France Biotech asks for stimulus package and makes specific recommendations.

France Biotech reports a 79% drop in equity investments during 2008 in biotech companies in the country relative to 2007. Last year France logged €143 million, or about $183 million, compared to €694 million, or roughly $892 million in 2007.

Investment in listed companies was €12 million in 2008, a 98% fall, according to French Biotech, an association of French life science companies and their partners. Venture capital investments in private companies was €132 million last year, 27% lower than in 2007.

France Biotech says that the trend for early 2009 appears to show continued degradation. “In order to underpin the optimism of our entrepreneurs, we must adopt an aggressive stimulus plan for young, innovative companies,” remarks Philippe Pouletty, M.D., France Biotech’s chairman. “Assuming that they can access finance, today’s innovative SMBs will become tomorrow’s multinationals and thus constitute an essential driver of strong, sustainable economic growth.”
The government has also reportedly weakened its support for young, innovative companies during 2009. The budget for the OSEO state innovation agency, a partner for innovative companies, has been cut by half to €320 million. Additionally, reform of the research tax credit led to an average annual reduction of 56% for biotech companies incorporated within the last five years, in view of changes in tax rates and the exclusion of OSEO refundable advances as eligible expenditures for the rebate.
France Biotech recommends that the OSEO Innovation’s budget for 2009 be doubled so that it returns to 2008 levels and that it gets tripled in 2010. It also suggests a reform of the CIR to distribute the research tax credit more equitably between SMBs and multinationals. Additionally, the association points out that attributing 50% of the government’s Strategic Investment Fund to innovative French SMBs would enable them to acquire undervalued foreign companies and technologies. Finally, France Biotech recommends that the caps on tax-efficient investments be removed for young, innovative companies and the duration of the young innovative company fiscal status be extended from 8 to 15 years.

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