European Biopharma Leaders Call for AI-Driven Innovation to Address Patent Cliff and Funding Challenges
Key Insights
European biopharma stakeholders are urged to leverage AI-driven data analytics to address treatment resistance, drug affordability, and an approaching patent cliff that threatens billions in annual revenues.
The industry faces a harsh funding environment with drastically reduced IPO funding since the COVID-19 pandemic, forcing biotechs to seek alternative financing methods.
Experts recommend collaboration between Europe's innovation strengths and Asia's manufacturing capabilities, utilizing Europe's extensive health databases and technical expertise in cell and gene therapies (search).
European biopharma leaders are calling for urgent adoption of AI-driven innovation to navigate mounting industry challenges, including an impending patent cliff threatening billions in revenue and a severely constrained funding environment for biotechnology companies.
Speaking at the 2025 CPHI conference in Frankfurt, Montserrat Dabban, director of strategic foresight and international relations at Biocat (search), emphasized that European stakeholders must harness the continent's extensive health data through artificial intelligence to maintain competitive advantage against the US and China.
Patent Cliff and Pipeline Challenges
Dabban identified a looming wave of drug patent expiries that poses significant financial risks to the industry. "Pipelines are thinning... pipeline growth slowed," she noted, highlighting how current research trends show a lopsided focus on metabolic, immunological, and oncological diseases (search) while neglecting other therapeutic areas.
This concentration has led to what Dabban termed "therapeutic saturation" — too many molecules developed for too few targets. To address this challenge, she called for coordinated efforts across key domains including aging populations, brain health, cancer (search), antimicrobial resistance (search), health equity, and rare diseases.
Funding Crisis Grips European Biotechs
The funding landscape for European biotechnology companies has deteriorated dramatically since the COVID-19 pandemic. Thomas Kern, managing director at ISP Healthcare (search), reported that average funds raised in initial public offerings per quarter have dropped drastically from pandemic-era highs, despite rising share prices for major pharmaceutical companies.
Martyn Eeles, managing director at Ireland-based Clarma Capital (search), characterized the current climate as marked by investor caution rather than lack of available funds. He noted that native European funding is particularly scarce for Phase II trials, forcing many biotechs to seek support abroad.
AI and Data Analytics as Solutions
Dabban advocated for scaling up utilization of Europe's extensive health databases through AI-powered analytics. She suggested that improved use of data from wearable devices could enable digital phenotyping, enhanced biomarkers, and centralized endpoints in neurological trials.
For oncology research, she recommended exploring adaptive trials and federated analytics that allow data from multiple sources to be analyzed without centralization. However, she cautioned that vast data stores are "useless if it's not processed, and we need technology for that."
Asia-Europe Collaboration Opportunities
Anand Govindaluri, CEO of Singaporean investment company Govin Capital (search), highlighted significant opportunities for collaboration between Asian and European markets. While Asian capital markets remain strong for biopharma, the region focuses primarily on manufacturing innovations rather than clinical assets themselves.
Govindaluri noted that Europe's manufacturing capabilities are relatively rudimentary compared to its dominant position in technical innovation. Backed by experienced researchers and innovative universities, Europe maintains unique advantages in advancing therapeutic modalities such as cell and gene therapies (search) that require specialist technical skills.
Alternative Financing Strategies
To overcome conventional funding challenges, Govindaluri recommended that European biotechs explore alternative financing methods beyond traditional venture capital. He suggested product-specific financing, creative royalty agreements, and public-private partnerships as viable routes for technically innovative developers to access new funding sources.
Regulatory and Manufacturing Initiatives
The European Union has prioritized efforts to boost domestic manufacturing capabilities. The European Council agreed on a proposed EU Pharma Package in June 2025, which includes measures to strengthen the continent's drug manufacturing capacity to address shortages similar to those experienced during the COVID-19 pandemic.
These efforts parallel US President Donald Trump's pharmaceutical import tariffs aimed at encouraging domestic manufacturing. Following negotiations, the US and EU agreed to a 15% tariff on EU pharmaceutical products earlier this year.
"We are at a crossroads. We have to seize the moment for Europe... we have to expect more competition, but also more breakthroughs," Dabban concluded, emphasizing the critical nature of the current moment for European biopharma innovation.