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13TH EDITION

Panorama 2015
of the Life
Sciences Industry
in France

CONTENTS

04 Highlights 2014-2015

05 Map of regions of the sample


06 Jacques Fayolle, Director of Telecom Saint-Etienne

07 France: the life sciences sector



08


09

10

11

12

13

14

15

16

Headcount of companies and qualification of employees,


origin of R&D and age of companies
Field of activity, creation and liquidation of companies
Analysis of French pharma R&D pipelines
Therapeutic products
Emerging sectors: Biocleantech and E-health
Medical devices and diagnostics
Partners and intellectual protection
Map of partnerships and subsidiary companies in Europe
Gilles Johanet, Attorney General at the Court of Auditors

17 Financing of innovation





18
19
20
21
22
23

10 best practices to raise funds according to KPMG


Funding life sciences
Venture capital financing, IPO and post-IPO
Development of European IPO in life sciences
Stock market experience of French companies and focus on the Nasdaq
Catherine Porta, Partner KPMG, biotech specialist

25 Appendices

26 Sample of companies
27 Reading committee

Acknowledgements

Nature of the study

Each year France Biotech conducts the Panorama of the Life Sciences industry in France, a study
conducted on the basis of a dedicated questionnaire and company publications. It is not designed
to be exhaustive and the information was collected until 30 October 2015 based on 223 companies.
The companies included in the study meet the following criteria:
operate in the life sciences sector in France.
invest at least 15% of their total costs in research and development.
have less than 250 employees.

france biotech | Panorama 2015

EDITORIAL

Adapt the tools to our realities


Pierre-Olivier Goineau, President of France Biotech

The dynamic observed over the past few years continues, with a sustained rate of creation (57 creations
in 2014). Whether it be upstream or advanced phases,
our companies do a better job and more than the
big four with research that implements diversified
disruptive technologies (68 projects in phase 2 and 3
versus 51 for pharma in France).

In our sector where funding


needs are very important,
it is essential to strengthen
the national structure for
financing.
This marvellous French potential is the fruit of excellent professional training. It is even more important
that this training opens up to entrepreneurship. Two
thirds of start-up entrepreneurs come from academic
research and have never had the occasion to tackle
business (60% of founders are new managers).
It must be possible to establish a more fruitful dialogue between training courses and businesses. It is
traditionally the case with engineering schools, however scientific and medical universities are not open
to us, hindering the exchanges of expertise that we
could have. It is also curbs creative know-how. More
importantly, the technologies that we implement,
from diagnostic, therapy, molecule, medical device up
to digital, increasingly merge. At government level,

the structures that assess us remain segmented and


do not allow for any global vision of what medicine
will look like in five years. It is indispensable to
have access to the databases of the Caisse Nationale
dAssurance Maladie (CNAM) and to have a vision
of what the French National Authority for Health
(HAS) and the Economic Committee for Medicinal
Products (CEPS) expect to evaluate and reimburse
our products. It is equally essential to have, from the
outset, structured dialogues with the National Agency
for the Safety of Medicines (ANSM) to enable us to
move our developments forward. There is still no
framework where all the actors could work together.
It is the case however in the United Kingdom, which
has managed to turn these regulations into a key
success factor whereas we make them constraints
and lose in attractiveness and legibility.
Our industry needs regulators and payers to send
signs to better prioritize their expectations and to be
able to diversify their research, still too focused on
cancer. Current tools must be adapted to our realities
and to our cycles by prolonging the staus of young
innovative enterprise (JEI) and by permitting greater
flexibility of threshold levels.
In our sector where funding needs are very high,
strengthening the national structure of financing is
indispensable. Whereas the challenge is to anchor
our firms in France so that they can become mid-tier
companies and generate French champions, venture
capital in France is not in a position to absorb the
wave of companies initiated in previous years. It is
necessary to urgently reconstitute a better endowed
financing fabric by earmarking life insurance towards
FCPI/FCPR and by facilitating the return of banks
and insurance in the financing of investments. The
government is doing a great deal for our sector,
today it involves mobilizing private savings that are
currently lacking.

france biotech | Panorama 2015

HIGHLIGHTS

Infographics of the 20142015 sample

223
companies studied

10

30%

of companies are
over 10 years old

348

57
companies created in 2014

43

4992

employees (22 employees


on average)

89

therapeutic products
marketed

therapeutic products in
development

diagnostic devices in
development

medical devices in
development

67

373M

426M

379M

turnover

invested in R&D

net loss

listed companies as of 30
September 2015

france biotech | Panorama 2015

HIGHLIGHTS

Map of regions of the sample

North-Calais

Picardy

UpperNormandy
LowerNormandy

ParisIsle-of-France

71

Brittany

Lorraine

ChampagneArdenne

Alsace

9
Pays-de-la-Loire

Center

1
PoitouCharentes

> 40

Burgundy

Franchecomte

Limousin

Auvergne

2140

Rhone-Alpes

34

1020

Aquitaine
19

4
MidiPyrenees

Provence-AlpesAzur

18

14
LanguedocRoussillon

17

As in previous years, the Paris-Isle-of-France region


concentrates over 34% of companies included in
the study of which 24 are listed. The group of regions
formed by Rhone-Alpes, Languedoc-Roussillon,

Midi-Pyrenees, Provence-Alpes-Azur represents nearly


40% of companies in the sample of which 18 are
listed. Finally, the following regions appear: Alsace,
Brittany, Pays de la Loire, North-Calais and Aquitaine.

france biotech | Panorama 2015

Engineering and innovation


in health
Jacques Fayolle, Director of Telecom Saint-Etienne
be carried out to extract value-added information and
to produce recommendations. This approach associating engineering and digital contributions to health
constitutes a differentiating factor compared to the
situation that existed ten years ago.

