The US: To Go, or Not to Go?

Whether or not European biotechs should establish operations in the US may seem like a no brainer: it's the biggest drugs market, with more potential partners, better funding, more promising exits for investors and a more experienced management pool than Europe. But getting there-and getting noticed-isn't easy. And since most executives agree that going to the US half-heartedly isn't worthwhile, Europe's biotechs need to think hard about when and whether they're ready to go. For a minority, setting up in the US may not be the right solution-for now.

There was little surprise when UK-based Shire PLC in May 2004 announced the establishment of its R&D headquarters and US commercial headquarters in Pennsylvania. "We need to address reality: 70% of our revenues come from the US," says CEO Matt Emmens, a US citizen who joined Shire in March 2003 from Merck KGAA . Other European-headquartered groups have made the same decision: Warner Chilcott PLC and Elan Pharmaceuticals recently sold off their UK and European businesses respectively; Galen changed its name to that of its US subsidiary, Warner Chilcott PLC , as a result [See Deal][See Deal].

For marketing-focused groups without the resources to go truly international, a US move makes sense: one approval accesses a population nearly as large as the whole of Europe. Prices are...

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