ESMT Report Identified Structural Biotech Failures
A new study outlines urgent reform needs to prevent European biotechnology talent and capital flight to the US.
Updated on Oct. 6, 2026 in Biotech
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ESMT Berlin published a report detailing systemic barriers hindering innovation and growth in the European biotechnology sector. Experts warn that the current lack of late-stage funding and efficient technology transfer risks driving companies to the United States.
Why it matters
The European biotech industry currently faces structural disadvantages that threaten its long-term strategic sovereignty. Without implementing significant reforms, the sector risks losing crucial capital, top talent, and its most promising startup companies.
The report highlights that only 17% of surveyed experts have a positive view of technology transfer offices. Additionally, 70% of industry experts describe the current situation as urgent, while six of eight interviewed founders expressed intent to move operations to the US.
The players
ESMT Berlin
This is a European business school based in Germany that produces research on management and economic policy.
The details
The report identifies persistent valleys of death that prevent companies from scaling and successfully navigating technology transfer processes. To address these gaps, researchers proposed 26 distinct reforms aimed at stabilizing the sector and improving late-stage capital availability.
Timeline
Q1 2025 served as the baseline for the early-stage financing comparison.
US early-stage biotech financing declined 38 percent between Q1 2025 and Q1 2026.
October 6, 2026, marks the publication date of the new ESMT report.
The Tech Race
This research follows a pattern set by ESMT Berlin's 2025 deep-tech innovation hubs report. It positions the current biotech crisis as a direct consequence of structural gaps that prevent European firms from competing with American rivals.
Readers in the biotechnology field may face shifting investment landscapes as firms consider moving operations abroad to secure capital. These structural changes could influence the availability of early-stage funding and future collaboration opportunities for European innovators.
The takeaway
The European biotech sector is at a critical juncture requiring rapid structural adjustment to retain its competitive edge. Policymakers and industry leaders must address the identified capital and transfer inefficiencies to prevent a further exodus of talent to the United States.
Further reading
For more information on current industry trends, visit the Biotech section.
More information
Access the full ESMT biotech report download to review the proposed reforms.
Source note: This article includes information reported by Informationdienst Wissenschaft e.V. - idw.
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Is Europe making enough progress to keep its innovative biotech companies from moving abroad?
