Stratis Avrameas tries not to think about what might have been. A dual Greek-French national and a respected immunologist, Avrameas has been working for French scientific research centers since 1957, including some 30 years at France's famed Pasteur Institute. Along the way he pioneered works in the fields of natural antibodies and immuno-enzymes, inventing widely used techniques such as a series of immunology tests called elisa, which analyze biological fluids, and cold probes used to diagnose nucleic acids.
But neither he nor the institutions where he worked fully benefited commercially from his inventions. While studying enzymes from pigs' pancreases in the 1960s, he discovered that certain enzymes could completely digest proteins and got the idea that they could be used to remove spots on clothes. His request for a patent was greeted with disdain by his superiors at France's National Organization for Scientific Research (CNRS). Before long, putting enzymes in laundry detergent became all the rage in North America and Europe, with big U.S. consumer-goods companies reaping the financial rewards. "I was in shock," says Avrameas recently in his office at Paris' Cochin Hospital. "I had come up with this two years earlier."
Discouraged by the earlier refusal for a patent application, Avrameas didn't bother asking for one when he came up with the elisa test in 1965. Three years later, Organon, a Dutch research-based pharmaceutical company, applied for the patent and got it. To make matters worse, it threatened the Pasteur Institute with legal action if it commercialized the elisa test. A compromise was later reached, but neither the Pasteur Institute nor the Dutch company ever took the necessary steps to market the elisa test. Eventually other companies did, after buying licenses from Organon.
PHILIPPE GONTIER/EURELIOS for TIME
TEAM: Immunologist Avrameas, left, is finally in business, with Diotos CEO Tchelingerian
Still, Avrameas labored away in the laboratory, developing the cold-probe test. This time the Pasteur Institute did file for and obtain a patent. But the Institute's production division did not take advantage of its development rights, figuring the test was too far ahead of the market. Beckman Coulter, an American company that makes high-tech lab instruments, bought the rights and then turned around and sold licenses to companies in Britain, Germany and the U.S. These companies developed commercially successful products. "It was very frustrating," says Avrameas.
The European biotech landscape is littered with similar frustrations. "Europe has always had great science, but it was the rest of the world that took the science from our labs and actually did something with it," says Antoine Papiernik, a general partner at French venture-capital firm Sofinnova Partners.
But that is starting to change. The emergence of biotechnology — which uses a combination of life sciences, high technology and innovative research to drive progress and profits in health care — is prompting European institutions and governments to adopt a more businesslike approach to research. More than 50% of all new medications are being developed by biotech companies that did not exist 10 years ago. These firms are working on pioneering technologies that speed up drug discovery and shed light on the human genome, proteins, cell biology and aging. Investors believe the industry will not only improve health care with blockbuster products but also boost economies and employment. Five years ago there were only 400 biotech companies in Europe. Today there are more than 1,500, vs. 1,200 in the U.S, according to a report by the accounting firm Ernst & Young.
The big difference is that most U.S. biotech companies have the size and market capitalization to become global players. While the top 10 European firms have raised € 2 billion in initial public offerings in the year to March 31, 2001, their U.S. counterparts netted more than twice that amount, according to Ernst & Young. In fact, the report says, one U.S. biotech company, Amgen, has a bigger market cap than the 10 leading biotech firms in Europe combined.
The U.S. has been able to lead the industry since 1978 mainly because of its tightly intertwined network of academic researchers, entrepreneurs, venture capitalists, investment bankers and big pharmaceutical companies. While continental Europe has so far lacked those advantages, the environment is changing. "There has been a sort of revolution in Europe," says Philippe de Taxis du Poët, of the European Commission's Research & Innovation Unit. "Not only financial but also a cultural revolution — it is now possible for a researcher to consider becoming an entrepreneur."
Avrameas is a case in point. Now 72, he has launched a biotech company in Paris called Diatos [from the Greek for pierce] to commercialize his latest advances that deal with transporting medicines directly into living cells. He hopes this will help lead to new treatments for cancers and infectious diseases.
What
Governments Are Doing
FRANCE
•
Its Plan Biotech 2002
aims to mobilize more than €500 million of
private and public investment to catapult
France into a leadership position
GERMANY
•
Offers loans and financing
schemes to match private investment in start-ups
Ireland and the Netherlands Have tax incentives
to lure companies to locate their research
and development operations
PORTUGAL
•
Subsidizes students
in industry-related programs
SPAIN
•
Gives tax breaks for
biotech research and development expenses
U.K.
•
Offers tax breaks for
major expenditures on research and development
This time, he has the cooperation of the Pasteur Institute and venture capital from firms in France, Belgium and the U.S. With this backing, he was able to attract experienced management, luring Franco-American entrepreneur John Tchelingerian away from Neurotech, a company that specializes in the treatment of retinal disease and operates in both Europe and the U.S. Now Tchelingerian is helping Diatos to expand into the U.S.
Just three years ago it would have been illegal for Avrameas to benefit financially from his research at the Pasteur Institute. The French government has changed that law, and the Institute — like many other research labs across Europe — is doing a better job of leveraging its science, in part through a new incubator called BioTop, which is helping spin-offs like Diatos get off the ground. Fund-raising from venture capital companies has reached an unprecedented level, with € 25 million-plus financial packages to start-ups becoming more common. Venture capitalists themselves are branching out: Sofinnova's Papiernik is a member of Diatos' board as well as seven others in six European countries.
The challenge for venture capitalists is to pair good scientists like Avrameas with good businessmen like Tchelingerian. While the academics have always been in adequate supply, a new generation of European entrepreneurs is just emerging to run the biotech companies. A. Donny Strosberg, a Belgian immuno-chemist turned entrepreneur, is one example. Strosberg, who introduced Avrameas, a former colleague, to Tchelingerian, a former student, is the co-founder of four French biotech companies and played a role in the development of three others in the U.S.
These new biotech entrepreneurs are trying to narrow the development gap between Europe and the U.S. But as Philippe Pouletty, president of France Biotech, the national industry association, told Europe's research ministers in Gerona, Spain in February, "Europe should not just mimic the U.S. — France is not California, Munich is not Boston, Barcelona is not Denver. But British, German, French, Spanish, Italian, Belgian and other European scientists, clinicians and entrepreneurs are as good, sometimes better, than their U.S. colleagues. They do succeed when operating in the right environment."
Europe's Hottest Tech Companies: TIME picks those with the greatest future potential, not present hype. When Investors Go Dutch: The European Tech Tour hits the Netherlands, home to ambitious firms like Tridion Europe's Biotech Finds the Formula: Take increased investment, new laws and a changing culture, and you get a Continent able to compete with the U.S. Remote Control: Wi-Fi may promise a future of home wireless networks, but does it work?
