Europe has turned a corner. So say the experts who scrutinize trends and happenings in the volatile and risky world of biotechnology. Europe’s infant biotech industry appears to be making strides toward adolescence, spurred on by cautious investor interest, infrastructure improvements and sheer resilience.

But while it is showing signs of maturing, the industry still has some catching up to do with the thriving U.S. biotech industry, which is now into its fourth decade.

According to Ernst & Young’s 2005 global biotechnology report, “Beyond Borders,” many companies in Europe are showcasing a new sense of economic reality and are now better placed to tap into the biotech industry’s momentum there.

Throughout Europe, local governments are striving toward new levels of excellence and the industry, overall, is benefiting from focused optimism.

United Kingdom Leads the Way

As the leading player in Europe’s biotechnology picture, the United Kingdom boasts more than 450 companies that have a significant R&D and/or manufacturing presence.

The world’s top 12 pharmaceutical companies have major facilities in the UK, and UK companies account for 40 percent of new drugs in clinical trials in Europe.

A stable political and economic environment, an established critical mass, and a supportive government are among the UK’s advantages to biotech companies.

One of the newest businesses to announce operations in the UK is Japanese pharmaceutical maker Eisai Co.

Eisai said in January that it would embark on a project to develop a strategic European base from the UK. The new hub, on which construction should commence this year, will include Eisai’s European headquarters, and discovery research, clinical development and manufacturing operations, as well as sales and marketing.

The project will ultimately bring more than 500 new jobs to the Hatfield Business Park in Hertfordshire.

Eisai employs more than 8,000 workers worldwide and focuses its discovery and product efforts on three major therapeutic areas: neurology, gastro-intestinal disorders and oncology/critical care.

California-based Gilead Sciences Inc. added its name to the growing roster of UK biotech firms when it relocated its European headquarters from Paris to London late last year.

The location advantages that drew Gilead exemplify why so many global biotech firms find the UK a perfect fit for their European-based operations.

“We chose the London area as our new European base after a careful appraisal of the options available,” said Kevin Young, executive vice president of commercial operations for Gilead. “There is a good supply of high quality staff and business support services, a favorable business environment and excellent communication links to the U.S.

“Proximity to our investors in London is another advantage,” he added. “More generally, we are impressed by the UK government’s recognition of the importance of the pharmaceutical and biotechnology industries, and its commitment to dialogue with them.”

Meuse-Rhine Triangle Offers Integrated Assets

Partnering on many levels is becoming more common across Europe, and nowhere is this more evident than in the burgeoning tri-national Meuse-Rhine Triangle region.

The region combines the assets of three countries — Belgium, Germany and the Netherlands — and the area’s dynamic business climate is fed by major cities Aachen, Eupen, Hasselt, Liege and Maastricht. Additionally, the Triangle provides strategic proximity to other important cities, including Amsterdam, Brussels and Cologne.

About 300 innovative companies involved in medical technology and biotechnology, five top universities and three academic hospitals, and a concentration of 130 research centers round out a region that is often called “the heartbeat of life sciences in Europe.”

Economic activity is ongoing in the Triangle where synergies between universities, businesses and local governments have resulted in cutting-edge developments and spinoffs.

The area has also drawn established firms, such as Boston Scientific, which opened a new European distribution center in Kerkrade, the Netherlands, last year.

Biotech business in Germany’s Rhineland has also gained support from BioRiver, which strives to cultivate technology transfer between science and industry.

The Meuse-Rhine Triangle and BioRiver areas are especially known for their experienced research teams, said Philip Anderson, president of P.W. Anderson & Partners.

“I have visited the medical schools in the region, including Aachen and Dusseldorf, that have pre-eminent R&D programs, and Aachen has successfully spun off a number of medical technology companies,” Anderson said.

Anderson’s company, which represents Bayer Industry Services Corp., serves as a matchmaker between university medical scientists and major life sciences companies.

Biotech Activity is Multi-Faceted

All across Europe, science parks, research institutions and intellectual assets beckon to biotech companies looking to expand. No matter where you turn, biotech-related infrastructure developments, innovative initiatives or expansion projects are underway.

Spain’s biotech base hopes the new Barcelona Biomedical Research Park will be a significant catalyst behind its desire to create 120 companies and 3,000 jobs in life sciences during the next 10 years.

The park, which opened last year, will have the capacity for more than 1,000 researchers and 33,000 square feet of laboratory space and scientific equipment.

In the Czech Republic, a Web site was recently launched by the South Moravian Innovation Center in cooperation with CzechInvest. The online portal, www.gate2biotech.com, is designed to facilitate connections between corporate or educational entities, Czech contract partners for manufacturing or R&D, and skilled labor.

Many foreign science companies, such as Lonza Biotec, IVAX Pharmaceuticals, Baxter International, Valeant Pharmaceuticals International and Arrow International CR, have found the Czech Republic to have surprisingly strong capabilities and have launched full-fledged manufacturing facilities there, said Rene Samek, director of the Investment and Applied Research Support Division for CzechInvest.

“Others see the country as an opportunity for contract R&D and manufacturing based upon the level of research professionalism, cost efficiencies, a relatively non-restrictive genetic engineering R&D climate and 20-year patent protection,” Samek said.

In Switzerland, orthopedics company ReGen Biologics Inc. recently launched a wholly owned subsidiary, incorporated as ReGen Biologics AG, in the Canton of Appenzell.

And pharmaceutical goliath Pfizer made headlines in 2005 when it selected Sweden over 10 other possible sites for a new biopharmaceutical manufacturing plant.

The plant, worth upwards of $150 million, will be located in Strangnas, near Stockholm, and adjacent to Pfizer’s existing facility.

Pfizer will manufacture a synthetic form of the growth hormone Genotropin at the new plant.

An Industry in Progress

With its key research and development institutions, pool of talent and local initiatives aimed at luring new companies, Europe is proving that it has the components necessary for sustaining a

viable biotech industry.

The road ahead, however, will not be easy. Regulatory challenges, public and private financing issues, and commercialization concerns pose dilemmas that are in need of resolutions.

Even so, the bottom line remains that Europe’s newest major industry is in the process of creating an enduring foundation to cultivate tomorrow’s scientific innovations. Clearly, there are plenty of success stories that indicate Europe is on the right track.