It was all red, white and blue — except in reverse order — at one of the multitudes of opening receptions at the annual J.P. Morgan Healthcare Conference in San Francisco on Sunday.
The tricolor of France was not flying but the message of be-in-France-or-miss-out-was not loud and clear at the Vive La Biotech reception at the Minna Gallery. The standing-room-only event hosted by Women Innovating Together in Healthcare included a fireside chat which featured Olivier Brandicourt, CEO of French drugmaker Sanofi and Nicolas Dufourcq, CEO of investment bank bpifrance, being interviewed on stage. [Bpifrance is a joint venture between two French public entities.]
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Dufourcq was the unabashed cheerleader painting a picture of a changing France ushered in by the election of Emmanuel Macron who, he said, has made it his priority to build an entrepreneurial ecosystem to make France a startup haven. Macron is also trying to reform the labor laws and reduce the nation’s corporate tax rate.
Nicolas Dufourcq, CEO, Bpifrance
“The election of Emmanuel Macron is the symptom of what has started to change profoundly in the depths of the French society, I would say, six to seven years ago,” he explained. “So it’s a milestone in a story that started quite a long time ago actually, very progressively. Which leads to the situation today in the country where the ecosystem of entrepreneurship is absolutely buoyant.”
How buoyant? Apparently, 25 percent of the students coming out of school want to be entrepreneurs, Dufourcq said. There are 300 biotech startups that Bpifrance has invested in France while a decade ago that number was only a third of that.
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“[This number] going to mushroom and snowball consistently,” in the next few years, he added.
The nation has dedicated 5 billion euros (more than $6 billion) to biotech startups in France, he noted of which 1 billion comes from direct investment through Bpifrance.
But here’s the problem.
The good news story is being ignored by U.S. investors and much of that is because of France’s “legacy reputation.” Dufourcq didn’t specify what that reputation was but the implication was clear. There is a perception of the French work environment that has been cemented in the American mind by French labor laws such as the 35-hour work week. The idea is that the French worker is lazy and would rather munch on croissants than toil away to create a booming economy.
The legacy reputation is one reason, among others including the lack of liquidity in the French public markets, for which U.S. investors have largely ignored France.
Consider this: In continental Europe, 95 percent of the capital invested in biotech and medtech startups in France comes from French LPs and other European investors, Dufourcq.
“There’s very very little American capital,” he declared.
By comparison, if one were to look at the Israeli biotech market, 50 percent of the money comes from American investors. And when you look at the U.K biotech space, probably 40 percent of the capital invested in biotech is American capital, Dufourcq argued.
“One of the reasons why I am here tonight is to tell you guys, my American colleagues: Invest in the French biotech venture ecosystem, please,” he pleaded. “It’s an absurdity for you guys to fly over Paris to go to Tel Aviv. So, please stop by Paris. There’s a lot of money to be made.”
The ballyhooing aside, there was an acknowledgment that much more needs to be done to create a unique ecosystem like the one Boston has fostered in the U.S.
Sanofi’s Brandicourt explained that fewer biotech companies in France means that the network necessary to grow at a fast pace hasn’t been built yet.
“For instance, we need a network for bioproduction,” Brandicourt said, and added that the system for reimbursement in France is also slow.
Dufourcq acknowledged that while money is there to invest in startups, and the market capitalization of startups on the Euronext stock exchange is nothing to thumb your nose at, one key ecosystem participant is missing.
“What’s still in missing in Paris specifically, and I would say in most European cities, is stock market analysts who are dedicated to biotech,” he said. “Most of them are in New York or Boston or San Francisco.”But the money is here. 5 billion euros only in biotech and medtech. Only in France. 5 billion of dry powder today. It’s massive.”
Photo: Golden_Brow, Getty Images
