Monday, April 3, 2000
OXFORD - European biotech companies have had their best quarter
since 1996, with an 83 increase in the market capitalization of the publicly
quoted sector from $20 billion to $37 billion. However, while the stock markets
have been hot, European companies have been much slower off the mark raising
additional funds than their U.S. counterparts. This is despite the fact that
nearly one in five of Europe's publicly quoted biotech companies has less than
one year's cash in the bank.
It is not so much that European companies have been missing
the financing boat, but that there is a difference in financing cultures. U.S.
companies, which have long experience of the boom-bust cycles of biotech financing,
are comfortable with the eat-as-much-as-you-can financing model. But European
companies - or more precisely European investors - have historically preferred
a more conservative approach.