By Gerardo Fortuna
Stefan Oelrich, president of Bayer鈥檚 pharmaceutical division and newly appointed head of the EU鈥檚 pharmaceutical lobby EFPIA, pointed out the urgent need for capital market reform to support biotech development in Europe.鈥淲e need the equivalent of a Nasdaq in Europe where we can raise capital for biotech. Because biotech is not just about government finance,鈥 Oelrich said during a press conference last week.Launched in 1971, the Nasdaq (originally the National Association of Securities Dealers Automated Quotations) was the world鈥檚 first electronic stock market.Known for its fully electronic trading model, the exchange has historically been attractive to fast-growing sectors, including life science, listing some of the world鈥檚 largest tech companies, including Apple, Microsoft, and Google.Oelrich argued that Europe must urgently develop a similar equity-driven financing ecosystem.鈥淭oday, there is very limited venture capital available, which is largely due to the way we manage equities. We invest our equities not in venture, but elsewhere,鈥 he said.According to him, the lack of early-stage capital means European biotech innovations often migrate elsewhere 鈥 especially to the US, where funding and commercialisation opportunities are more robust.鈥淭he transition from basic research to patented applications tends to follow where the capital is. We must ensure that innovation generated in European universities and research institutions stays in Europe,鈥 he warned.’Why don鈥檛 we do it?’His remarks came just ahead of the unveiling of the EU鈥檚 long-awaited Life Sciences Strategy, which aims to revive Europe’s position as a hub for biotech research and development.The strategy acknowledges that the gap in venture capital investment is widening in Europe. It points to the continent鈥檚 fragmented capital markets and heavy reliance on bank loans, which are often limited in volume and duration, as major structural issues.The strategy also recommends strengthening innovation hubs and integrating them into value chains to better attract private investment.However, it does not place significant emphasis on completing the EU鈥檚 Capital Markets Union (CMU), a key demand from Oelrich.鈥淭his may sound ambitious, but it鈥檚 absolutely doable. Interestingly, everyone I talk to recognises the need: So why aren鈥檛 we acting on it?鈥 Oelrich asked.He also suggested that part of Europe’s pension and life insurance capital could be redirected toward venture investment if appropriate political frameworks were put in place.鈥淚nventions can find a market here as it鈥檚 not only about a lack of capital in Europe: It鈥檚 about how we allocate it. We need to do a better job,鈥 he concluded.The broader contextThe EU鈥檚 Capital Markets Union remains incomplete, with progress hindered by regulatory divergence, inconsistent enforcement, and political resistance to deeper integration.While the CMU does not directly aim to create new stock exchanges, it does support efforts to expand access to capital, particularly for small and medium-sized enterprises (SMEs).This improved access could encourage the development of specialised or regional exchanges, though the broader goal remains integration rather than fragmentation.Currently, Europe lacks sector-specific stock exchanges. Major platforms like Euronext, the London Stock Exchange, Deutsche B枚rse, Nasdaq Nordic, and SIX Swiss Exchange list companies across a wide range of industries.Instead of dedicated exchanges, sector-focused investment is facilitated through indices such as the STOXX Europe 600 family, which tracks sectors like banking, automotive, and leisure.Still, for many in the biotech sector, the absence of a specialised capital-raising platform remains a barrier. Whether the EU will 鈥 and can 鈥 move to address this remains to be seen.