’s funding and industrialization gap, especially as international competition continues to intensify.

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(Featured image by Antoine Schibler via Unsplash)

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First published in actulabo. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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