In a first for the drug industry, the EU’s European Investment Bank (EIB) has agreed to provide €75m in funding for R&D projects at Belgian pharma company UCB.
The EU’s primary financing institution will provide money for various UCB pipeline projects in return for milestone payments if the drug candidates progress through development. The agreement is truly risk-sharing, with the EIB standing to lose money if the projects it backs are unsuccessful.
UCB’s chief executive Roch Doliveux welcomed the innovative financing deal, saying it would “accelerate the development of several promising projects in UCB’s pipeline”.
EIB vice president Pim van Ballekom said the deal – which is the first to be signed under the terms of the recently-launched InnovFin funding initiative set up by the European Commission and the bank – showcased “the direct intervention and risk-taking capacity of the EIB and its role in supporting key R&D activities”.
Access to funding has long been considered a weakness for the EU compared to other areas of the world, and European Research, Innovation and Science Commissioner Máire Geoghegan-Quinn has been pushing a series of initiatives to meet an EU target of investing 3 per cent of GDP in R&D by 2020.
InnovFin (EU finance for Innovators) was officially launched earlier this month with a warchest of €24bn to support research and innovation in European companies over the next seven years. In addition to direct financial support, InnovFin will also provide advisory services to companies.
The funding vehicle grew out of an early risk-sharing finance facility developed under the seventh EU framework programme for research and technological development (FP7), which provided around €11.4bn to research-based companies.
InnovFin is designed to help the EU meet its objectives under the €80bn Horizon 2020 programme, which laid out research priorities for the region between 2014 and 2020 and endeavoured to do away with the red tape that limited access to funding.
“Europe today needs sustainable economic growth to maintain living standards, secure welfare and jobs,” commented EIB vice president Philippe de Fontaine Vive at the time InnovFin was first announced.
“Investment in innovation is key to this end. We need to ensure that a limited EU budget is used to maximum effect,” he added.