Foreign funds available for biotech companies

October 11, 1991|By Timothy J. Mullaney

Foreign investment in U.S. biotechnology firms is growing, and small biotech firms hobbled by scarce capital at home can turn to Europe and Asia for investment capital and help in other areas, experts told a conference of industry leaders yesterday in Baltimore.

"The foreign capital will come in, and the big opportunity is to access it," said G. Steven Burrill, a San Francisco-based international director of the accounting firm of Ernst & Young.

Mr. Burrill and others told a World Trade Center Institute conference at the Omni Inner Harbor Hotel yesterday that European and Asian companies can help biotech companies meet financing needs before their products reach the market and start producing revenue. They can also help with research and arrange partnerships that can jump-start small companies' manufacturing and marketing futures, he said.

Foreign interest in biotech companies is an important issue for Maryland because the state has about 125 biotechnology companies, most of them relatively small. Maryland business leaders and officials have said repeatedly that the Baltimore-Washington area has the potential to turn its rich research base into a commercial life sciences industry.

However, the industry has developed fitfully, and even foreign investment won't be a panacea, the experts warned.

"No one will access foreign capital if you can get it across the street faster and cheaper," said Mr. Burrill, who is co-author of a yearbook about the biotech industry.

Nonetheless, luring foreign investors can bring both money and exposure to young companies. "Interest [by overseas investors] in the biotech industry has increased geometrically over the last year and a half," said David Webber, a biotech analyst for Alex. Brown & Sons Inc.

Mr. Webber said European investors now buy between 15 percent and 30 percent of most biotechnology stock offerings managed by Alex. Brown, the Baltimore-based securities firm that is the nation's top manager of initial public offerings.

Martin M. Hinoul, technology attache for the Belgian Embassy in Washington, said that Europe offers more than just capital. It also has scientists to help with research and joint ventures, and after the European Common Market is more fully integrated, it will be the developed world's biggest single market.

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