SPANISH BIOTECH INVESTMENT GROWS, DESPITE MARKET'S PROBLEMS

Amid low prices and generics-friendly government reimbursement policy, investment in Spanish biotech continues. The sector can be assumed to be one way to offset the domestic market's currently hostile conditions for research-based firms.

In an example of the measure of confidence in the industry, leading local group Zeltia has already pledged EUR189mn (US$235mn) worth of fresh investment in its two biotech subsidiaries, PharmaMar and Neuropharma, by 2007. Pharmamar hopes to complete development of its Yondelis cancer drug next year.

Nevertheless, biotech groups argue that the government could be doing more to foster the sector's development. Trade association Asebio recently called for a package of favourable measures, including improvements to the legal framework, tax breaks and a new biotech-only investment exchange. Although government involvement in biotech is growing, Spain's R&D spending as a proportion of GDP is still well below the European Union (EU) average of 1.9%, at just 1.1%.