Despite an uncertain macro-economic environment, the French health technology sector continues its growth trajectory, demonstrating both entrepreneurial dynamism and maturity, according to the new edition of the France Biotech study encompassing French startups in biotech, medtech and digital health.
France Biotech, the French association for innovation in healthcare, has come out with the 2022 edition of its yearly study, Panorama France HealthTech 2022 (in French), surveying French start-ups in innovative health technologies and, the association says, the results are more than encouraging.
“This 20th edition bears witness to the strong entrepreneurial dynamic of the HealthTech sector and illustrates the long road travelled over the past 20 years,” said Franck Mouthon, president of France Biotech.
Today, the HealthTech sector in France boasts some 2,600 companies, including 800 biotechs, 1,440 medtech firms, and 400 digital health and artificial intelligence companies, providing about 50,000 direct and indirect jobs within the French territory.
The Panorama France HealthTech 2022 report, which surveyed 454 companies, demonstrated the sector’s increased maturity. This edition’s participants, the study found, are developing an average of three products and have been in operation on average for 10.5 years. These companies generated a combined revenue of EUR 1.3 billion in 2021, which represents a 62 percent increase with respect to 2020, and represented 14,500 direct jobs.
Although 56 percent remain what is referred to in France as “very small companies” with fewer than 10 employees, they have an average of 32 people on staff (up 28 percent from 2021) and 28 of them now have more than 100employees.
The need for new talent will be strong in 2023 with 86 percent of companies planning to recruit new employees, representing some 2,200 new staff members this year. However, finding that talent may present a challenge. “53 percent of the participating companies anticipate difficulties in recruiting and finding suitable profiles, in particular for computing and bio-computing activities, bioproduction, quality assurance and regulatory affairs,” says Chloé Evans, deputy to the managing director, in charge of sector studies and international relationships at France Biotech.
The French Healthtech Ecosystem
Biotechnology companies number 800 and currently have nearly 2,300 products in development. Their technological approaches are very diverse with biologics or biomedicines (antibodies, gene therapies, etc.) representing more than 50 percent of the products under development. Moreover, in 2022, 22 percent of products have orphan drug status versus 16 percent in 2021.
Medical device and diagnostic companies, numbering 1,440 (source: Panorama Snitem 2021), are gaining in maturity with an average of 3 products per company in 2022. 56 percent of them are now in the marketing stage (+6 points vs. 2021).
In 2022, regulatory constraints had a strong impact on the sector and appear in second place in the concerns of entrepreneurs after financing with 50 percent of companies concerned.
Digital health companies offer very diversified solutions with multiple applications, telemedicine and remote monitoring being among the key areas, follow-up of the digital diagnosis. The business area favoured by digital health companies remains the hospital purchase space, then the reimbursement of solutions or medical devices digital by the French national health insurance system. These companies benefit from faster market access than biotechnology with 75 percent of them in the commercialization phase.
The entry into the common law of remote monitoring represents a great step forward for the sector, but the technical and pricing methods must not hinder the deployment of digital solutions.
2022 represented a challenging year for the sector. Given the difficulties on financial markets, companies postponed their initial public offerings and were more focused on investment funds to support their growth.
After two exceptional years (2020 and 2021) for HealthTech companies despite the pandemic, the financing of these companies has fallen back to pre-COVID-19 levels. In this context, France became the first European country in amounts raised and the second in number of operations. In total, EUR 2.6 billion was raised in capital in 2022 (+14% vs 2021).
About the study
Developed in partnership with Bpifrance, the public investment bank, Citeline, provider of solutions for business intelligence and data analysis, Euronext, the leading pan-European stock exchange, and EY, a global leader in audit, advisory, tax and legal, transactions.
This study was carried out with the support of CRF Assurances, a specialist in the risks incurred by biotechnology, medtech and digital health companies as well as that of the network of health competitiveness clusters.