Next to classic engineering schools centered on the


technologies of biology and chemistry, issues related
to the augmented human, to artificial intelligence
and to biostatistics are leading to the emergence of
a new sector that calls on digital technologies. This
sector is exploding both at the level of research and
scientific productions as well as at the level of small

Biotechnologies are a
high-growth sector.
and medium-sized companies, start-ups and young
innovative companies, with two major axes that are
namely the questions of an ageing population and
home care assistance and the detection of weak
signals for the prevention of epidemics. These concern, in particular, robotic solutions aimed at accompanying people in their old age. These are orthotics
and smart prostheses, the image of knee replacements
that facilitate movement and take over from muscles
or articulated hands that, tomorrow, will be able
to be produced for under a thousand euros thanks
to 3D printing.
These developments require concepts on the uptake
of closest data, from connected bracelets and watches
to more intrusive devices on humans. Engineering
intervenes also in the capability to manage very large
data repositories from which statistical analysis must

france biotech | Panorama 2015

Engineering work is based on the understanding of


partner constraints and today, the design of an
innovative product or service depends on an even
earlier integration of the needs and expectations
of the end user. All of these developments suggest
that engineering schools demonstrate openness to
and understanding of the problems of the world of
health to numerical engineers. They must also be able
to accompany biologists in the digital world. All of
these issues, whether it be processing health data or
augmented humans, come back to the question of
ethics. What are the limits between the collection and
the analysis of health data for the care of a person at
home and Big Brother? Until what stage can an individual who has received an artificial heart, an articulated hand, who sees thanks to micro-cameras still
be considered as a human? At what moment does the
individual become a robot with the underlying questions of the death or life sustaining of a human
based structure ? These developments figure, in my
opinion, among the major developments of our century. Our engineering schools must equip themselves
today to generate the skills of society tomorrow. Here
is a direction that we must boldly take.

RUBRIQUE

1
France: the life sciences sector
The French fabric of life sciences companies in health is dynamic, supported by strong international ambitions. Despite a context of ongoing global crisis, France remains a land of innovation.
2014 will have seen the medtech sector support the health sector whereas 2015 will have been
the year of biotechnology companies.
Conclusive clinical results, mega deal signatures with big pharma demonstrate the power of
French research. Representative of the French ecosystem in health, the 2015 panorama
stresses the frugal development in France and internationally of a forward-looking sector and
driver for growth for the coming decades.
france biotech | Panorama 2015

PART 1

Headcount of companies

Qualification of employees

2%

12%

16%

27%

27%

60%
22%
1 to 10

Baccalaureate

11 to 30

Bachelor degree

34%

31 to 99

Master degree

100 and more


Source: France Biotech, 223 companies, October 2015

PhD
Source: France Biotech, 223 companies, October 2015

Almost 60% of companies have a headcount of between 1 and 10 employees, indicative of the development model of companies in the sector. The bracket
11-30 represents 16% of companies in the panorama.
Amongst our sample, the headcount of 47 companies
is higher than 31 employees, highlighting the level

of maturity reached. Finally, 2% of companies (7)


exceed 100 employees. Regarding the qualification of
employees, we always find a high-level population as
nearly 60% hold a university degree at the level of a
Masters or Doctorate. All the companies employ 4992
people with an average of 22 employees per company.

Age of companies

Origin of R&D
6%
15%

30%
39%
56%

23%

31%
Source: France Biotech, 223 companies, October 2015

Profile of managers
64% of founders are scientists
60% of founders are new managers
20% are founders, scientists and former managers
Need to train managers

france biotech | Panorama 2015

Academic research

0 to 5 years

Creation ex nihilo

6 to 10 years

SME

10 years and +

Source: France Biotech, 223 companies, October 2015

Industrial group

France enjoys a high-quality university network. 56% of companies were created from research started in the public domain.
The other driver for innovative companies is the creation exnihilo (23%) by an entrepreneur. Spin-offs of SME represent 15%
of creations via repurchasing of assets. Conversely, spin-offs of
large pharmaceutical groups represent only 6% of creations.
The consolidation of employees reflects the structuring in
progress. The 0-5 years bracket represents 14% of personnel for
8 employees per company whereas the 11 years and + bracket
represents 60% of personnel with 45 employees.

FRANCE: THE LIFE SCIENCES SECTOR

Field of activity

Human therapeutics

80%

38%

Medical devices and diagnostics

28%

Veterinary therapeutics

25%

Cosmetics

23%

Materials and reagents

14%

Human food and veterinary feed

11%

Bioinformatics

10%

Environment & Bioenergy

20%

40%

60%

80%

100%

Source: France Biotech, 223 companies. Multiple response questions, October 2015

Human therapeutics (80%) remains the first field of


activity, followed by medical devices and diagnostics
(38%) and veterinary therapeutics (28%). Medical
devices and diagnostics progress in the hierarchy year
on year and is explained by a better participation in

the study. Cosmetics as well as materials and research


reagents follow with 25% and 23%, respectively. Finally, human food and veterinary feed, bioinformatics
and biocleantech close the market with 14%, 11% and
10%, respectively.

Creation and liquidation of companies


Year

2010

2011

2012

2013

2014

Creations

65

78

53

57

57

Liquidations

10

10

26

19

16

Net

55

68

27

38

41

Sources: France Biotech, socit.com

After having observed a peak in liquidation in 2012 in


response to the world economic downturn, we witness a decrease in the number of liquidations. On the
increase for three years, the dynamic of net creation
has not however reached the levels of 2010. In 2014,

we observe a stabilization in the number of business


start-ups (57) as well as a decline in the number of
liquidations (16 liquidated companies, down 16%
compared with 2013).

france biotech | Panorama 2015

10

PART 1

Comparison of French Big Pharma with French biotechs


# in research

# Phase 1

# Phase 2

# Phase 3

234

36

45

23

Ipsen

10

6 (phase 1-2a)

6 (phase 2b-3)

3 in registration phase

Sanofi

nc

19

9 + 4 in registration phase

nc

36

17

Panorama Biotech n=108

Pierre Fabre
Servier

Sources: laboratory sites, BioCentury, BioPharmAnalyses, October 2015

With 104 products in clinical phase out of a total of


338 projects, French biotech today displays a larger
development portfolio than the four main actors of
the pharmaceutical industry in France (Ipsen, Pierre
Fabre Mdicament, Sanofi and Servier). This growth
can be observed particularly at advanced stages of
development with 68 projects in phase 2 and 3 versus
51 for pharma in France. With 234 projects in R&D
phase, the biotech sector confirms its dynamism and
also demonstrates that it possesses an important
reservoir of innovation.
Whether it be molecules in advanced phase or in early
development, the study of the French pharma portfolio confirms the increasing place of products originating from biotech (monoclonal antibodies, conjugated
antibodies, interfering RNA, messenger RNA, peptides,
antisense oligonucleotides, kinase inhibitors, gene
therapy products).

