Investing in French Biotech--When It's Not Too French

The French government has always been vocal about its desire to turn France into a leader in innovation and high tech industries. On the pharma side, it certainly influenced heavily the success of Sanofi-Synthélabo's acquisition of Aventis to create Sanofi-Aventis —now the top European drug firm, with headquarters firmly established in Paris. [See Deal] (See "Can Political M&A Make Commercial Sense?" In Vivo Europe Rx, June 2004Also see "Can Political M&A Make Commercial Sense?" - In Vivo, 1 June, 2004..) The country's biotech industry has manifestly failed to take off, however, despite a top quality research base. Not a single company has floated since 1999, half a dozen have tried but failed over the period. Only six firms are listed—and those such as Flamel Technologies SA with dual listings are traded most actively in the US. The entrepreneurial spirit, drawn out of its socialist den during the 1997-2000 boom, has largely retreated along with most VC funding and public investors.

Hence CNS group Neuro3d SA 's €31.5 million ($42.7 million) third round financing in December 2004 provided welcome good...