With 350 million people living in the European Union (EU) alone, the EU represented a 26.3 percent share in worldwide pharmaceutical sales in 1997.

Of the 51 new medicines launched worldwide in 1996, 23 were first sold in European countries and 30 originated from Europe, according to Ernst & Young's 1997 Biotech Industry Report. There are 716 European bioscience companies, investing $1.885 billion in R&D and employing 27,500 people. Overall, the biotech sector is growing at more than 20 percent annually.

In the 1980s, most biotech companies had to look to the United States for the expertise and venture capital money needed to develop new drugs and processes. Today, locations in Europe offer R&D facilities, experts in the field and increasing availability of money for investment.

But now, with Europe's three new stock exchanges -- EASDAQ, AIM, and Euro Nouveau Marche -- biotech companies are more able to raise capital.

Governments around Europe are also making major commitments to move scientific research into private industry.

Boosting Europe's attractiveness to U.S. biotech companies are dramatic efforts by the European Commission to introduce more uniform regulatory policies that lead to faster approvals and an increase in funds available for R&D.

Speed of drug approval is appealing
For U.S. biotech companies, faster lead times in Europe for getting new drugs to market has prompted many to either set up shop in Europe or merge with or acquire biotech and biopharmaceutical entities.

A recent study by researchers at Boston's Tufts University shows that most recombinant protein drugs developed by U.S.-based companies were approved and marketed in Europe long before they received approval by the U.S. Food and Drug Administration.

Ed Doyle, a California-based biotech location consultant, agrees.

"Most new medications developed for use in the United States require a time line of eight to 10 years to pass the FDA as well as scientific steps necessary for human use," he says. "The capital required over that time period could be as much as $300 million. Given the number of potential competing medications, the CEO is faced with a time-to-market urgency."

The message is simple: Lessen the time-to-market and the company will decrease the risk that it will be beaten in the marketplace.

"The methods are also simple," he says. "Go to an area outside the United States for your research, clinical trials and market entry that has the best science, the best regulatory reputation, and the quickest and least cost for each of these functions."

It's not surprising that U.S. biotech firms are increasingly collaborating their research with European biotech companies and tapping into Europe's wealth of expertise at the university level since most top professors in the United States are already affiliated with a company.

European universities with a specialty in biotechnology are also instrumental in assisting the commercialization of medicines that are developed as a result of research efforts. Catholic University, for example, helped provide the seed money to International Brachytherphy (Ibt), a U.S. start-up firm, which developed a new cancer radiation treatment. The university, as others, also has an R&D park to help "incubate" such companies.

Finding the right site
Biotech firms considering setting up shop in Europe, however, still confront differences in language, culture, business partners, and regulations.

Many are aligning their R&D efforts in European "centers of excellence" in life-sciences which are emerging in the cities of Amsterdam and Leiden in the Netherlands; Brussels and Louvain, Belgium; the French cities of Paris, Montpellier and Lyon; the United Kingdom's Cambridge, Oxford and London; and Germany's Heidelberg, Munich and Berlin.

Other locations within these countries, as well as Scandinavia, are making inroads in biotechnology.

The UK is home to a third of all biotechnology companies in Europe and over 400 companies involved in bio-related activities. The UK is also one of the world's largest financial markets, and boasts the largest venture capital industry in Europe, with several venture capital institutions specializing in biotechnology investment.

Last December, the New York-based pharmaceutical giant Pfizer announced a $175 million investment in a new research facility at its UK base in Sandwich in southeast England.

Germany is the world's third-largest supplier of medical technology products, and the world leader in electromedical devices. A key factor is that German venture capital funding is the second highest in Europe.

The French are Europe's largest per capita consumers of pharmaceutical products. France's pharmaceutical in-dustry comprises 334 companies in a fragmented market.

In Belgium, cooperation between Belgian universities and Smith-Kline Bee-cham Biological's own research group are driving factors in the company becoming a world leader in vaccine research and production. The company is currently undergoing several major expansions.