These products emanate from the integration of


biotech companies by pharma, just like Genzyme
bought out by Sanofi in 2011 or, more often by agreements with biopharmaceutical companies from North
America or Europe. For five years, Ipsen, Pierre Fabre
Mdicament, Sanofi and Servier have concluded over
70 R&D or licensing agreements with biotechs, in the
majority North American or European. At the European level, the countries most represented among
these alliances with French pharma are, on equal terms,
France and Germany, ahead of Belgium, the Netherlands, Switzerland, Austria, the United Kingdom and
Sweden. In terms of the therapeutic areas concerned,
cancers, infectious diseases, cardiovascular diseases,
neurodegenerative diseases, rare diseases and diabetes
are top priority. French biotechs are still too removed
from big pharmaceutical companies; these have not
yet seen the potential of R&D programmes.

Origin of biopharmaceutical companies in R&D partnership with French pharma since 2010
Europe
North America

France

Germany

United Kingdom

Others

Asia

Total

Ipsen

Pierre Fabre

Sanofi

20

42

Servier

17

32

12

11

73

Total

Sources: laboratory sites, BioCentury, October 2015

france biotech | Panorama 2015

FRANCE: THE LIFE SCIENCES SECTOR

11

Therapeutic products
Therapeutic areas
Oncology

33%

Infectious diseases

Central nervous system

17%
10%

Metabolism (diabetes, obesity)

7%

Ophthalmology and sense organs

5%

Genetic diseases

3%

Cardiovascular system

3%

Digestive system

1%

Dermatology

1%

Other fields

8%

5%

10%

15%

20%

25%

30%

35%

Source: France Biotech, companies, October 2015

One third of R&D programmes is focused on cancer


with 114 products in development. This is followed by
infectious diseases (17%), 59 products in development
and the central nervous system (10%), 36 products
in development. However, development opportunities

exist in other therapeutic areas some of which


are priority for French Big Pharmas. This observation
brings to light the absence of an industrial
reflection by startups in order to follow in the steps
of industrialists.

Stage of development
160

2010
2011

140

2012
2013

120
100

2014
NC 126 138 152 142

80
60
63 59 57 66 74
40

40 29 34 26 33

27 35 34 31 42

8 21

12 12 11 12 10

0
Proof of concept

Preclinical

Phase 1

Phase 2

Phase 3

Registration

MA

Source: France Biotech, 108 companies, standardized data based on 100 out of 108 companies, October 2015

With a rich pipeline of 348 products ranging from


proof of concept to commercialization, the R&D
pipeline of companies reflects the scientific productivity in France. 67% of development programmes are
focused on early phase (proof of concept and preclinical), therefore the future is promising. Furthermore,
we observe a sharp increase in products in phase 2

and phase 3 accounted for by taking into account


AB Science which alone conducted 9 programmes in
phase 2 and 13 in phase 3, in different indications in
oncology and central nervous system, around its lead
product masitinib. However, too few companies go
as far as commercialization, only mid-tier companies
manage to do so.

france biotech | Panorama 2015

12

PART 1

Emerging sectors: Biocleantech and E-health


Biocleantech Field of application

Stage of development

25%

100%

50%

13%

 ecycling and recovery


R
of waste
Nutrition
Water treatment

Research and
development

Biofuel

12%
Source: France Biotech, 5 companies, October 2015

Source: France Biotech, 5 companies, October 2015

Sector of the future, the cleantech/biocleantech


industry in France is under the spotlight in this year of
COP21. Offering alternative solutions to global issues
(pollution, nutrition, mobility), this sector can see its
actors slowly gain maturity and visibility. Indeed, these
companies structure themselves via the signature of
R&D partnerships, the formation of joint ventures

(example: Cristal Union and Global Bioenergies) with a


view to speeding up the development and industrialization of these technologies. Once the pilot phases
of transformation have been successfully passed, the
sector will see national champions emerge that could
have a knock-on effect for the other actors.

E-health Field of application


0%

Stage of development

10%
15%
10%

31%

Tools for R&D

50%

Other

20%

Digital diagnostic/
Computer-aided
diagnosis
Telemedicine
Connected objects

10%
Source: France Biotech, 10 companies, October 2015

At a time when the digital transformation of companies brings about large-scale changes at a fast pace,
the health sector takes advantage not only of these
technological developments but also of practices in a
context that seeks to promote cost controls of public
health care. Mobile applications, connected objects, big
data are equally new tools likely to improve our health

france biotech | Panorama 2015

T elemonitoring of
patients

Research

54%

Development
Commercialization

Source: France Biotech, 10 companies, October 2015

care system thereby making it sustainable for decades


to come. With a world market estimated at 2,4 billion
in 2012 and an annual progression between 4 and 7%
according to the 2015 report of the National Council of
Digital technology, e-health is an excellent opportunity
of growth for France and for Europe.

FRANCE: THE LIFE SCIENCES SECTOR

13

Medical devices and diagnostics


Classification

Stage of development
4%

80

6%
9%

70
60

33%

50

18%

40

Class 1
Class 2a
Class 2b

30%

74

30

Class III

20

In vitro diagnostic
medical device

10

Active implantable
medical device

44
Research
Development

17

Commercialization

Source: France Biotech, 56 companies, October 2015

Source: France Biotech, 56 companies, October 2015

The distribution of the classification of medical devices


(MD) brings to light two categories that concentrate
more than 60% of developments in MD; class III MD
(30%) and in vitro diagnostic MD (33%). Medicine of
the future pushing towards personalized medicine,
the use of in vitro diagnostic MD is bound to become
generalized in the years to come. Monitoring of biotherapies, predictive genetic screening, are the many
fields that attract the attention of private actors and
also the government in a logic of controlling health
care expenditure.

