Investors are urging Europe’s biopharma companies to embrace the continent’s long-established specialisation as an innovation hub as the route to better collaboration and success amidst an ongoing dearth in funding for biotechs.
At the ongoing CPHI Europe 2025 meeting in Frankfurt, Germany, investors highlighted that Europe’s early biotechs are currently facing a harsh funding environment.
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The average funds raised in initial public offering (IPOs) per quarter have dropped drastically since the IPO spike during the Covid-19 pandemic, despite share prices increasing for major pharma companies, said Thomas Kern, managing director at investment strategy company ISP Healthcare, which has offices in Austria and Germany.
The current climate is characterised not by the lack of funds, but rather a cautious attitude among the industry’s investors according to Martyn Eeles, managing director at Ireland-based Clarma Capital. Eeles noted native funding is especially scarce to back Phase II trials when many European biotechs look abroad for support, he added.
The placement of the global industry’s capital has diversified, said Anand Govindaluri, CEO of Singaporean investment company Govin Capital. In Singapore, Govindaluri said there is no such lack of funding for early stage clinical work. However, while Asian capital markets for biopharma are strong, he stated the region remains largely focussed on innovations in manufacturing rather than in the clinical assets themselves.
Govindaluri said this represents significant opportunity for collaboration between Asia and Europe, where manufacturing capabilities are relatively rudimentary, but technical innovation in assets remains dominant. Backed by experienced researchers and highly innovative universities, he said Europe is in a unique position to advance therapeutic modalities such as cell and gene therapies for which specialist technical skills are crucial.
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By GlobalDataAt the same time, the European Union (EU) has prioritised efforts to boost domestic manufacturing. On 4 June 2025, the European Council agreed on a proposed EU Pharma Package which would, among other measures, seek to shore up the continent’s drug manufacture to address shortages, similar to those seen during the Covid-19 pandemic.
Such efforts also mirror US President Donald Trump’s slew of import tariffs on pharmaceuticals aimed at encouraging developers to establish manufacturing facilities in the country. After several negotiations, the US and the EU agreed to a 15% tariff on the EU earlier this year.
To realise the benefits of collaboration with Asian companies, Govindaluri said European biotechs must move beyond conventional capital raising methods, as venture capital becomes harder to obtain. He claimed product-specific financing, creative royalty agreements, and public-private partnerships offered routes for technically innovative developers to access new sources of funding.
