EU Launches Strategic Bid to Attract R&D and Investments in Biotech

By Josefine Sommer and Robert Darwin

For more than two decades, the EU has pledged numerous initiatives aimed at creating regulatory environments to foster both innovation and investment in the EU’s biotech sector, a sector which broadly encompasses medical, agri-food/feed, marine, and industrial and environmental biotechnologies.

Based on the current geopolitical needs and political priorities, the EU’s biotech industry and its investors are watching for long-awaited and fast-evolving initiatives to support such growth. A key pillar is poised to include a new legislative proposal in 2026 aimed at making the regulatory environment more agile, faster, and smoother for biotech innovations in the EU, in the form of an EU Biotech Act. Forming an overarching vision for making the EU a more hospitable place for the biotech industry and investors, the Act would be supported by numerous other initiatives, including a life sciences strategy and a revised bioeconomy strategy. The ultimate success of a Biotech Act will, however, depend on the EU legislators’ ability to adopt rules bring procedural simplification, and the ability to avoid overlapping or contradictory rules with existing (and the many pending) EU laws regulating the biotech industry.

In this article, we examine key components of the EU’s biotech strategy and consider the investment climate and related initiatives.

The European Life Sciences Strategy

In the Commission’s political guidelines for 2024‒2029, references are made to a ‘Strategy for European Life Sciences,’ whose goal is to drive the EU’s economic growth, resilience, and security to support a green and digital transition and to develop high-value technologies. With the aim to gather evidence on the key challenges and opportunities to speed up development, deployment, and uptake of life sciences-based innovations, the Commission recently collected evidence for an upcoming Strategy for European Life Sciences. The strategy is expected to focus in particular on industrial needs to strengthen the EU’s competitiveness and leadership.

Another opportunity for industry to seek input may be through the Commission’s published and announced Omnibus packages, which aim to simplify, streamline, and reduce administrative burdens.

A Revised Bioeconomy Strategy

The EU’s Bioeconomy Strategy dates back to 2012. Its aim is to, inter alia, ensure food security, manage natural resources sustainably, and limit and adapt to climate change. In its 2025 “Competitiveness Compass,” the Commission indicated its plan to review this strategy in order to address current challenges. The revisions are expected to reinforce the industrial dimension of the strategy while strengthening its links to biotechnology and biomanufacturing, with the aim of contributing to a stronger EU economy. A call for evidence is open until 23 June 2025.

A key focus area will be to tackle current challenges in the EU’s biotechnology and biomanufacturing investment and venture capital ecosystem, including fragmentation, high energy prices, and scale up challenges for startups and other small and midsize enterprises.

A Proposed EU Biotech Act

The idea of a Biotech Act was raised in the Commission’s “Boosting Biotechnology and Biomanufacturing in the EU” in March 2024 and again in President von der Leyen’s political guidelines in July 2024. The draft Biotech Act is (currently) expected to materialise in 2026. The current intention is to provide a simplified regulatory framework and faster market access for certain product categories — including clarity for products or technologies that do not easily fit an existing category — and to foster innovation by improving clarity and predictability. The Commission has stated that its proposal will not address areas already covered by other EU acts, including the ongoing negotiations for the EU Pharmaceutical Legislation. The European Parliament and European biotech industries are already drawing up their visions on the Act.

According to the Commission, EU’s biotech and biomanufacturing sector is currently inhibited by several challenges to which several solutions are possible:

• Regulatory complexity and IP: Regulatory red tape at the EU and Member State level can make it difficult to enter the market. A connected issue is that the EU lags behind the United States in biotech patenting. The Commission intends to look at reducing regulatory fragmentation and simplifying processes, potentially through the proposed EU Biotech Act.
• Research and technology transfer: The EU boosts strong and leading life sciences research, but results are often not transferred into marketable products. The Commission proposes to improve technology transfer processes and foster innovation ecosystems with a focus on integrating AI and Big Data. Such integration could, for example, address how AI can speed up the offering of alternatives to traditional animal testing.
• Access to finance: The EU lacks sufficiently large-scale venture capital for the number of eligible companies. According to the Commission, it plans to include biotech in investment programmes and to support the creation of additional and larger, pan-European venture capital funds.

