Europe’s life sciences investors step up as biotech financing gap widens

With industry leaders warning that time is running out for Europe’s biotech competitiveness, a new coalition has emerged to push for structural reform. The European Life Sciences Coalition (ELSC), created in association with Invest Europe, brings together venture capital firms, research institutes and advisers seeking to reshape how long-term capital flows into European life sciences.

The coalition’s membership reflects the financing chain of biotech. Participants include Forbion, HealthCap, Novo Holdings, Omega Funds and Sofinnova Partners, alongside legal advisers Cooley (UK) LLP and Covington & Burling LLP and the Flanders Institute for Biotechnology (VIB). Collectively, members manage more than €24bn in life sciences-specific assets and have backed over 1,400 companies.

“The idea is for the ELSC to start paving new roads,” Invest Europe told European Biotechnology Magazine. “The ELSC aims to change structural conditions that determine whether long-term capital enters life sciences and whether European companies can scale and list in Europe.”

The coalition aims to redirect both private and public capital into European life sciences by engaging institutional investors, improving capital market integration and supporting policymakers with evidence-based proposals to strengthen the sector’s long-term competitiveness.

Crucially, the group intends to engage directly with EU institutions as legislative files such as the Biotech Act move through the Council and European Parliament. Members plan to provide technical feedback on capital market barriers, regulatory bottlenecks and market fragmentation that affect investment decisions and company scaling.

“Within this coalition we can make concrete proposals and provide feedback on legislation,” Jérôme Van Biervliet, Managing Director of Flanders Institute for Biotechnology (VIB) told European Biotechnology Magazine.

For the ELSC, success should be measurable: shifts in institutional allocation behaviour, regulatory improvements that lower barriers to capital formation and scaling, larger fund sizes and ticket volumes, and ultimately a reversal in the trend of EU biotech companies choosing to list outside Europe.

From capital depth to competitive survival

Cedric Moreau, Partner at Sofinnova Partners and Chair of the coalition’s Oversight Committee, frames the challenge bluntly: Europe does not lack science, it lacks capital depth.

“At its core, this initiative is about attracting significantly more private and public capital into European life sciences and biotech,” he said. “This is not a nice-to-have. Without deeper pools of venture and institutional capital, Europe will struggle to translate its scientific excellence into globally competitive companies over the next decades.”

Among the proposals under discussion are the creation of a more efficient European fund-of-funds structure dedicated to biotech and deeper capital market integration, including what Moreau describes as “a single European capital market, with one dedicated stock exchange for listing high-growth companies, the EU equivalent of Nasdaq, to allow for European champions.”

The urgency is echoed by Van Biervliet, who has been directly involved in building biotech financing vehicles in Belgium.

Beyond joining the coalition, VIB has co-founded several life sciences funds in partnership with public investment actors such as PMV, seeking to crowd in private capital and sustain the local biotech pipeline.

“It is absolutely urgent,” he said. “We see in Europe that the capital that goes into our startups, our scale-ups and finally our companies is shrinking rapidly. That means more and more companies have to move to the United States to continue their development there. And with that, we lose precious potential for the future here in Europe.”

For Van Biervliet, financing cannot be separated from Europe’s fragmented healthcare markets.

“About 43 per cent of approved drugs are finally available on the European market,” he noted. “That surprises many people. But it has to do with the fact that our market is so fragmented.”

As a result, companies prioritise larger and more predictable markets.

“They will first go to America for marketing, then to Japan, then to Canada. We must create a better climate for companies to launch their products in Europe. Then our patients will also get access. Because now that is far too little the case.”

He points to argenx as both proof of Europe’s potential and illustration of its structural weaknesses.

“We want more companies like argenx,” he said. The Belgian biotech has grown into a €45 billion company and is now part of the Euro Stoxx 50, one of the rare European life sciences champions to reach global scale and profitability.

But even that success reflects Europe’s capital gap.

“Argenx also had to raise its money on the American stock exchange,” Van Biervliet said. “It did not come from Europe.”

And the consequences extend beyond financing.

“Their new product was launched earlier in the United States. European patients had to wait longer,” he added. “Our ambition must be greater,” he concluded. “We must organise ourselves in Europe to make that possible.”