The EU Biotech Act: What Sponsors Need to Know About Europe's Biotechnology Transformation

The European Commission's draft regulation, released December 16, 2025, aims to transform Europe into a global biotech powerhouse by addressing regulatory fragmentation, funding gaps, and clinical development inefficiencies that have driven innovation away from the EU. 

On December 16, 2025, the European Commission released its proposal for the European Biotech Act, a comprehensive draft regulation of over 250 pages designed to strengthen Europe's biotechnology and biomanufacturing sectors with a particular focus on health.¹ For clinical research sponsors working in oncology, rare disease, cell and gene therapy, and other innovative therapeutic areas, this legislation represents a significant overhaul of the European biotech ecosystem. 

Despite world-class research capabilities, the EU has consistently struggled to translate scientific excellence into commercial success. Between 2015 and mid-2025, EU biotech companies received just €25 billion in venture capital compared to €219 billion in the United States.¹ Even more telling, 66 out of 67 EU biotechnology companies that went public over the last six years chose to list on non-EU stock exchanges, underscoring persistent structural disadvantages for European innovators.²

The EU Biotech Act seeks to reverse this trend by addressing bottlenecks across the entire development lifecycle, from early research through manufacturing and market access, while maintaining Europe's high safety and quality standards.

Why Europe Needs the Biotech Act Now

The EU biotechnology sector has grown twice as fast as the overall economy over the past decade, accounting for €38.1 billion in GDP and supporting more than 900,000 jobs. Health biotechnology specifically drives 75% of this value, making it a cornerstone of Europe's economic competitiveness and strategic autonomy.³

Yet the sector faces critical challenges that threaten its continued growth:

• Regulatory Fragmentation: Divergent national rules and implementation of EU regulations create fragmented market entry conditions, raising compliance costs and delaying market access. The global share of commercially sponsored clinical trials in the European Economic Area dropped from 22% in 2013 to just 12% in 2023, while China's share rose from 5% to 18% during the same period.⁴
• Clinical Trial Inefficiencies: Current clinical trial approvals average 113 days for multinational trials; nearly twice the 60-day standard in competing regions. This delay, coupled with complex procedures, has made Europe less attractive for innovative trial conduct.¹
• Funding Gaps: Access to risk-tolerant capital remains severely limited, particularly at the scale-up and late-stage development phases. US biopharma startups receive approximately nine times more late-stage funding than their EU counterparts.¹
• Manufacturing Capacity: Despite strong expertise in areas like biosimilars, the EU has not fully exploited its biomanufacturing potential due to fragmented governance and coordination challenges across Member States.¹
• Skills Shortages: Critical gaps persist in R&D, regulatory affairs, AI, data analytics, and specialized biomanufacturing expertise, hindering the sector's ability to compete globally.¹

The EU Biotech Act aims to tackle these systemic barriers through a coordinated, multi-pillar strategy that spans the entire innovation lifecycle.

The Seven Pillars of the EU Biotech Act

The Act's framework is organized into seven interconnected pillars, each addressing specific barriers while maintaining high standards for patient safety, environmental protection, and biosecurity.¹

Each pillar contains specific measures designed to address barriers identified through extensive stakeholder consultation. Let's examine the elements most relevant to clinical research sponsors.

Strategic Health Biotechnology Projects: Fast-Track Support and Funding

The EU Biotech Act establishes a tiered project recognition framework that mobilizes public and private investment while accelerating development timelines.¹

Health Biotechnology Strategic Projects

Companies or consortia can apply to designated Member State authorities for recognition as a strategic project. Benefits include: 

• Accelerated permitting procedures at national level
• Single points of contact for coordinated administrative support
• Priority consideration for national funding programs
• Status as projects in the public interest with highest national significance

Projects must demonstrate contribution to EU competitiveness, resilience, or security in health biotechnology, with clear plans for development, manufacturing, or deployment activities.