56 companies reported being involved in MD. The


distribution of programmes per branch places orthopaedic surgery in first position. This is followed by the
trio of infectious diseases (10%), cardiology/vascular
(7%) and gastrology/enterology/hepatology (7%).
With already 44 products on the market, the sphere of
medical technology companies demonstrates its level
of maturity. Finally, with as many as 91 programmes
in R&D phase, the medical technologies sector is a
real driver of innovation.

Therapeutic areas
15
12

15%

10%
7%
5%

4%

4%

3%

3%

2%

2%

2%

1%

1%
Stomatology/Dentistry

6%

Corrective surgery

6%

Dressings/compresses

7%

Genetic diseases

7%

Neurology

7%

Ophthalmology

7%
3

Reanimation/Perfusion

Other fields

Urogenital/Nephrology

General surgery

Imaging

Pneumology/Respiratory

Radiotherapy

Oncology

Immune system

Gastrology/Enterology/Hepatology

Cardiology/Vascular

Infectious diseases

Orthopaedic surgery

Source: France Biotech, 56 companies, October 2015

france biotech | Panorama 2015

14

PART1

Geographic distribution of partners

Distribution by type of partner


6%

7%
10%
19%

46%

15%

68%

France

Academic research

Europe
North America

Industrialists

29%

Rest of World

Biotech
Others

Source: France Biotech, 129 companies, October 2015

Source: France Biotech, 129 companies, October 2015

The lack of resources impairs the development of structural international partnerships. However, with promising clinical results, supported by a remarkable stock market performance, certain biotechs
create enthusiasm among both Big Pharma and the international
financial community. In this way, the first partnership over 500 M$,
of which 50 M$ upfront between a US big pharma and Adocia, came
about at the end of 2014. Earlier in the year, it was immunotherapy
that was under the spotlight with the signature of a double deal of
capital importance for Cellectis, specialist of CAR-T cells, with the
laboratory Servier and the American Pfizer. The first deal foresees an
initial payment of 7,5 M and up to 105 M for each of the six drug
candidates potentially developed. For the second agreement, concluded some months later, Cellectis will receive an upfront payment
of 80 M$ that could go up to 185 M$ per product. Concurrently,
Pfizer took a 10% stake in the capital of Cellectis. Genticel, a company

specializing in the treatment of papillomavirus, signed a licence


agreement around its technological platform Vaxiclase with
the Serum Institute of India for a maximum amount of 57 M$.
IDD Biotech, specialist in the production of monoclonal antibodies, formed an alliance with Genmab for a maximum amount
of 101 M. The partnership signed with Astra Zeneca, definitively
brought Innate Pharma into play in the major league. Savvy in such
international agreements, the Marseilles biotech signed a codevelopment agreement with Bristol-Myers-Squibb in 2011, for its
lead programme the antibody Irilumab, that could reach 430 M
with an upfront payment of 35 M$. The co-development agreement
concluded with the British giant in April 2015 is for another earlier
stage programme. This mega-deal, valued at 1 275 billion $, includes
an upfront payment of 250 M$, providing sufficient latitude to
Innate Pharma to pursue its international development.

Intellectual protection is a key element in the strategy of value


creation of innovation companies. Consequently, it is essential for
these companies to have a high level of protection of their research
work. Close to 178 companies (80%) protected their discoveries via
the registration of national and international patents. Just under
half of the patents delivered (47%) were outside the European area.
The profile of companies taking out patents is that of a 9-year-old
structured company with a headcount of 26 employees.

Patents delivered

30%

57%

13%

France/Europe
USA
Rest of World

Source: France Biotech, 178 companies, October 2015

france biotech | Panorama 2015

FRANCE: THE LIFE SCIENCES SECTOR

15

Map of partnerships and


subsidiary companies in Europe
International subsidiaries (75)
International partnerships (99)

FINLAND

SWEDEN

DENMARK
UNITED KINGDOM

10

3
8

GERMANY
BELGIUM

LUXEMBOURG

1
1

AUSTRIA
SWITZERLAND

ITALY

1
SPAIN

3
NETHERLANDS

PORTUGAL

NORTH/SOUTH AMERICA

42 36

MIDDLE EAST

ASIA/OCEANIA

9 15

france biotech | Panorama 2015

16

Evaluation of the medicinal


product should be objectified
Gilles Johanet, Attorney General at the Court of Auditors and former president of the
Economic Committee for Medicinal Products (CEPS), former director of the CNAM
sessment that is the most neutral and most objective
possible and the second making it possible to determine the real situation faced with an existing risk.

The risk-benefit analysis established itself in order to


evaluate the innovation that a new treatment brings
to a patient. Purely scientific, the benefit analysis
should nonetheless progress more easily than the
risk analysis, closely linked to fears of our developed
companies where risk aversion is ever increasing.
Faced with a new anti-cancer drug that increases life
expectancy by three months and causes fever and

Our governments however


do not seem to be ready,
even if this increase
is accompanied with real
therapeutic advances.
pain, only these risks of side-effects and the duration
of this prolongation seem to be taken into account.
Yet, it must not be forgotten that these three months
are a coach in the train of progress that, today, is no
longer approached as a continuous chain. Here we are
witnessing a separation between an increasingly scientific benefit analysis and an increasingly imaginary
risk analysis. How can the two be reconciled? The only
tools we have today are the international evaluations
and the post-MA studies, the first authorize a risk as-

france biotech | Panorama 2015

With this in mind, I had integrated the setting up of


a monitoring committee of studies in real life in the
framework agreement governing the conventional
policy between the State and the pharmaceutical
industry. This committee convenes the Economic
Committee for Medicinal Products (CEPS) and the
French Health Authority to examine the issues raised
by conducting post-MA studies, in order to facilitate
producing tangible and workable results. Afterwards
the question can be asked, which is not incidental,
whether the National Health Insurance CrossSchemes Information System (Sniiram) data bases
should be made accessible to accomplish this work.
Finally, it is necessary to remember a very important
element in the context. Four or five years ago, it was
asked whether the period of blockbusters and great
therapeutic progress was over. However, it was just
a vacuum and we are once again in an era of major
discovery. The question of the acceptance by the
public authorities of the increase in drug costs for
health insurance is going to be violently and brutally
raised. Our governments however do not seem to be
ready, even if this increase is accompanied with real
therapeutic advances. If this question is asked for
the drug, it is because it presents an extraordinary
property which is both an advantage and a drawback: it is the only health product whose evaluation
is global and it can be decided whether it is useful
or not. The future is therefore in the objectivation of
the evaluation of the medicinal product. To achieve
this, I would willingly support the extension of the
Swedish experience with its list of control medicines.
Ultimately, the patients but also the pharmaceutical
industry would win.

