While Europe’s scientists lead the world in biomedical research, its investors, regulators, and manufacturers certainly do not. The Biotech Act is the Commission’s attempt to fix all three at once.
A promise kept
When Ursula von der Leyen laid out her Political Guidelines for the 2024-2029 Commission back in July 2024, she made a rather precise and specific statement on biotechnology: “In order to make it easier to bring biotech from the laboratory to factory, and then onto the market, we will propose a new European Biotech Act in 2025″. This commitment, embedded in a document well known for its geopolitical framing, signalled that the Commission was well aware of the increasingly sluggish speed in a sector that, in the aftermath of the COVID pandemic, could not afford to cede.
The Biotech Act first arrived mid-December 2025, ahead of the Commission’s own work programme schedule, which expected it by Q3 of 2026. This acceleration is evidence of the newfound political priority bestowed by Brussels on biotechnology, which was reinforced by Mario Draghi’s September 2024 report on European competitiveness, which identified pharma and biotech as one of ten strategic sectors that required urgent investment. Another push came in the form of the Competitiveness Compass launched in January 2025, which acted as the Commission’s formal response to the Draghi diagnosis, but perhaps the greatest contributor to this urgency was Donald Trump’s pressures on pharma industry to raise drug prices in Europe mid-2025.
Whatever the case may be, one must note that the Act sits within a broader legislative cluster, aiming to improve the competitiveness of the pharmaceutical sector, including the Critical Medicines Act, the European Health Data Space, the Digital Omnibus package, or, to a minor degree, ongoing revisions on pharmaceutical legislation. As a matter of fact, a second Biotech Act, covering non-health biotechnology sectors, has already been announced for 2026, with the December 2025 proposal being framed as the first step on a two-stage strategy.
The numbers that drove the legislation
Throughout the proposal’s explanatory memorandum, one can notice a set of figures that reflect a decade of accumulated structural disadvantage, justifying the Commission’s urgency:
of health biotech VC
The most striking comparison is that of venture capital, as between 2015 and mid-2025, EU biotech companies raised €25 billion through this method of financing, against €219 billion for their US counterparts, which represents a gap of nearly nine to one. This, however, is not a reflection of scientific capacity, as the Union is home to a share of the top 10% most-cited biomedical research (19.2%) comparable to those of the US (19.4%) and China (26.7%), proving that the real faults are structural, and driven by underdeveloped public equity markets, fragmented regulatory environments, and overall slower approval timelines.
Premium Users Only
The effects of this evident lack of funding can be seen clearly once we look at the clinical trials picture, where we’ll notice that the EU’s share of global commercial clinical trials nearly halved between 2013 and 2023, from 22% to 12%, while China’s share tripled from 5% to 18% over the same period. The Commission also attributes this partly to approval timelines, as, on average, both China and the US approve clinical trial applications within 60 days on average, whilst the EU multinational trials average around 113 days.
As a consequence of these failings, another hurdle hampers the EU’s biotechnology industries, in the form of capital flight, which is quite visible in listing behaviour. Over the last six years, 66 out of 67 EU biotechnology companies that went public chose to list on non-EU stock exchanges, with the favourite destination being Nasdaq. The Commission acknowledges in the very Act that this is not a mere matter of preference, but rather a structural disadvantage that European innovators face, given the fragmented nature of EU public equity markets, with none of the exchanges in the Member States offering the reach or liquidity available in New York.
Despite all of this, the sector remains genuinely important to the EU’s economy, with health biotechnology accounting for more than 80% of the approximately €40 billion the health sector contributes annually to the EU’s GDP. The industry has also been growing more than twice as fast as the overall EU economy over the past decade, with the Commission calculating that each job generated in biotechnology indirectly generates 3.4 additional jobs in the broader economy. This, on a somewhat positive note, builds the argument that Europe is not failing at biotech, but rather, that it is succeeding despite the regulatory environment, but that the margin for narrowing the gap with its’ direct competitors is narrowing by the day.
What does the Act actually do?
The Biotech Act organises its interventions across seven pillars, spanning the entire lifecycle of a given health biotechnology product, including early-stage project recognition, and investment access. These pillars are designed to have a compounded effect, removing barriers at every stage of development so that products whose life starts in European laboratories, can continue to grow in the Old Continent.
The First Pillar: Strategic project recognition and industrial support
The act implements a new, tiered framework to design health biotechnology projects in different categories, with the most notable ones being “strategic” and “high impact strategic”. The strategic status, which can be obtained through an application to a Member State authority, unlocks accelerated permitting procedures, and special priority access to national and EU funding, including applicable state aid rules.
