The gap between an abundance in technologically knowhow and the small amount of successful commercialization in Europe is called the European paradox. This paradox is caused by the academic culture that rejects entrepreneurship. One of the sectors in which this plays an important role is the biotechnology sector, especially in the fields of prevention and care of deceases. In this so called biomedical industry there are changes going on that give an optimistic outlook.

Till early 2000 the European universities found companies and entrepreneurs irrelevant. Intelligent scientists were ought to stay within the university aiming at a professor position. For less talented scientists was no room, according to the professors, they would fit in the company life. Also the founding ‘scientists’ of start-ups were more or less ‘gentleman farmers’. They never took the step from the university to the company, however they received a share in the upside potential (through funds or stocks), without being exposed to the risks or hard decision-making process that come along with a start-up.

Recently however a new generation of scientists emerged that have a much more positive outlook on business opportunities. The transfer to the biotech industry has now become an interesting alternative for a academic career.

Also for the government it is paifully clear that to much of the European technology is not put to use. In 2006 the total worth of American listed biomedical companies was 392 billion euro, compared to 62 billion euro in Europe. The scientific output in this sector however is equal as well in size as in quality. Confronted with these facs the European governments and universities have realised that actions should be taken to alter this situation. After 2000 many attempts have been made to professionalize technology transfer and stimulate entrepreneurship. Today entrepreneurial scientists are stimulated and praised for their efforts by the university. Against the trend a couple of successful biomedical organisations were founded in Europe. Most of them are spin-outs from universities. If we consider a stock worth of 100 million euro a success, today 38 European biomedical organisations are successful. Of these five are worth over 1 billion euro, including the Dutch Crucell. Their presence in Europe and the stories behind their foundation are an inspiration for future entrepreneurs in the academic world.

Established biotech organisations are also a cradle for new initiatives. Galapagos Genomics is a typical example of this, which originated as a spin-off from Crucell in 1999 and now is a listed company, worth over 170 million euro and has 450 employees.

Last but not least the grow and success of the high-tech organisations are a source of well educated and experienced staff.

In general, venture capital showed disappointing results from investment done in the last years of the previous millennium. As a result many of the larger funds direct their attention to the United States. Also many funds experienced difficulties getting capital.

This shortage of professional venture capital in Europe results in a survival of the fittest. Only the strongest survived. In order to diminish a cash burn many business plans were altered aiming at more turn-over. This does not only affect the cash consumption but it also creates a commercial environment in which all parties were focussed on selling products or services.

Valuations diminish when less money in on the market that is looking for investments, as the laws of economy explain. As a result the later stage financing rounds had much realistic valuations compared to before 2000. From this investment point of view Europe has an advantage over the US.

It looks like we are heading towards a brighter future. This is not only relevant for the grow of existing biomedical organisations, but also important for builing new successes. Combined the above mentioned events are an ideal starting position for a coming boom of the European biomedical sector. For people with an entrepreneurial mind this is an excellent moment to start one of the future success stories.

Dominico (Dinko) Valerio was founder and till 2004 ceo of Crucell nv. He was also founder of Galapagos Genomics, a spin-out of Crucell. In 2005 he started, together with Michiel de Haan, Aescap Venture, a venture capital firm focussed on European biomedical organisations.

Dinko Valerio is chairman of BioBusiness Event and Bio Career Event on 31 May. In his opening speech he will present more on this theme.