RUBRIQUE

17

2
Financing of innovation
This year the world pharmaceutical market surpassed the symbolic mark of 1000 billion $ (924
billion ) representing growth of 8,8% (source: IMS Health). This level of growth reflects very
different realities at world level. On the one hand, emerging countries are the main drivers of this
strong growth with rates currently fluctuating between 10% and 11% which will be maintained
between 4 and 5% by 2018. On the other hand, the political context of cuts in public spending
puts strain on the health sector. Until now rarely called into question, the prices of drugs could
soon come under downward pressure. It is therefore innovation that will be the main driver
of growth enabling highly priced innovative therapeutic solutions to be placed on the market.
Thus, IMS Health expects high levels of growth in the USA and in the UK, around 6,4% and
5,1%. The French market should stabilize at -0,3% until 2018 after several years of most marked
decline. In this context, the financing of biotech/medtech/biocleantech companies in France
remains dynamic and has known a steady increase since the low point of 2011 without reaching
the pre-crisis levels.
france biotech | Panorama 2015

18

PART 2

The 10 best practices to raise funds according to KPMG


The company must have a strategic thinking and have considered its positioning in the
future (even if the latter is likely to evolve marginally) in order to be in a position to
present its equity story. This story will be much more credible if it is accompanied by
quantified information, even a complete business plan;
Once its equity story has been defined, a company must know how to tell its story and
prepare to do so. As far as scientifc technology is concerned, the ability to adapt to the
interlocutor to present the technical aspects with a certain degree of precision and in an
understandable way remains key;
It is important to approach and to be in contact with investors early enough, upstream
active phases of fund raising, and to spend time sharing successes with them;
The visibility of the company soon becomes an important issue (publications, congresses,
investor meetings, etc.) to be attractive, but entailing significant cost;
In the context of fund raising, the two parties place themselves in a win-win position;
showing its potential and its ability to integrate funds into its capital and to benefit
from its experience remain important to initiate good contacts;
For the good development of the company, the manager and its shareholders must be
able to ensure a balanced governance between scientists and functional roles (finance/
HR/compliance). This balance is subject to develop according to the maturity of the
company;
Being attentive to internal control procedures must remain a priority for the management team: adopt an approach of progress on the specific focus points such as reporting procedures, accounting, compliance, human resources, etc.;
Be in a position to ensure the intellectual protection of its discoveries over time and the
discoveries of R&D teams;
A manager who has decided to engage in a fund raising campaign must always plan,
secure to be in a position to appreciate where the raised funds will take the company
and think of the following turn by anticipating its future requirements;
Finally, investors always ask themselves about the ability of the management team to
roll out the project. The managers ability to have a competent team and to ensure
complementary skills is key to success.

france biotech | Panorama 2015

FINANCING OF INNOVATION

19

Evolution of financing of the life sciences industry in France


Amount in M
1400

1200

478

1000

800

405
54

600

49

400

74

200

44

92
121

80

146

51

153

351

547
46

146
138

252

Post-IPO

144

193

IPO
Venture capital
Number of operations

2011

2012

2013

2014

Q3 2015

Sources: France Biotech, KPMG

The life sciences industry appears to be increasingly


influenced by the health of financial markets for
the success of its development. Following a phase of
a fall in investment in the life sciences sector during
the times of financial crisis in which risk aversion
amplified, the trend reversed as from 2011. Indeed,
we observe sustainable growth to all the means of
financing French innovation in the sector of health.
Each financing vehicle saw its volume increase steadily
from 2011 to 2015. Venture capital fund raising, actor
initiating the financing chain, more than doubled
between 2011 and 2013 going from 121 M to 252
M. In comparison to 2013, the level of investments
in 2014 collapsed to 144 M (-43% vs. 2013). When
venture capital reaches its limits in terms of support,
the most commonly envisaged solution is flotation on
the stock market. We observe a strong increase in
financing via the market either by flotation on the
stock market at 351 M (+129% vs. 2013) or through
different modes of capital increase of listed companies. The latter, indicators of the level of maturity

reached by the French sector, significantly increased


with 405 M raised in 2014 (+177% vs. 2013)
confirming the good progress of certain biotechs that
achieved fund raising over 50 M such as Transgne
and Innate or Genfit and Onxeo. The attraction of
American investors increasingly present in this fund
raising was equally confirmed. A number of French
biotechs and medtechs became more credible and
sufficiently mature to be studied closely by specialized
American investment funds. Meeting a number of
criteria such as the level of market capitalization,
robust data in clinical development or the signature
of structural partnerships are all assets that make
the French market draw attention. The most
developed companies, such as DBV Technologies,
Celyad or Cellectis, all crossed the threshold of the
Euronext/Nasdaq dual listing with a triple objective
in their line of vision: stabilize their financing and
market capitalization, gain in terms of international
visibility and establish themselves on the worlds
largest market.

