Biotech Companies Outside the United States

Makkah Newspaper

06-02-2025

The biotechnology industry is at the forefront of innovation, shaping the future of healthcare, agriculture, and environmental protection. However, this industry faces significant challenges outside the United States, particularly in regions like Europe, the United Kingdom, Asia, and Australia, where gaps in funding, infrastructure, and talent development hinder the growth of biotech companies.
Biotech companies outside the U.S. struggle to secure the necessary funding to compete with their American counterparts. The U.S., especially hubs like Boston and San Francisco, has successfully built robust ecosystems supported by venture capital, favorable tax policies, and a culture that embraces risk. In contrast, regions like Europe and Asia often lack the capital required to support biotech firms, resulting in the absence of economies of scale that facilitate the development of critical infrastructure.
For instance, the biotech hub in Cambridge, UK, faces a severe shortage of laboratory and research space. According to estimates by the UK-based firm Bidwells, there is a demand for over 1 million square feet of lab space, while only 10,000 square feet are currently available. This infrastructural shortfall adds to the complexity of funding challenges.
Another major issue is the brain drain to the U.S., driven by disparities in salaries and job opportunities. A biotech PhD graduate in the UK earns approximately $50,000 annually, compared to over $70,000 in the U.S. The gap widens significantly for experienced executives, who receive substantially higher salaries in the U.S., along with additional stock options and more favorable tax systems. This brain drain weakens local industries and makes it difficult for non-U.S. companies to build experienced leadership teams.
Unlike the U.S., where a unified market fosters collaboration and innovation, biotech companies in Europe face fragmented ecosystems. Each country has its own regulations, legal frameworks, and tax policies, creating a complex and often inefficient environment for startups. Moreover, the lack of specialized professionals, such as lawyers, accountants, and investment bankers with biotech expertise, exacerbates these challenges.
British and European investors traditionally favor established, revenue-generating companies over startups. This conservative approach limits the flow of venture capital into high-risk sectors like biotechnology. For example, UK pension funds, which manage billions of pounds in assets, are hesitant to invest in innovative projects, unlike their U.S. counterparts. These obstacles reflect cultural and structural barriers to biotech investments outside the U.S.
In light of these challenges, many biotech companies outside the U.S. seek to list on American stock exchanges to secure funding. Between 2018 and 2021, more than 20 European biotech companies and several Australian firms went public on the Nasdaq. However, listing on the U.S. market is not a straightforward solution. It requires significant resources and often results in the complete relocation of operations to the U.S. Consequently, the profits, jobs, and intellectual property that could benefit the companies' home countries are instead absorbed by the U.S. economy.
Overcoming these challenges requires fundamental structural changes. Governments, investors, and industry stakeholders must collaborate to create supportive ecosystems. This includes improving funding mechanisms, developing infrastructure, and harmonizing regulations to foster innovation. While the challenges are substantial, there is reason for optimism. Targeted efforts and increased awareness of these structural issues can lead to tangible progress, paving the way for a more balanced and globally competitive biotech industry.