Europe’s Biotech Grants: A Lifeline or a Leash?

Europe’s biotech sector has always been fond of government grants. Programs like Horizon Europe, with its eye-watering €95.5 billion budget for research and innovation from 2021 to 2027, have kept the pipettes full and the lab coats spotless. National initiatives in Germany and France add to the mix, ensuring a steady stream of funding for ambitious projects. Yet, for all this largesse, one can’t help but wonder if Europe’s labs are growing a little too comfortable.

The problem isn’t the money itself—scientists would happily accept it in unmarked bills if necessary. It’s that the money rarely comes with the right kind of strings attached. Grants lack the hard-nosed accountability of private investment. They create a cozy cushion where risk-taking is optional, commercialization is frowned upon, and innovation is often more paper than product. As a result, Europe produces brilliant ideas but struggles to turn them into world-changing therapies.

Comfortably Numb

Grants are a biotech dream come true. They shield startups from the turbulence of private capital markets, where fortunes rise and fall faster than a PhD’s caffeine supply. But this safety can turn into sedation. Too many grant recipients become experts in writing funding applications rather than groundbreaking research.

Oxford University Innovation recently sounded the alarm on the “valley of death” faced by European spinouts. Public money gets them through their infancy, but without private capital to take over, many promising ideas wither before they can take their first steps. It’s not unlike watching a baby bird fall from its nest while the parent bird argues over worms.

The Zombie Apocalypse

Lurking in Europe’s biotech landscape are the so-called “zombie companies.” These firms are the walking dead of the funding world—alive thanks to grants, but only just. They shuffle along, consuming resources while achieving little, a bit like the ghost of a project that just won’t admit it’s over.

An analysis found that some 15% of EU-funded biotech firms hadn’t advanced their pipelines in over three years. Take the Dutch microbiome company that secured €7 million in grants, only to produce excuses instead of results. Investors fled faster than a student from an early-morning lecture, leaving the company shambling on with no clear direction.

Risk? What Risk?

Government grants are risk-averse by design. They reward safe, incremental progress over bold leaps of faith—the kind that lead to Nobel Prizes or blockbuster drugs. In biotech, where moonshots are often the norm, this cautiousness feels like trying to win the Tour de France on a tricycle.

Take Europe’s approach to funding gene-editing research. While many projects move forward cautiously under public grant frameworks, their U.S. counterparts leap ahead, buoyed by venture capitalists with a taste for risk. CRISPR-based therapies, now dominating global headlines, illustrate how risk tolerance drives transformative breakthroughs. Europe’s slower approach risks leaving it watching from the sidelines.

The Technology Transfer Tango

University Technology Transfer Offices (TTOs) are meant to help researchers bring their ideas to market. In practice, they’re often more like toll collectors—demanding hefty fees, slowing the process, and ensuring that innovation crawls rather than sprints.

Reforms in the UK are showing signs of progress. An independent review found that high TTO equity stakes discouraged private investors. In response, many universities are now reducing their demands, typically lowering stakes from 25–30% to 10–15%. The shift aims to make spinouts more attractive to investors and improve their chances of success. However, similar reforms across Europe remain inconsistent.

The Elephant in the Lab

All this begs the question: what exactly does Europe want from its biotech sector? If the goal is to create an endless loop of grant applications, then it’s mission accomplished. But if the aim is to produce world-class therapies, then something has to change.

The truth is, Europe’s grants are both lifeline and leash. They keep the sector alive but tether it to a culture of caution and bureaucracy. Unless Europe can learn to embrace risk and reward, it might one day find its labs full of brilliant ideas that never see the light of day—more museum than market.