france biotech | Panorama 2015

20

PART 2

Distribution of venture capital investments


Amount in M
300
250

47
41

38

13

40

200

130
150

6
100

48

80

109

123

141

0
2011

2012

2013

2014

Biocleantech
Diagnostics

52

67

50

1
20

33
3
49

Medtech

Evolution of French IPO in life sciences


Amount in M

Biotech

600

Number of
operations

500

Q3 2015

11

400

Sources: France Biotech, KPMG


300

Over the period from 2011 to Q3 2015, a steady


progression is observed of levels raised with venture
capital funds, with 2013 as an exception. This progression is steadier for all sources of financing for biotech
companies. The average prices on the operations
carried out in 2014 and 2015 are between 6 and 7 M,
the number of funds raised over 15 M remaining
very low: 3 in 2014 (Voluntis, Lysogne and Poxel) and
5 in the first nine months of 2015 (Echosens, AAA,
GenSight, Biomup and Therachon). In all of these
significant-sized fund raising efforts, the presence
of one or several international investors around the
table can be observed. The majority of these foreign
venture capital funds are American, which concretize
their appetite for French companies by investing from
now on in very early stage financing rounds, even if
these funds concern lower amounts compared with
operations on the other side of the Atlantic. According
to the information in this study, we have been able
to estimate a need in capital amounting to 490 M
for the next 24 months for the companies of the
panorama.

france biotech | Panorama 2015

6
13

100

7
86

68

2011

2012

65

122

156

40
23
115

200

13
13

Biocleantech
Diagnostic

377

Biotech

172

Number of
operations

18
2013

2014

Medtech

Q3 2015

Sources: France Biotech, KPMG

The Paris market continues to consolidate its dominance on the European stock exchange. 2013 will have
seen the medtech sector (5 out of the 7 new ratings)
support this life sciences stock market frenzy started
in 2010. This trend persisted in 2014 as 5 of the 11 new
ratings are medtech companies with 115 M funding
raised. With regard to the biotech sector, 4 are listed
on Euronext Paris for a total amount of 172 M
(+856% vs. 2013). Finally, Fermentalg, leader in the
production of molecules of interest avoiding petrochemical production channels, completed the largest
fundraising drive for a biocleantech with over 40 M.
If the stock market window closed in Europe in the
second six-month period 2014, some companies like
DBV Technologies chose to be listed on the American
technological market, the Nasdaq. The French biotech,

FINANCING OF INNOVATION

21

Evolution of European IPO in life sciences


Amount in M
500
400

specialist of immunotherapy in the field of allergies,


managed to secure over 104 M during its IPO,
strengthening its cash position for the upcoming
deadlines whilst at the same time gaining a foothold
in the American continent. By contrast, the first nine
months of 2015 will have seen the return to the
fore of biotechnology companies. They still occupy
a prominent place in the heart of investors. The 8
companies listed on the stock market at Q3 2015 are
biotechs raising 377 M (+119% vs. 2014). The record
amounts of IPO continue to increase, proof of the
ever growing interest in this sector of innovation.
In this way, Medtech Surgical raised 20 M in 2013,
SuperSonic Imagine 50 M in 2014 and recently
Amplitude Surgical with106 M. These amounts are
growing yet are still well behind the funds raised by
their Anglo-Saxon counterparts in an environment
of ample liquidity. Thus, Avoxant, US biotech specialized in the treatment of Alzeimers disease, launched
itself on the Nasdaq last June raising 315 M$. This
operation was controversial at the time in financial
circles due to the very early stage of development of
its leading product. Centered on a compound acquired
from GSK for 5 M$, the keen interest around this
biotech is intriguing knowing that there are no
clinical data so far and not one patient included in
a clinical trial. On the other side of the channel,
Circassia Pharmaceuticals, specialist of allergies,
raised over 275 M during its IPO in 2014. One year
later, in order to finance its external growth, Circassia
Pharmaceuticals successfully launched a capital increase of over 380 M. These two examples illustrate
the disparity between these two worlds that might
explain in part the valuation difference between US
and European companies.

23
40

300
200
100

92
0

2011

(6)

145

(8)

35

(2)

153

(7)

247

137

(2)

353

(12)

(1)
(1)

(10)

Netherlands
Belgium
France

2012

2013

2014

Q3 2015

Sources: France Biotech, Euronext

Since the crisis, France has established itself as an


important financial centre in the euro zone. After
a period of relative calm, where only the French
market supported biotech IPO, the tendency to use
financial markets was confirmed in 2014 for French
life sciences companies. With 10 new IPO on the
Paris stock market, France leads the way in the life
sciences sector. After 3 years absence of activity on
the Belgian and Dutch stock markets, 2013 witnessed
a renewed interest in life sciences. Indeed, Cardio3
BioSciences, now known as Celyad, managed to raise
23 M on the Belgian and French markets. In 2014,
the upward trend was confirmed with the IPO of
the Belgian and French companies arGEN-X (40 M)
and Probiodrug (23 M) respectively. During the
first three quarters of 2015, the French stock market
continued to attract French innovative companies
with 12 new IPO. Euronext in Belgium saw two great
inital public offerings with Bone Therapeutics, leader
company in bone cellular therapies (37 M) and
Biocartis, specialized in diagnostics (100 M).

france biotech | Panorama 2015

22

PART 2

Stock market experience of French life sciences companies 2014-2015 YTD*


280
240
220
200
180
160
140
120

France Biotech
Nasdaq Biotech Index (NBI)

100
11.02.15

10.02.15

09.02.15

08.02.15

07.02.15

06.02.15

05.02.15

04.02.15

03.02.15

02.02.15

01.02.15

11.02.14

12.02.14

10.02.14

09.02.14

07.02.14

08.02.14

06.02.14

05.02.14

04.02.14

03.02.14

Next Biotech
02.02.14

80

Sources: France Biotech, KPMG


* as of 23/11/2015, Index rebased at 100 as of 01/01/2014; the France Biotech index indicates the performance of different
members of the index weighted by size of market capitalization.

The France Biotech index, regrouping the 64 French


listed SME/mid-tier companies in the fields of biotech,
medtech and biocleantech, outperforms the European
indexes (Next Biotech) and American (Nasdaq Biotech)
over the considered period. This relative performance
highlights the success of some French companies
thanks to the validation of the science, the continuity
of projects and teams and the obtainment of positive
clinical results The upturn in performance of this
index is notably achieved by the companies whose
market capitalization exceed 200 M having experienced considerable jumps in value such as:

- Adocia and Cellectis whose prices increased more


than tenfold,
- DBV Technologies, Genfit, Innate Pharma,
Nanobiotix, Erytech Pharma whose performances
vary widely from about x5 to x2.
It should be noted that the evolution of French and
European indexes are close as a result of the dominance of the French financial market in relation to
other European geographies (more than 75% of Next
Biotech members are French). The American index
collects 143 companies and presents a curve evened
out over the period.

