Ep196: Otello Stampacchia on Europe's Biotech Crisis

What It Covers

Otello Stampacchia, founder of Omega Funds, outlines the structural and financial barriers holding back European biotech, where companies receive only 7% of global venture capital versus 63% for the US, and describes the European Life Sciences Coalition's advocacy strategy to mobilize capital, harmonize public markets, and accelerate clinical trial frameworks across the continent.

Key Questions Answered

• •Capital allocation gap: European pension funds invest approximately 0.02% of assets into venture capital versus 2% for US pension funds — a 100x difference driven by narrative and perception, not actual risk-adjusted returns. The European Life Sciences Coalition is compiling performance data to reframe biotech venture as comparable to buyout funds, targeting institutional investors who currently default to real estate and fixed income.
• •Public market fragmentation: 66 of 67 European biotech companies that listed on a stock exchange over the past six years chose a non-EU exchange, predominantly NASDAQ. Europe's fragmented public markets — AIM, NASDAQ OMX Nordics, Euronext, Swiss SIX — lack the liquidity and regulatory consistency that attract global investors. Addressing this structural failure is a primary coalition objective alongside private capital mobilization.
• •Clinical trial speed disadvantage: European clinical trial startup timelines run significantly longer than competitors. Australia and China demonstrate that rigorous trials can launch within two months rather than six. Stampacchia advises portfolio companies to conduct early-phase trials in Australia specifically for speed, and the coalition is engaging the European Medicines Agency directly to reduce bottlenecks without compromising scientific standards.
• •Geopolitical squeeze on European pharma: Major European pharmaceutical companies including Novartis, Roche, AstraZeneca, and GSK are redirecting incremental research and manufacturing investment to the US under tariff pressure, while simultaneously expanding in China. This creates a zero-sum dynamic where European R&D infrastructure loses capital from both directions simultaneously, accelerating the erosion of the continent's innovative capacity.
• •MFN pricing creates access risk: The US Most Favored Nation executive order targets drug pricing benchmarked against G7 countries plus Switzerland and Denmark. Stampacchia argues this shifts the European problem from pricing to access — pharmaceutical companies will pressure European markets to match higher US prices or withdraw products entirely, converting a cost debate into a patient access crisis that policymakers have not yet fully anticipated.
• •Manufacturing certification bottleneck: European regulatory agencies currently require two to three years to certify new manufacturing plants after construction. This timeline structurally disincentivizes venture investment in European biomanufacturing capacity. Stampacchia raised this directly with European Commission members in February 2025, noting that senior officials were unaware of the barrier — suggesting the coalition's market-actor perspective fills a genuine policy intelligence gap.