The high impact category is accessible to projects that demonstrate “a strong systemic and catalytic potential within the Union’s biotechnology ecosystem to accelerate innovation and enhance translation of research into market applications”. Some of the extra benefits of this category would be a faster permitting cap, or a “Stage Capital Booster”, which aims to improve access to late-stage growth capital.
This designation mechanism has been modelled on the approach first introduced by the Critical Medicines Act, which follows a very similar logic for pharmaceutical supply chain resilience. Nevertheless, the value of the designation will largely depend on how Member States implement it at the national level, as permitting acceleration remains on the hands of their national authorities. The lack of clear guidelines within the act could prove to be one notable weakness if it remains unaddressed.
The Second Pillar: Access to Finance and Investment Pilot
This pillar is focused on addressing the aforementioned structural investment gap hindering the growth of EU biotech companies. To do this, it establishes an EU Health Biotechnology Investment Pilot, under a renewable two-year partnership with the European Investment Bank Group (EIBG). This pilot would offer an array of financial products tailored to the risk profile of biotech companies across the full business cycle, from early-stage discovery up to late-stage scale-up, through a blended finance system that seeks to leverage private capital through the use of public funds.
The pilot is designed to feed into the wider BioTechEU initiative, which was announced alongside the act on December 16th, 2025, and seeks to reach €10 billion in blended finance investments in the biotech and life sciences sectors in 2026 and 2027, building on the EIBG’s existing life sciences venture debt portfolio of about €3.5 billion across 135 projects, and the European Investment Fund’s (EIF) annual commitment of ~€800 million to European venture capital.
While these numbers might seem large, the question lingers on whether they will address the current mismatch between scientific output and investment capture (according to the Commission, the EU holds only a 7% share of global venture capital investment in the sector, despite encompassing 31% of global biotech market revenue). This question gains weight when we revisit the target for capital mobilization set by the pilot (€10 billion in 2026-2027) to our prior data on venture capital raised on last ten years by the US (averaging €21 billion per year). Nevertheless, it would still remain as a first step in the right direction.
The Third Pillar: Accelerating Clinical Trials
This is the most technically significant pillar for the sector in the short term, as the Act amended the Clinical Trials Regulation (EU) No 536/2014 in order to cut approval times, at the same time it simplified procedures, and introduced new categories of trials that reduce administrative burden for lower-risk studies.
Currently, for multinational clinical trials, the end-to-end authorisation timeline falls from 106 to 75 days, including validation and ethical review. If no request for additional information is sent to the sponsor, the time period would be further reduced to 47 days from submission to decision, which represents a large reduction from the current 106-75 day baseline. The additional 50-day extension that currently applies specifically to ATMP trials has also been eliminated, and for substantial modifications to ongoing trials, the timelines have been cut from 106 days to 47, and if no information request was issued, from 64 to 33 days.
A reduction of two months on the authorization timelines, compounded across the multiple trials usually required to bring a product to market, represents months of savings in development time and capital costs, which is a significant competitiveness boost for EU biotech companies. For reference, China and the US typically approve clinical trial applications within 60 days, while the EU average currently sits at around 113 days. The proposed timeline of 47 days would transform the EU’s average timelines from a lagging burden to the most competitive one amongst the big three.
The Act also introduces some structural simplifications, such as adding a new category for “minimal-intervention clinical trials”, covering studies that use already-authorised products within their marketing authorisation terms, as long as there is minimum risk to the safety of patients, which would enjoy simplified procedures. Sponsors can also now create a single core dossier for investigational medicinal products, which can be referenced across multiple associated trials. This would eliminate the duplication that currently adds friction to multi-study development programmes.
The Act also harmonises the legal basis for processing clinical trial data under GDPR, resolving a long-standing ambiguity in how GDPR responsibility is allocated between sponsors and investigators, with both being now treated as controllers.
The Fourth Pillar: Regulatory navigation, sandboxes, and a new support network
Besides the Pilot, the Act also creates an EU Health Biotechnology Support Network, coordinated by the Commission with contact points (or “antennas”) in every Member State. The primary function of the network is to help developers, SMEs, start-ups, and non-profit organisations in navigating the regulatory landscape for products that sit at the boundary between frameworks, as would be the case of a product combining characteristics of a medical device, an ATMP, and a SoHO preparation. This is an explicitly recognised structural weakness of the EU’s framework-by-modality approach to health product regulation.
New regulatory sandboxes are also introduced across multiple legal frameworks, that is, controlled testing environments for novel products or methods that won’t fit existing regulatory categories, which will be employed to inform future regulatory treatment. The pillar also encompasses an EU-wide Regulatory Status Repository, storing existing opinions, recommendations, decisions, and guidance on the regulatory status of health biotechnology products, including ATMP qualification decisions, to facilitate access to reference materials for researchers and sponsors.
