Europe’s adversity to risk is why the US is ahead, say experts

Experts across the board have raised their concern about Europe lagging behind the US in the life sciences space. The worries range from dwindling clinical trial numbers, calls for new innovative payment models, patient access issues, and the volume of funding.  

“It is not Europe verses the US [because] even a start-up needs to think of the global market and should have a US investor on board as that will help later down the road,” Marten Steen, managing partner at venture capital (VC) firm HealthCap, told the audience in Stockholm, Sweden today. 

Meanwhile, Nick Williams, partner at European investment firm Medixci, said “culture is one of the driving reasons the US is getting more funding than Europe.”  

He stressed the difference in funding between the two geographical areas is not to do with the quality of work being carried out. “It is an absolute fact that the innovation and the quality of discovery and science in Europe is easily as good as the US, and if you track back many of these big drugs, quite depressingly, they are European.” 

Instead, he told delegates Europe struggles because “we do not have so many success stories of entrepreneurs, particularly operators in pharma who know someone who left their position in pharma and started a NewCo and retired.”  

According to Williams, this is something that happens “not infrequently” in the US because, unlike Europe, the US has “fostered a culture where that is seen as not a risky thing to do.”  

He continued: “In the US they do not see it as particularly risky because when the companies they leave to go and take part in do fail, they inevitably get another job at another biotech because there is excess capital looking to fund these things and people do not look for success, they look for experience.” 

The clear emphasis on “how much this is about culture” remained clear throughout Williams’ comments. He used company formation as an example and said, “anyone who does company formation, you do not go and decide to form a company in Germany.”  

Though he made it clear this might not be the case for German founders, he detailed how if you do form a company in Germany “all of a sudden by law you need to have five boards and you are doing a lot of reporting, [which] means it is not fit for where it needs to be.”  

We need to take risks 

The bleak reality is that Europe is lagging behind the US in terms of funding, and so to counter this Williams told the audience it should look to take more risks. 

As Europe is “losing the innovation race anyway,” he asked what the downside would be of taking more of a risk in order to gain the chance of becoming “self-sustainable” in innovation?  

“We have the smarts, we have the universities, we have the best scientists, why do we have to be ever reliant on other countries when we can do it ourselves?”