Widening countries look to EU biotech initiatives for support

Innovators in central and eastern Europe are urging the Commission to use upcoming regulatory initiatives to unlock the potential of the region’s burgeoning biotechnology sector, which continues to face challenges including a lack of private investment.

“There’s an outdated perception that central and eastern Europe is not a significant market for, or place for the development of, healthcare innovations,” said Balázs Fürjes, managing director of EIT Health InnoStars, one of the eight geographical areas in the European Institute of Innovation and Technology (EIT) Health community, and which includes southern, central and eastern European countries.

When it comes to biotechnology, there are positive signals that the innovation gap within Europe may be closing. The value of Lithuania’s biotech industry, for instance, increased ten-fold between 2010 and 2020, and the country now ranks third in the world for investment in biotech R&D according to the OECD. The CEE region “is not only catching up but also has the potential to play a crucial role in advancing healthcare innovation,” Fürjes said.

But there is room for improvement. The region is home to a lot of clinical trials, but many of them are run for international sponsors. “The international investment from these trials is positive, but we should aim for more homegrown innovation,” Fürjes said.

The Commission sees biotech as a key sector that requires support if the European economy is to become more globally competitive. To this end, an EU Biotech Act is currently in the works as part of a broader European life sciences strategy.

Fürjes argues that these initiatives should recognise and involve the emerging innovation ecosystems in southern, central and eastern Europe. Access to capital, robust validation frameworks, harmonised technical standards to support cross-border collaboration, regulatory support and experienced mentorship could all help boost local innovation.

Investment gap

Closing the investment gap is a top priority. CEE countries do not have the same culture of venture capital or private finance as those in the west, and innovators are “more likely to use personal or even family networks to get support,” Fürjes said. He would like to see a specialised EU-backed venture capital instrument for healthcare start-ups.

Monika Ślęzak, a coordinator of industry contact point MedTech&Health at the Łukasiewicz Research Network’s Polish Center for Technology Development (Łukasiewicz PORT), also thinks health start-ups in the region would benefit from EU measures to de-risk investments and acceleration activities to help them scale up.

This is because biotech companies in countries such as Poland often find it more difficult to secure national funding for innovation projects, in part due to governments prioritising emerging security concerns.

Related articles:

• Horizon Europe bolsters biotech in the Widening countries
• Hungary to promote a bioeconomy research partnership for central and eastern Europe

Business education activities like those offered by EIT Health, of which Łukasiewicz PORT is a member, are also needed, because collaboration between industry and academia is less common in CEE countries. “Here, we are more like a market for big pharma than the place where they set up their innovation centres,” she said.

Ślęzak was part of an EIT Health InnoStars delegation that met recently with policymakers in Brussels to discuss upcoming regulatory initiatives. “Deregulation would be highly beneficial in central and eastern European countries,” she said. A streamlined legislative environment is one of the main demands of the EU-wide pharmaceutical industry for the upcoming EU Biotech Act.

Ślęzak would also like to see separate funding schemes for critical infrastructure supporting the development of new medicines and security of supply for established drugs. “Central and eastern Europe is known for generic medicine production, but at the same time we have biotech companies that are willing to invest in new, innovative drugs or molecules. It's difficult when you have one funding scheme to provide funding for both,” she said.

Widening measures work

EU Widening measures have proved an important source of support for the biotech sector. For example, Łukasiewicz PORT was engaged in a Twinning project in neuroscience, which later expanded into the P4Health Teaming project, incorporating both oncology and neuroscience. “Institutions like PORT, after establishing partnerships with leading western European entities, are now positioned to mentor other Polish and Widening-region institutions, enhancing the overall research and innovation capacity,” Ślęzak said.

The region’s interest in biotech is not limited to the health sector. Many CEE countries have significant agricultural sectors, meaning they produce large amounts of biomass, but they lack the research and innovation infrastructure and processing facilities to turn this into innovative food, materials and energy.

The BioEast initiative, which launched in 2016 and brings together national agricultural ministries, aims to advance sustainable and circular bioeconomies. Last year, Hungary used its presidency of the EU Council to advocate for a new EU partnership to boost the development of the bioeconomy in the region.

Meanwhile, life science and biotech organisations from Latvia, Lithuania and Estonia came together at the beginning of the year to establish the Baltic Biotechnology Hub, a follow-up to the Horizon Europe-funded BioConnect project.

The hub is designed as a platform for collaboration among businesses, academia, policymakers and society, to accelerate innovation, talent development and international partnerships, and to increase the region’s influence on EU regulations and its ability to attract for investors.

Food tech

There are also signs of promising food biotechnology ecosystems in the CEE region, and the EU Biotech Act and life sciences strategy could allow the EU to unlock this potential, said Pauline Grimmer, policy manager at nonprofit and think tank the Good Food Institute Europe.

“Central and eastern European countries have the potential to benefit from the lower production costs of innovative foods such as fermentation-made products,” Grimmer said.

“Over the last year, we have seen encouraging examples of central and eastern European governments recognising the opportunities presented by food biotech,” she added. “With the right policy and regulatory framework, central and eastern Europe could become a key innovation hub in the EU’s bioeconomy landscape.”

Last year, Innovation Agency Lithuania agreed to collaborate with trade association Cellular Agriculture Europe to support the development of the country’s cultivated meat and precision fermentation ecosystem, including developing a code of good practice for pre-approval novel food tastings.

Also last year, Accelerate Estonia, which advises the government on removing regulatory barriers to innovation, held one of the first public novel food tastings in Europe, including ingredients from ÄIO, an Estonian start-up developing sustainable fats and oils.

ÄIO’s chief innovation officer, Mary-Liis Kütt, says there is not a lack of grants in Estonia or at international level, but what is missing is support on the regulatory and customer acceptance levels. Novel food start-ups have called for more clarity around the approval process in Europe.

She hopes upcoming EU initiatives will see the creation of a regulatory sandbox or help desk at European level, a “free space to share knowledge, to learn from each other,” and that start-ups will have a greater voice in policy discussions.

CEE biotech start-ups face similar challenges when it comes to overcoming regulatory and quality barriers as companies in the rest of Europe, she said. The region even has the advantage of better access to production facilities, as contract manufacturers are increasingly moving east, because they can set up and run factories more cheaply.

At the same time, the Baltic countries especially must deal with the consequences of Russia’s invasion of Ukraine, which Kütt says has scared off investors. “It’s a bit of an unstable situation for investments,” she said.