The Biotech Boom

In the race to catch up, many countries still have to get over old hang-ups. Gerard Soula took the French biotech firm Flamel Technologies public in the United States in 1996 because at the time he wasn't able to interest French investors. Four years later, Soula still hasn't listed his firm on his home turf because he believes French investors are too risk averse. "In the United States, they call it venture capital and the emphasis is on adventure," says Soula. "In France it's still called capital risk."

Despite Germany's new entrepreneurial fever, failure is still not considered the great American "learning experience." When Olaf Wilhelm wanted to leave his tenured post as assistant professor at the Technical University of Munich three years ago to found Wilex, his father, a doctor too, was horrified. But Wilhelm had uncovered a protein that appeared to cause breast cancer to spread to other parts of the body. When he won a contest in 1997 for aspiring business plans, he had to decide whether to sell the idea or make a go of it himself. The choice for him was obvious, if risky. "My wife said I could always work in construction," he says, grinning.

But brilliant science doesn't always translate into management expertise, another bottleneck in many countries. To compensate, scientists are hiring experienced business managers from big companies, many from the United States. Imminent public-stock offerings are the best lure for these pros. Noxxon Pharmaceuticals of Berlin, which has patented a new way to accurately deliver drugs to a protein, tempted Raimund Eckel, 51, to take over as CEO two months ago from Switzerland's Roche. "I got tired of meetings," Eckel says, shrugging.

With the money flowing so freely, the biotech scene has an air of transience, a bit like the gold-rush towns that sprung up in the American West in the 19th century. In the next few years, many firms will go belly up, merge with each other or get swallowed by the pharmaceutical giants. "The name of the game over the next five years is consolidation," says Helmut Schusler, managing director of venture capitalist TVM in Munich. Some German firms have already taken advantage of big stock-market valuations to acquire U.S. firms. Add that to the criss-cross of alliances, the multilingual labs and the international funding already in place, and biotech truly has become a global industry.

SCOTT JOHNSON IN PARIS, WILLIAM UNDERHILL IN LONDON, IAN MACKINNON IN DELHI, KAY ITOI IN TOKYO, MAC MARGOLIS IN RIO, DAN EPHRON IN JERUSALEM AND EMMA DALY IN MADRID

© 2000