Focus on the NASDAQ


Preparation:
An American story to tell (project of development in
the United States)
If existing listing in France, more vigilance on the
communication with potential investors (respect
equality of shareholders)
Seek specialist advice (lawyers, auditors, press relations) capable of bringing best practices
Do not underestimate these costs (between 5x and
10x in relation to a listing in France) and the effort
namely in production of documentation
Anticipate potential issues with SEC (without neglecting relations with AMF for companies already
listed in France)
Do not focus only on the main think about
the secondary in the next steps of its life as a
company listed on the Nasdaq (Insurances, 144A
certification to complete at IPO, etc.).
france biotech | Panorama 2015

Post-listing:
Management of fundraising in dollars when expenditure in euros
Strengthen structure in order to meet regulatory
expectations or result of volontary process to follow
US market
Accounting options: even if not mandatory, the
question must be asked with regard to American
comparables to publish accounts quarterly
SOX: exemption can fall sooner than 5 years
need to prepare upstream notably with regard to
non-compatible IS
Total additional cost > 2 M per year
Maintain visibility (road show, etc.)

FINANCING OF INNOVATION

23

A good molecule does not make


a good manager
Catherine Porta, Partner KPMG, biotech specialist
their independence and are not convinced by the
sharing of risks and the advantages proposed by the
pharmaceutical industry.

The increase in fundraising observed since 2011 is


confirmed and is amplified on all forms of financing
(risk-capital, IPO, post-IPO). It is to be welcomed as
this strong increase shows a growing appetite for
a sector that presents the difficulty of being highly
capitalistic with extremely long cycles but starting to
claim real success.

Biotech companies must


gain visibility and attractiveness to raise finance.
Partnerships with the pharmaceutical industry develop as well. Their existence is encouraging and this
tendency must continue and grow. Biotech companies
have the R&D and innovation potential whereas the
pharmaceutical industry has the resources to finance
them. Simultaneously, the pharmaceutical industry is
subject to a frenzy of acquistions. Pfizer is ready to
buy out Allergan for 160 billion dollars; Roche and
Celgene have each spent over 7 billion dollars this
year to buy two loss-making companies, Intermune
and Receptos. Biotechs are therefore coveted and
perhaps constitute natural prey for the pharmaceutical industry. Nevertheless, this passion does not
appear to be as strong in France. The founders of
biotech are often scientists who may wish to keep

Questions still exist on the financing chain. Upstream, biotech companies have access to research
tax credit, to Bpifrance and to seed capital funds yet
remain faced with crossing the valley of death
that hampers their development. However, they do
not appear to favour the solution that the resources of
big pharma could open up. The European Investment Fund (FEI) derived from the Juncker plan can generate new opportunities for biotechs. A billion euros
has already been committed since the beginning of
the year. Sofinnova received the support of the FEI for
its new funds and Bifrance is also going to raise FEI
funds. These first disseminations of the Juncker plan
in France are an extremely positive sign. However,
these funds have to invest in French companies.
Biotech companies must gain visibility and attractiveness to raise finance. The hunt for funds often leads
them to neglect the finance, human resources and
compliance functions, whereas these play an important role to present themselves with the best possible
prospects to potential investors. The latter, in the same
way as the markets and regulators, look closely at the
governance and composition of the board. This should
not limit itself to scientists but should also incorporate funtional roles (finances, human resources).
Biotech companies must therefore show greater
rigour and be more vigilant towards internal control
and reporting functions. Having a good molecule
does not mean being a good manager.

france biotech | Panorama 2015

24

KPMG is the leading firm for audit and advisory


services in France and combines a multidisciplinary
approach and sectoral skills. Our 8 200 professionals
access to international key accounts, mid-tier firms
and family groups, microbusinesses and in different
sectors of industry, commerce and financial services.
KPMG in France has more than 70000 clients among
which:
200 listed companies or public-interest entities
Almost 30 % of SME with over 50 employees
6300 associations and actors of the Social and
Solidarity Economy
47000 artisans, retailers and independent
professions
6000 references in public authorities
KPMG France is a member of the KPMG International network, operating in 155 countries. In 2014,
KPMG International had revenues of 24,82 billion
$ US with 162000 employees in 155 pays.

France Biotech is the French association of biotechnology companies and their partners.
Its mission is to contribute to making the French
industry of biotechnologies leader in Europe. France
Biotech is a driving force for change acting with
public authorities, economic organizations, academic
research, media and the investors community in
particular to foster the emergence of biotechnology
as preferential leading-edge industry, and to enhance
the economic, legal, regulatory and managerial
environments of these companies.
Created in 1997, France Biotech is the association of
entrepreneurs that federates leaders of strong growth
innovate companies and their partners (investors,
law firms, school and centre of value). Its members,
situated throughout France, are from the Life Sciences
industry (Biotech, Diagnostics, Medtechs & Biocleantech). Grouped together within France Biotech,
their managers fight to impose a new entrepreneurial
model, to support the creation of firms and jobs, while
sharing the benefits of their growth.
Chaired by Pierre-Olivier Goineau since 2014, France
Biotech takes action today for over fifteen years
with public authorities, economic decision makers
and media.

