Ahead of the upcoming EU Biotech Act, recent studies and reports analyse funding realities for biotechnology to inform future life-science policy.
Recognising the importance of advancing knowledge and innovation across the life sciences to strengthen Europe’s competitiveness and contribute to citizens’ health and wellbeing, the European Commission (EC) has announced the adoption of the EU Biotech Act II for late 2026, focusing on industrial biotechnology and biomanufacturing. This follows the proposal of a first Biotech Act in December 2025, which amends several existing EU legislations in the health domain. Against this background, recent publications have focused on the importance of targeted support for the biotechnology sector, analysing the strengths and challenges of the status quo to inform on recommendations for the upcoming legislation.
In an in-depth report, the EC examines the contribution of ERC-funded frontier research on biotechnology. Based on a survey sent to all ERC grantees working on biotechnology research, of which 388 responded (19.6% response rate), the report tracks key metrics to characterise the innovation potential and valorisation pathways of these projects. Results show that grantees are actively taking steps to translate their research, including through patents, spin-off companies and follow-on funding.
While advancement of knowledge was cited by 86.1% as the expected output of their frontier research project, more than 76% also plan to commercialise their results within five years. Against this background, the analysis highlights that ERC grantees have launched at least 72 biotechnology spin-off or start-up companies building on their research, and 211 researchers have filed one or more patent applications. Switzerland plays a prominent role in this ecosystem, hosting 6 of the 72 spin-offs and 14 host institutions involved in patent-filings. Notably, respondents considered the high degree of flexibility in ERC funding as the primary factor supporting the innovation potential of research results, closely followed by the novelty of their research.
However, despite this scientific excellence, financing the bridge from fundamental discovery to commercial application constitutes the single greatest bottleneck for European biotech innovators, with over half of surveyed ERC grantees citing a lack of follow-up funding as their main hurdle. To navigate this “valley of death”, respondents called for continuous, strategic support across the entire biotech pipeline, highlighting the vital role of ERC Proof of Concept (PoC) and EIC funding instruments. Building on this, the report suggests several key actions, including expanding early-stage, seed and scale-up financing; increasing the budget, duration and flexibility of PoC grants; and streamlining transitions between ERC and EIC funding schemes.
The implications of the funding realities for scaling breakthrough research are also emphasised in a recent report by the Centre for Future Generations (CFG). Strategic sector, generic funding highlights a core structural paradox: while the EU considers biotech a critical strategic sector, its funding instruments treat biotech like deep tech, expecting fast market cycles and modest physical overhead. However, as biotech functions much more like “hard tech” – marked by heavy capital investments, long regulatory timelines and physical scale-up needs – one-size-fits-all grants fail to support firms through their true development lifecycle, with funding running out long before firms complete their commercial development. Looking ahead to 2030, respondents to the ERC survey identified seamless access to large biological datasets and AI integration as key drivers of competitive advantage, calling for coherent governance frameworks and interoperable data infrastructures. The CFG report expands on this need, proposing that the EU builds shared, publicly funded infrastructure across three pillars: physical scale-up facilities, a federated data layer, and specialised training institutions. Furthermore, CFG calls for funding schemes that support every stage of the biotech development chain, from basic discovery to data and production, rather than treating each layer in isolation. Alongside embedding such a “bio-stack” logic, the CFG also advocates for directing a larger share of public investment toward independent SMEs, where grants most demonstrably convert into lasting revenue growth. Aligning these insights from both reports offers a timely blueprint for the upcoming EU Biotech Act and future framework programmes: by moving away from generic “deep tech” models toward life-science-tailored instruments, policymakers can bridge strategic ambition with actual funding design, successfully scaling world-class European discoveries – including those nurtured in associated partner ecosystems like Switzerland – into market-leading innovations.