The Fifth Pillar: Regulatory flexibility on novel health biotech products
This pillar picks up from the last one on addressing products that are genuinely new and do not fit any existing frameworks, providing the Commission with the tools to create dialogue mechanisms between different regulatory frameworks as soon as a product crosses their boundaries. This seeks to ensure flexibility in regulatory treatment without requiring full legislative revision each time a new product category emerges.
In practical terms, while the most forward-looking, this pillar is also the most difficult one to operationalise, as it depends on how the Commission chooses to use the flexibility it is granting itself, and how EMA and Member State authorities respond to it. To try to soothen possible frictions between the three actors, the pillar establishes a Foresight Panel, designed to give the system an early-warning mechanism for regulatory gaps created by new scientific innovations.
The Sixth Pillar: Biosecurity and Biodefence
This is by far the most politically sensitive pillar, and the one most likely to generate considerable friction during the Ordinary Legislative Procedure, as it creates a mandatory framework for “biotechnology products of concern”. These would be products with significant potential for misuse, and whose placing in the market, introduction, and need would require a demonstration of a “legitimate need”. The Commission will establish and maintain a list of products of concern based on biosecurity risk assessment, which will be subject to change as the threat landscape evolves.
These biosecurity provisions extend beyond the EU’s borders in a significant way, as Article 43 of the proposal applies the restrictions on making products of concern available to any natural or legal person “outside the Union”, which means EU companies cannot export unscreened materials to jurisdictions with weaker biosecurity rules. This essentially amounts to the EU exporting its biosecurity standards extraterritorially, following the regulatory pattern established by the AI Act.
The pillar also adds specific requirements for synthetic biology, as benchtop nucleic acid synthesis devices made available in the EU must incorporate built-in screening mechanisms to detect “sequences of concern”. These would be defined as those of at least 50 nucleotides in length, associated with dangerous pathogens or potential weapons development, including function-based criteria covering pathogenicity, toxicity, and combinatorial assembly logic. This mandatory hardware-level screening requirement is a significant departure from the previous voluntary approach, which was acknowledged to have created an uneven playing field that disadvantaged responsible providers. The EU Biothreat Radar is also present in this pillar, as its projects and initiatives for cross-border surveillance and early detection of biological threats will gain further support from this act.
The Seventh Pillar: Legislative amendments enabling the act
The final pillar’s objective is to modify the necesary elements of the surrounding legislative ecosystem to make the previous pillars operationally coherent. Some of the most notable modifications would be directed at the Clinical Trials Regulation, the ATMP Regulation, the SoHO Regulation, the Veterinary Medicines Regulation, and the General Food Law. It also lays down an extension for Supplementary Protection Certificates (SPC) (see below) which sits formally in a dedicated chapter of the regulation but functions as part of this enabling layer.
The SPC Extension
The 12-month SPC extension works as the Act’s primary intellectual property incentive, which can be achieved provided that a product satisfies four strict conditions. The Act also seeks to extend SPC protection to certain veterinary medicinal products, which may seek to treat zoonotic diseases.
The EU-manufacturing condition is the clearest evidence of the Commission’s desire to foster biotech industries within the common market in the whole Act, by making the SPC extension explicitly linked to keeping manufacturing in Europe, as a product manufactured elsewhere would not qualify. The extension is also great news for advanced therapies, as development timelines are long, and an extension of the period of effective market exclusivity represents a solid material financial incentive.
The extension is not automatic, as EMA will assess compliance with the conditions on a case by case basis, issuing a confirmatory statement if they are satisfied.
Two problems, one (Companion) Directive
COM(2025) 1031, also published on December 16th, amends two existing directives to remove structural obstacles that the Biotech Act’s regulation cannot address through direct application, as it covers specifications set through Directives, and that therefore were legislated at the national level.
On genetically modified micro-organisms
Directive 2001/18/EC was designed to regulate genetically modified plants, with its risk assessment framework, consent validity rules, and detection method requirements all reflecting the regulatory and biological challenges of transgenic crops, but not of genetically modified micro-organisms (GMMs) such as bacteria, algae, fungi or viruses.
GMMs have certain particularities that sets them apart from transgenic crops, most notably their quick reproduction and evolution cycles, as well as the very short product cycles, which are not compatible with the 2001 Directive. This has caused that GMM derived products, such as novel biofertilisers, biopesticides, or even products for the biomining of lithium and gold from electronics waste are developed mostly in the US and China.