france biotech | Panorama 2015

ANNEXES

25

3
Appendices

france biotech | Panorama 2015

26

APPENDICES

Sample of companies
A
Ab Science*
Abivax*
Acticor Biotech
Ad Scientiam
Adjuvatis
Adocia*
Advanced BioDesign
Affichem
Affilogic
Aguettant Biotech
AGV Discovery
Aliz Pharma
Alkion biopharma
Alliospharma
Alzprotect
Amarok Biotechnologies
Amoba*
Anagenesis Biotechnologies
ANGANY Genetics
Antabio
APCure
ApoH-Technologies
Apteeus
Archimej Technology
Archimmed
Ariana Pharmaceuticals
Atlanbio
Atlangram
Axelife
B
B Cell Design
BCI Pharma
BGene Genetics
BIOalternatives
BioCytex
Biogalenys
Biomanda
Biomedical Tissues
Biomunex Pharmaceuticals
Biophytis*
Biosynex*
Brain Dynamic Imaging
C
Carbios*
CarboMimetics
Carmat*
Celenys
Cell Constraint & Cancer
Cellectis**
Cellipse
CellProthera
Cerenis Therapeutics*
CermaVein
Chromalys

Chrysalis-Pharma
Ciloa
Cirma
Colcom
Conidia
Crossject*
CYBERnano
CYTOO Cell Architects
CYTOSIAL Biomedic
D
Da Volterra
DBV Technologies**
Defymed
Deinobiotics
Deinove*
Dendris
Dendritics
Diafir
Dialpha
Diaxonhit*
DNA Therapeutics
DOMAIN Therapeutics
DOSIsoft
E
Effimune
ElsaLys Biotech
Emercell
Enterome
ENYO Pharma
EOS imaging*
Eove
ERYTECH Pharma*
EuKaRS
Eveon
F
Fermentalg*
Flamel Technologies**
G
Galenix innovations
GamaMabs Pharma
Genbiotech
Genepep
Genfit*
Genomic Vision*
GenoSafe
Genoscreen
Genoway*
Genticel*
Global Bioenergies*
GLYcoDiag
Graftys
GTP Technology

france biotech | Panorama 2015

H
Hemarina
Histalim
Horama
Horus Pharma
Hybrigenics*
I
Isonic Medical
ID bio
iDD biotech
Imaxio
ImmunID
Immutep
Implanet*
Inanov
InFlectis BioScience
Innate Pharma*
InnaVirVax
Innopsys
Inotrem
Instent
IntegraGen*
Invectys
InvivoGen
K
Kaptalia Monitoring
Klia
L
Laboratoire Symbiotec
LCA-Dermatech
LPS-BioSciences
Lunginnov
M
ManRos Therapeutics
Mauna Kea Technologies*
Medesis Pharma
MEDIAN Technologies*
Medicrea*
MEDIT
Medsenic
Medtech*
Mega BioPharma
Meiogenix
Mellitech
Metabolic Explorer*
METAFORA biosystems
METIS Biotechnologies
Mitologics
N
Nanobiotix*
NanoMedSyn
Naturamole

Novacs*
Neurochlore
Neuronax
Nicox*
Normandy Biotech
Nosopharm
Novacyt*
O
Olmix*
Olygose
Oncodesign*
Onxeo*
OREGA Biotech
Oroxcell
Orphit
Orthotaxy
OSE Pharma*
OTR3
Oxeltis
P
Pacific Biotech
PathoQuest
PEP-Therapy
Peptinov
Pharmaleads
Pharnext
Phenocell
Pherecydes Pharma
Phylogne
Pixience
Pixium Vision*
Plant Advanced Technologies*
PlugMed Heart
PolyplusTransfection
Polytheragene
Poxel*
PrimaDiag

SuperSonic Imagine*
Surgical Perspective
Surgimab
Surgivisio
SynapCell
Syndivia
Syneika
Synthelis
T
Targeon
TBF Gnie Tissulaire
Teknimed
Tetrahedron
Therachon
Theraclion*
Theradiag*
Theranexus
Theravectys
Transgene*
TxCell*
V
Vaiomer
Valneva*
Vaxeal Research
Vaxon Biotech
Vexim*
VFP Therapies
ViroXis
Visible Patient
VitaDX
X
Xegen
Y
Yslab

Q
Quantum Genomics*
R
Regulaxis
ROOT Lines Technology
S
Scanelis
ScreenCell
SeleXel
Sensorion*
Smaltis
Spineguard*
Stentys*
Stilla Technologies
Stratoz

* Euronext/Alternext/
free market
** Nasdaq/dual listed

APPENDICES

27

France Biotech in action

Reading committee

France Biotech acts and participates actively as a driving force


behind propositions to the Government to impose new propositions
and to favour the economic development of an innovative sector,
Life Sciences. After having successfully initiated the Status of Young
Innovative Enterprise in 2004, France Biotech pursues its actions
with the Government in order to strengthen the development of the
Life Sciences industry by proposing new sources of financing. France
Biotech is part of the following different governmental authorities
Health Industries Strategic Council (CSIS),
Industry Strategic Committee,
Medicine of the future.

Pierre-Olivier Goineau,
President of France Biotech

France Biotech leads several working commissions:


Carr des Juristes (legal advisers),
Business Development Commission,
Corporate Finance Commission,
Communication Commission,
Medical Devices Commission,
Advanced Therapy Medicinal Products Commission,
Social and Fiscal Commission.
The different actions of France Biotech have the following objectives:
creation,
development,
promotion,
competitveness of innovative French companies in health.

Haude Costa,
General Delegate of France Biotech

Joffray Lanon,
Project Manager France Biotech

Anne-Lise Berthier,
Chief Editor BioPharmAnalyses

The Panorama of the Life Sciences


Industry in France
Since 2002, France Biotech has produced the panorama of Life
Sciences, the only study in France making it possible to analyze year
on year the evolution of the innovative sector of Life Sciences in
France. The results of this study enable France Biotech to analyze the
situation of companies to support our propositions of improvement
and to make this industry a sector in its own right.

Acknowledgements

Catherine Porta,
Partner KPMG, biotech expert

Raquel Pires,
Manager M&A KPMG

France Biotech wishes to thank the following organizations


that contributed to producing the 2015 issue of Panorama of
Life Sciences in France.
Atlanpole
AVRUL
Eurasant
Eurobiomed
ID2 Sant
Incubateur Descartes
Premice Bourgogne

Art Direction: www.vherrmann.ch

france biotech | Panorama 2015

France BIOTECH
3-5, impasse Reille
75014 PARIS
Tl : 01 56 58 10 70
Fax : 01 56 58 20 33
contact@france-biotech.org

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