Contact: Marc De Maeyer
Deloitte
Marketing & Communications Director
+32 2 600 60 40

Contact: Dagmar Lučeničová
Deloitte Central Europe
Regional Programme Coordinator, Financial Services
+420 246 042 539

London, September 9, 2002 — Europe's health and life sciences sector is showing signs of robust growth despite the downturn in capital markets, according to a report released today by Deloitte & Touche.

The report, entitled "Surviving Uncertainty" tracks the financial and operational performance of nearly 1,800 businesses in Europe's mediscience sector, estimates that employment in the sector is growing at 23 percent a year.

Private equity and venture capital backing for the sector remains strong.  During 2000 and 2001 the European mediscience industry raised more than €1 billion from private equity and the signals are that this is expected to continue in 2002.  The report found, however, that private equity is not being used to create companies at historic levels, but to invest larger amounts in existing companies.

The geographic share of the investments is shifting away from the UK and Germany as France and the Medicon Valley gain ground.  Meanwhile, venture capitalists are backing product based companies and are increasingly avoiding pure platform companies.

"This industry is not alone in facing challenges in the public markets-in its ability to finance its progress, establish valuable links with partners, manage research and development resources and deal with regulators." said Stuart Henderson, Head of UK Head of Life & Health Sciences at Deloitte & Touche.

"Value in entrepreneurial health science companies resides in intangibles-the quality of the workforce, strategic partners, intellectual property, reputation, customers and corporate knowledge.  Consequently, as they grow, companies must secure and control these sources of value and to manage their growing pains and build better companies."

"We believe companies in this sector, irrespective of their size and maturity, must consider the formal development of risk management principles and disciplines,"

Key findings:

• The market capitalisation of the 125 publicly listed companies in the sector totalled €37 billion at the end of the first half of 2002
• Only 12 percent of the European mediscience population has a market cap of above €500 million.  Lack of liquidity and perceived volatility have triggered a retreat by institutional investors from the sector
• There are currently 528 biotech-derived drugs from European companies in the pre-clinical and clinical development stage
• The bulk of European mediscience activities is occurring in the UK, Germany, France, Switzerland and the Medicon Valley (Northern Denmark and Southern Sweden).  The UK, Europe's most mature biotech group, dominates.