Biotechnology companies live and die by their ability to innovate. According to some estimates, two thirds of drugs approved last year were originally discovered in these small companies. However, in contrast to the US market, financing remains tight in Europe, and large-cap pharmaceuticals players, typically the natural buyers of such companies, are proving more selective. As a result, innovation in the funding and development of small biotechs is now in focus.

Kate Bingham, managing partner at venture capital firm SV Life Sciences Advisers, said the amount of money being invested in European-focused biotechnology venture-capital funds has been steadily decreasing over the past few years.