The EU’s forthcoming Biotech Act could transform the sector, simplifying rules and boosting funding. Early signals suggest SMEs will benefit, with a fairer path to market and this will strengthen Europe’s biotech edge. Learn how in this blog post.

Why the act matters

Europe’s biotech landscape is hampered by two major issues: regulatory fragmentation and limited early-stage financing. While the European Medicines Agency handles centralised approvals, national authorities retain control over pricing, reimbursement and market access. This fragmentation increases costs and prolongs timelines. While it is difficult to put precise figures on it, analyses suggest that European biotech start-ups capture only about 30 % of regional venture capital for early clinical trials, compared to more than 55 % in the United States. This leaves European biotech start-ups struggling to fund development.

The Biotech Act aims to tackle both problems. According to Commission documents, the act’s goal is to streamline regulations and speed the journey from lab discoveries to market. Industry groups want harmonised rules for multi-country clinical trials, parallel review processes and less bureaucratic redundancy. Simplifying national and EU-level requirements could help small companies navigate approvals more efficiently.

Another target is easier access to finance. Associations such as EFPIA call for public–private partnerships and policies that attract pension funds and venture investors. The act may introduce a guided pathway for patenting biotech inventions to help SMEs secure robust intellectual property rights and convince investors that their innovations are protected.

Timing and scope

Initially scheduled for release in 2025, the Biotech Act is now expected in two parts: a health-focused draft on clinical trials by December 2025 and a broader suite covering industrial biotechnology in late 2026. The staggered rollout follows detailed regulatory studies ordered by the Commission. However, Member States remain divided on the scope. Some are advocating for a holistic act that spans healthcare, agrifood and industrial applications, while others prefer a narrower focus on pharmaceuticals.

A glimpse into the future: the EU Biotech Hub

Launched in January 2025, the EU Biotech Hub serves as a one-stop portal for SMEs, guiding them through regulation, funding and intellectual property. It offers practical support on finding research infrastructure and complying with EU requirements. This tool hints at what the Biotech Act hopes to achieve: a streamlined, transparent environment for biotech innovation.

What can SMEs expect?

Whilst draft legislation is not yet available, Commission officials have indicated specific features of the Biotech Act that could deliver benefits. These include:

• Quicker, cheaper approvals: Harmonised trial rules and fewer duplicative procedures would cut delays and reduce costs.
• More funding: Stronger IP protection and simplified regulatory pathways could encourage venture capital and public-private collaboration, helping to close Europe’s funding gap.
• Cross-sector growth: A second phase covering industrial biotech could unlock opportunities beyond healthcare, from biomanufacturing to agricultural and environmental applications.

Looking ahead

Gunnar Sachs further reflected that the Biotech Act could improve the clinical trials framework in the EU by encouraging the use of digital tools and decentralized trial models to further enhance the structure of clinical trials.

Key questions persist for commentators. Firstly, how will the Biotech Act integrate with other major reforms such as the Critical Medicines Act or the overhaul of EU pharmaceutical legislation? Further, can policymakers strike a balance between rapid approvals and patient safety? And finally, will Member States agree on a comprehensive scope or limit the act to healthcare?

We will be tracking developments in this space with interest. As the act takes shape, firms should participate in consultations, leverage existing resources like the EU Biotech Hub, and prepare regulatory and funding strategies accordingly. With coherent rules and improved financing, the EU Biotech Act could finally enable European SMEs to thrive on a global stage.