Among the changes introduced to the Directive, stands the creation of GMM-specific risk assessment and requirements, adapted to the actual biological properties of micro-organisms, to be further specified by delegated acts informed by EFSA’s June 2024 opinion, and the 2025 ENGL laboratory report. It also makes market consent granted for GMMs, valid for an unlimited period of time, and replacing the current fixed-period validity which imposed renewal burdens on operators without proportionate safety benefits, given the short commercial lifecycles of these products.
Finally, the new directive has also introduced the “low-risk GMM” category, for GMMs that are taxonomically and molecularly well characterised, belonging to a taxonomic unit with EFSA’s “Qualified Presumption of Safety” (QPS) status, and does not contain genes of concern not naturally present in the parental organism, such as antimicrobial resistance genes. Low-risk GMMs would therefore benefit from a streamlined authorisation procedure, and could be exempt from post-market environmental monitoring obligations.
The definition of “genes of concern” has already generated some debate in the Council working party, with Member States, including Hungary, filing scrutiny reservations, with others noting that the relationship between “genes of concern” and the QPS status framework needs further clarification.
On organ processing
Directive 2010/53/EU governs the quality and safety of human organs intended for transplantation, but its scope had not kept pace with the emergence of sophisticated ex-vivo organ preservation and processing technologies that extend the time window between procurement and transplantation, allowing organs to be actively improved before use. Donation, procurement, transport, and transplantation, are directly affected by this Directive, but this is not the case for processing, leaving a regulatory gap as these technologies have proliferated clinically.
The amendment adds “processing” to the directive’s scope and defines it as any operation involving the handling of organs, including preservation, application of chemotherapy, and surgery, performed to maintain or improve functional status prior to transplantation. Transplantation centres must therefore obtain prior authorisation from the competent authority before applying a processed organ to a recipient, and must also conduct a benefit-risk assessment of the processing. Wherever scientific evidence is limited or risks are significant, a clinical outcome monitoring plan must be submitted for approval. The Commission is required to publish a public list of authorised organ processing operations.
Open questions and tensions
Several aspects of the Act are likely to attract significant revisions during the ordinary legislative procedure, and a number of analytical uncertainties remain genuinely open.
The absence of a full impact assessment is the most prominent procedural concern, as the Commission justified this on grounds of “political urgency”, and while an analytical Staff Working Document will accompany the proposal, the Baker McKenzie analysis and others have noted that this approach may have left limited time to explore alternatives and assess long-term implications. Impact assessments are quite important, as they serve a function beyond bureaucratic compliance, by forcing explicit articulation of options not chosen and providing a baseline for evaluating implementation success. Their absence creates a gap in the Act’s evidential architecture that critics will surely exploit during parliamentary debate.
The SPC extension conditions, and specifically the EU manufacturing requirement, are likely to face scrutiny from Member States with strong biotech sectors but less manufacturing base, such as the Netherlands or Austria, as the requirement that manufacturing must occur in the EU to qualify for extended IP protection is an explicit market-shaping instrument, and there will be pressure to define precisely what counts as a “manufacturing step” beyond the exclusions for packaging, testing, and certification.
The interaction between the biosecurity provisions and existing dual-use export control regulation has not been fully resolved in the proposal either. The extraterritorial application of the products-of-concern framework will face legal challenges from industry and potentially from third countries, echoing the debates that accompanied the early implementation of the AI Act’s extraterritorial provisions.
The regulatory sandboxes, while welcome in principle, are supervised at Member State level for several frameworks, which risks recreating in miniature the regulatory fragmentation the Act is designed to overcome. If sandbox outcomes differ significantly across Member States, the evidence base for future regulatory development will be inconsistent.
Finally, the GDPR clarifications in the clinical trials provisions, while helpful, do not fully resolve the tension between data-sharing requirements necessary for multinational trial operation and the data minimisation and storage limitation requirements of Regulation 2016/679. This is a tension that runs through the European Health Data Space regulation as well, and it will require implementing guidance to manage in practice.
What to watch out for
The proposal entered the ordinary legislative procedure following publication on 16 December 2025. The European Parliament later referred it on 14 January 2026. The Council working party on pharmaceuticals and medical devices began technical examination of the companion directive in February 2026, with working documents first circulated in March 2026. The European Economic and Social Committee adopted its opinion in plenary on 18 March 2026, broadly welcoming the Act while raising concerns about rare disease and paediatric patient access.
Realistic expectations for adoption point to late 2027, with phased application running through 2027 and 2028. The clinical trial timeline reductions will not apply to applications already submitted when the relevant provisions enter into application. The Commission is required to conduct a strategic mapping of the EU’s biotechnology ecosystem within six months of entry into force.
