Healthcare start-ups in France: 3 factors of attractiveness for pharmaceutical affiliates

A dynamic HealthTech environment based on scientific excellence

France has an already dense and dynamic network of healthcare start-ups. Indeed, more than 60 biotech companies are created each year in the country. In 2017, France Biotech estimated that the HealthTech sector could generate a global turnover of more than 40 billion euros by 2030 in France.

This development is based firstly on flagship initiatives such as the French Tech 120, which supports and funds 120 start-ups, most of them are in the healthcare sector, with 22 representatives from the HealthTech sector in 2021. Station F, located in the center of Paris, is also a key player: it is one of the largest start-up campuses in the world, currently hosting over 1,000 entrepreneurial projects.

Nominated for the second year in a row, as a French Tech 120 company, TISSIUM, which is developing a platform of biomorphic and programmable surgical polymers, will benefit from the support of various public services and state agencies. They will use the €38.75 million of its series B funding collected in November 2019 to support its global expansion.

Furthermore, these start-ups and biotech companies remain very close to high-level academic centers. Indeed, 52% of HealthTech companies are the result of public or academic research. Thus, 78% of entrepreneurs are doctors, researchers or scientists . For instance, Eligo Bioscience, a start-up that develops phage to “reprogram” the microbiome. It was created after conducting scientific research at the MIT and then incubated at the Pasteur Institute. Now incubated in the Paris Biotech Santé innovation cluster at the Cochin Hospital, this start-up highlights the close relationship between entrepreneurship and scientific expertise.

This flourishing ecosystem also benefits from large-scale international events to promote the French sector and encourage private investments, such as the VivaTech forum, or the HealthTech innovation Days, which in 2019 gathered 88 French HealthTech companies, 42 international investment funds and 12 pharmaceutical companies.

France, a flagship in digital and AI for health

France has been hyperactive in the field of artificial intelligence for several years now, and the healthcare sector is one of the its’ priorities. As part of the “AI for Humanity” program to rethink the national strategy on artificial intelligence, 4 interdisciplinary institutes specialized in AI have flourished through the “3IA” label in 2019. They have been granted with a total of 100M€ for 4 years, highlighting the current political commitment to raise significant funding. Projects developing new patient services based on AI are to come.

Thanks to 10 billion euros in funding, innovation and industry will have to tackle, through calls for projects, to a major challenge: “How to improve medical diagnostics through artificial intelligence? “. In partnership with the Health Data Hub, a call for projects was launched at the end of 2019, based on the collection of health data and support for research and development.

Thus, many start-ups are thriving, particularly in the e-health sector (applications, websites, software, chatbots, etc.), AI and health data. Some of them aim to accelerate research. For example, Aqemia, a spin-off from the ENS (French National School of Science for research) and the CNRS (French National Centre for Scientific Research), is developing an AI platform to discover new therapeutic molecules. Others offer digital solutions to improve patient care, such as Medadom for teleconsultation and Hoppen to digitalize the daily lives of hospital staff with connected rooms or ambulatory care to fluidify patient flow management in real time.

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Already positioned industrial players

Open innovation initiatives are flourishing to develop relationships between pharma companies, already well established in this dynamic ecosystem, and start-ups, via calls for projects, hackathons, conferences, endowments and partnerships. With an even stronger level of involvement, there are comprehensive support programs for the development of these start-ups.

For example, the “Plan PME et Start-up”, supported by Sanofi’s French subsidiary and managed by the global human resources department, supports the business and international development of French start-ups. The latter are current or potential suppliers of the company. Other initiatives aim to accelerate the development of digital health solutions, such as the AI Factory for Health program launched by the French subsidiaries of Microsoft and Astra Zeneca. This program is focused on start-ups specialized in AI for health and provide them trainings for three months to acquire expertise in the health industry while enabling the company to identify high-potential start-ups for potential future partnerships or investments.

As a result, the French subsidiaries of pharmaceutical companies are becoming increasingly involved in supporting the activities of their international headquarters, with the aim of capturing new opportunities around innovative therapies. They can thus capitalize on their proximity with this dynamic ecosystem of start-ups to conduct activities for business development purposes.

Although France’s attractiveness in terms of healthcare start-ups is a real opportunity for healthcare players, it is also a competitive environment where more and more pharma companies are working with these potential disruptive startups. Healthcare innovations evolve in a fertile ecosystem, therefore it is essential for healthcare players to define a differentiating strategy to attract them and capture these opportunities.

About the authors,
Lambert, Senior Project Manager and Tak-Wai, Consultant in Alcimed’s Healthcare team in France