Venture Capital and the European Biotechnology Industry

Why strongly recommend a rather depressing book, which borders on a polemic of condemnation of a core component of the life sciences finance sector, in today's catastrophic times for entrepreneurial biosciences? Venture capital (VC) and the European biotechnology industry is a timely contribution to the very limited body of work that dissects the biotechnology ecosystem, particularly in Europe. Written just before the global financial crunch, the book provides some explanation of the sub-optimal state of the European biotechnology industry with a particular focus on the United Kingdom.
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Bains provides a litany of reasons why European biotechnology, which showed a lot of promise in the late 1980's, has fallen behind the US sector - including the limited incentives for academics to take a true leap into entrepreneurial bioscience, the small scale of individual companies and worst of all, in the authors eyes, the lack of alignment in terms of incentives, management priorities and desired outcomes between venture capitalists and their portfolio companies. The author tends to be charitable when it comes to assessing whether the recent generation of biotechnology company founders and senior managers 'had what it takes' to build winning (or perhaps simply sustainable) companies. We should also consider that despite all the expenditure on bio-parks and bio-clusters, very few places in Europe have the critical mass of scientists, bio-pharmaceutical companies, investors, service providers and entrepreneurs to permit the cross-fertilisation and intense collaboration required to nurture and grow biotechnology companies.
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This is indeed a pleasant book to read, despite its rather sad subject matter. The author is relentless in his pursuit of the VC suspect and may be a little too charitable with government, which in many ways has encouraged and even to some extent financed the VC biotechnology 'system'. One also occasionally discerns some nuggets of elegant analysis about how the pharmaceutical industry fits into the puzzle of biotechnology entrepreneurial finance.

The author does not dwell on the future of the European biotechnology industry in any great depth. At the end of the day, the value generated by VC and private equity professionals varies with economic cycles and irrespective of our personal views about their utility, we all have to accept that they are a necessary evil as key players in the creation of a vibrant and sustainable life sciences sector.

Leonard Lerer
Santeum Partners, Zurich, Switzerland

J. Commercial Biotechnology.

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The Emporer's new ... VC Fund

Venture Capitalists should read this book, regardless of their interest in the European Biotech sector per se, and reflect on the actions that they are taking with their investee companies. Inspired Founders should read it too and reflect on the viability of their business model. In a sense this book is all about business models; a dull sounding topic until you read the first short chapter and sense the character of the author. Bains is a rare breed: a Cambridge academic who speaks from experience not just research. He has founded several biotech companies, raised funds, worked as a consultant to VCs, advised startups, done it himsel (;does it himself; I should say as he has another on the blocks right now) and loves his subject. I hope that every VC reads this book. And let themselves enjoy the exposition. Secretly.

Dr Simon Haworth, co-Founder of IPSO Ventures

(London Life Sciences News, March 2009)

Bains is well placed to produce a hard-hitting book on the industry - surprisingly, however, not on how to run a successful biotechnology business, but instead to ask why there are so many failures in the biotechnology industry. Bains achieves his aims in 13 well argued chapters supported by quantitative evidence in the form of graph, charts and tables that set the EU industry in broader international context.

As it makes such powerful points, it would for that reason alone make a sound purchase for any university library. Certainly, it is a must for anyone requiring a critical reading of the technology transfer industry, or for academics with research interests in this area, as well as those concerned with the apllication or management of business development in the life sciences. It should come high on the reading list for students on courses in science enterprise, particularly at Master's level. ... It ceryainly struck many chords for this reviewer, who has watched the unfolding of the enterprise agenda in UK universities over the last seven years.

Dr. Lorraine Warren
School of Management
University of Southampton

The International Journal of Entrepreneurship and Innovation [10(4): 325-326, Nov 2009]

VC: Virtuous or Vampire Capital?

It is his intimate familiarity with the seminal events of company development through the biotech growth, boom and bust eras, with the liberal sprinkling of real-life examples on almost every page that lends credibility to the book.

With this well-referenced book Dr Bains has filled an important lacuna within the literature on European biotech VC financing with an accessible primer for MBA students — particularly those researching biopharma and VC business cases — and for students undertaking specialist, industry-focused, post-graduate courses such as bioscience enterprise at the Institute of Biotechnology, University of Cambridge, where Dr Bains lectures in entrepreneurship.

Gerhard Symons

Pharmaceutical Executive Europe (Nov. 2008)