Seeking further input for the upcoming Biotech Act, the Commission has a call for evidence for an impact assessment open until June 11, 2025 and recently closed a consultation via a cross-sectorial stakeholder questionnaire on the regulatory framework for biotechnology and biomanufacturing in the EU.

How EU Action Might Boost Investment Opportunities

There is currently a great deal of interest in investing in European biotech and opportunities to do so. Within the EU, a 2025 study commission by EuropaBio found that in 2022, gross value added (GVA) from biotech activities was €38.1 billion, and biotech is one of the most economically productive industries, generating €160,000 GVA per person employed. It also found that the economic value of healthcare biotech exports rose significantly in 2021 and 2022, an increase of 35% from 2020.

The EU’s biotech initiatives include measures to boost funding for the biotech sector and to support academic spinoffs, startups, and other stakeholders in the EU life sciences ecosystem. The aims include addressing the problems of the EU lagging behind the United States in biotech patenting, risks related to technology security and misuse, skills shortages in digital technologies and life sciences, and a lack in the EU of large-scale venture capital. An EU Biotech Act would also need to address the EU’s gap in translating its world-leading life sciences research into marketable products.

To tackle these challenges, the Commission has proposed to improve technology transfer processes and foster innovation ecosystems, assess the feasibility of bio-based content requirements to better position bio-manufactured products, advocate for the inclusion of biotech in investment programmes, and establish international partnerships in biotechnology to enhance research collaboration and market access.

Additional Biotech Initiatives In Europe

A number of additional initiatives also will inform the development of Europe’s biotech landscape. Non-legislative initiatives include the Clean Industrial Deal, the EU Startup and Scaleup Strategy, and its Single Market Strategy. Legislative developments include the proposal for a Critical Medicines Act and future proposals for a Circular Economy Act and a European Innovation Act. In addition, the following initiatives are particularly likely to be impactful:

• Commission work programme 2025. The Commission’s 2025 work programme sets out a number of schemes that have the potential to support biotech innovation. These include an EU startup and scaleup strategy, omnibus packages, and continued work to amend the EU’s GMO legislation.
• The Accelerating Clinical Trials in the European Union (ACT EU) initiative. This initiative contains the Commission’s plans to conduct a study on the Clinical Trials Regulation, with the aim of assessing whether simplifications in clinical trial assessments are necessary, including for biopharmaceuticals and advanced therapy medicinal products (ATMPs). Internationally, the Commission also will seek to develop “biotech and biomanufacturing partnerships” with key partners such as the United States, India, Japan, and South Korea, with a view to strengthening scientific collaboration and cooperation on regulatory issues.
• Biotech and biomanufacturing hub. In January 2025, the Commission launched the Biotech and Biomanufacturing Hub, an operational tool to help small and midsize enterprises (SMEs) and startups navigate EU regulations and support mechanisms. The new hub provides tools to find additional support in regulated areas (including medicinal products, therapies and medical devices, food and feed, as well as consumer products), IP, scaling-up support, as well as finance and funding support. The goal is to help businesses bring biotech solutions to the EU market.

All these initiatives need to be considered against a wider economic and technological landscape in which biotech and biomanufacturing companies are considering leveraging AI to streamline research, reduce costs, and improve the efficiency of clinical trials. Stakeholders are watching for actions to remove current barriers to using AI and machine learning in drug discovery and development processes to be made more agile and flexible. These initiatives include implementing the European Medicines Agency’s recommended risk-based approach relating to the use of AI in the drug life cycle and revising the existing legislation applicable to clinical trials with ATMPs consisting of or containing GMOs in order to provide for full, or more extensive, exemptions to help facilitate access for new ATMPs.

About The Authors:

Josefine Sommer is a partner in Sidley’s Global Life Sciences practice based in Brussels. She assists clients in regulatory, compliance, and enforcement matters. She counsels medical device, pharmaceutical, and biotech companies on EU regulatory compliance, including in clinical trials, authorizations, and regulatory authority interactions. She additionally advises clients on EU environmental law, including chemicals legislation impacting medical devices, pharma, and biotech, as well as consumer products. Sommer handles GMP and quality management system (QMS) matters and also represents companies in regulatory enforcement actions.

Robert Darwin is a partner in Sidley’s London office. Robert has a broad international practice focused on private equity, growth capital, M&A, and complex licensing and collaborations. He advises clients across a wide range of industries and is particularly known for his work with global life sciences, healthcare and technology corporations, and investors.