Why the EU might be Trump’s toughest sell for biotech

On the heels of two trade “wins” for the administration, the United States and European Union are reigniting trade negotiations—but the administration says no deal unless the EU addresses the agriculture imbalance and regulatory barriers based on "sound science," reports Reuters.

Where things stand: The U.S. and EU have been “locked in a tit-for-tat tariff dispute,” says Reuters, covering everything from steel to wine and spirits to denim. Now, Trump’s threatening tariffs on cars, too.

A breakthrough: Following a meeting between Trump and EU Commissioner Ursula von der Leyen in Davos, the EU agreed to budge a bit on shellfish regulations as well as import more American soybeans and liquified oil, reported Bloomberg. 

But oysters aren’t enough: While visiting Europe, U.S. Ag Secretary Sonny Perdue noted the $10-12 billion imbalance in agriculture trade, saying while the parties could address tariffs later, the EU must address regulatory barriers on more than just shellfish ASAP. 

What they’re saying: “The European public needs to understand that their producers are going to be at a huge disadvantage...if they choose to be a technology-free zone,” said Secretary Perdue. 

The big picture: Agriculture and biotechnology regulations have been a sticking point in pretty much every trade deal—and they’re especially important in China, which has onerous regulations on biotech, biopharma, and genetically modified organisms and opaque approval processes, which delay the sale of these products and stifle innovation. As we look ahead to implementing the China deal and negotiating new deals with the EU and the UK, to name a few, it’s critically important we continue to press for science and innovation. But given the EU’s regulations and averseness to genetically modified food, this could be a tough sell.  

The bottom line: Unnecessary regulations like those on GM food in Europe, as well as the long approval timelines in China, harm biotech’s ability to create innovations to help feed the world, develop new cures, and reduce carbon emissions. BIO continues to work to combat misinformation and ensure biotech remains a priority in trade talks, so we can fully realize the benefits of biotech innovation globally.

Dig in:

• Bloomberg: Trade won’t fade as a big disruptor in 2020
• Agri-Pulse: China agrees to $40-50 billion in annual ag purchases for two years
• Agri-Pulse: China makes big push for biotech
• Reuters: U.S. pushing India to buy $5-6 billion more farm goods to seal trade deal

More Agriculture & Environment News: 

BIO: Stopping Outbreaks Through One Health: Making Tomorrow's Breakthroughs Possible
“The spread of a deadly new virus in China is just the latest outbreak that highlights the interconnectedness of humans, animals, and the environment—and underscores why the entire biotechnology sector needs to work with partners across the industry to solve humanity’s and the planet’s biggest challenges.”

Small and emerging biotech companies at the forefront of new cures have difficulty accessing capital through the duration of the arduous and expensive R&D phase. In this 20-minute Bloomberg Law podcast, corporate and securities law expert J.W. Verret explains why, and provides ideas on how to make it easier for biotechs to get the capital they need to develop new cures.

The big question: “How do they get the funding they need in what can be a competitive and highly regulated market?” ask the hosts.

But, first, the context on biotech R&D:Verret, an investment adviser to the Securities & Exchange Commission (SEC), outlines the early-stage biotech development timeline, explaining it can take 10-15 years or longer to go from development to testing to approval—with biotech companies spending all of their cash on research and development without generating any revenue.

Two things make biotechnology investment different: It’s “more risky and uncertain and contingent on non-financial information,” like scientific research, he says, and second, biotechs can’t rely on customer growth to generate investment interest, because they can’t have customers until they get approval, and potential customers may not know cures are being developed. 

So, what’s the solution? Verret has a variety of proposals to make it easier for biotech companies to access public and exempt markets.

Why it matters: Biotech investment is extremely high risk, with a long, bumpy road to approval—but extremely high reward, too, because the end result is saving lives. BIO’s working with Verret and others to eliminate roadblocks to capital and reduce regulatory costs and help emerging biotechs, as well as investors and patients, thrive. 

Read more:
BIO Issue Brief: Capital Markets & Financial Services

More Health Care News: 

The New York Times: Researchers are racing to make a coronavirus vaccine. Will it help?
“[E]ven as new technology, advancements in genomics and improved global coordination have allowed researchers to move at unprecedented speed, vaccine development remains an expensive and risky process. It takes months and even years because the vaccines must undergo extensive testing in animals and humans. In the best case, it takes at least a year—and most likely longer—for any vaccine to become available to the public.”