High Impact Health Biotechnology Strategic Projects 

A subset of strategic projects with systemic, cross-border relevance can achieve high-impact status through a two-tier process:

1. Member State assessment and recommendation
2. European Commission recognition decision

High-impact projects qualify for:

• Priority access to EU funding programs, including the proposed European Competitiveness Fund
• Enhanced coordination support at EU level
• Recognition under STEP Regulation (Regulation EU 2024/795),⁵ enabling access to additional shared-management funds
• Streamlined procedures across multiple Member States

Examples include biotechnology development accelerators (trusted testing facilities), centers of excellence for advanced therapies, AI-enabled biotech platforms, and biodefense capability projects.

EU Health Biotechnology Investment Pilot: Closing the Funding Gap

To address Europe's chronic shortage of late-stage capital, the EU Biotech Act proposes a dedicated investment facility developed in partnership with the European Investment Bank Group.¹

While early-stage funding for biotech is relatively accessible in Europe, scale-up and late-stage investment remains severely constrained. European companies routinely relocate or list abroad to access the growth capital needed for Phase III trials, manufacturing scale-up, and commercialization. 

What Does The EU Health Biotechnology Investment Pilot Bring Together?

• Equity instruments tailored to biotech risk profiles
• Venture-style debt for companies not suited to pure equity models
• Blended public-private capital leveraging EU funding to mobilize private investment
• Coordination support connecting project promoters with investors

Projects contributing to a specific Late-Stage Capital Booster component within the pilot may receive recognition as high-impact strategic projects, creating additional benefits beyond funding access.

Clinical Trials Regulation Amendments: Accelerated Timelines for Sponsors

The EU Biotech Act includes significant amendments to Regulation (EU) No 536/2014 (the Clinical Trials Regulation),⁶ addressing longstanding concerns about approval timelines that have made Europe less competitive globally.

Timeline Reductions for Clinical Trial Authorization

Current multinational clinical trial applications average 113 days from submission to decision. The EU Biotech Act proposes dramatic reductions¹:

How Are Assessments Streamlined Under the Clinical Trials Regulation?

• Strengthened Reporting Member State Role: The reporting Member State will lead scientific, ethical, and regulatory assessment, with other concerned Member States relying on this evaluation. This approach promotes mutual trust while reducing duplicative review processes.
• Enhanced Sponsor Communication: Improved dialogue mechanisms during assessment periods allow sponsors to address questions more efficiently, minimizing unnecessary delays in clinical trial authorization.
• Mandatory Harmonized Templates: EU-wide standardized templates for clinical trial applications eliminate variation in documentation requirements across Member States, simplifying multinational trial planning.
• Core Investigational Product Dossier: A single, reusable dossier for the same investigational medicine across multiple applications streamlines registration trial conduct and marketing authorization preparation, particularly valuable for sponsors running parallel or sequential studies with the same product. 

New Trial Categories and Flexible Approaches 

• Minimal-Intervention Clinical Trials: A new category beyond existing low-intervention trials, with further simplified requirements for studies involving minimal additional risk to participants. This creates faster pathways for comparative effectiveness research and real-world evidence generation.¹
• Combined Medicine-Device Studies: Single, integrated assessment process for trials investigating medicines together with medical devices or in vitro diagnostics, eliminating parallel regulatory tracks.
• Clinical Trial Sandboxes: Controlled environments for testing innovative trial designs and methodologies under regulatory supervision, generating evidence to support future approval of novel approaches.
• Enhanced Digital and AI Provisions: Support for AI systems and digitalization in trial conduct, aligned with the EU AI Act,⁷ including harmonized legal basis for personal data processing under GDPR.
• Emergency Procedures: Accelerated pathways for public health emergencies, building on COVID-19 lessons learned.

Simplified Requirements for Advanced Therapies Containing GMOs

For certain advanced investigational therapy medicinal products containing genetically modified organisms that present negligible environmental risk, sponsors may submit a declaration rather than a full environmental risk assessment (ERA), subject to Committee for Medicinal Products for Human Use verification.¹

This risk-proportionate approach recognizes that many gene therapies and GMO-containing ATMPs pose minimal environmental concerns, allowing scientific expertise to replace bureaucratic process where evidence supports it.

Regulatory Sandboxes: Testing Innovation Under Controlled Conditions 

The EU Biotech Act introduces regulatory sandboxes across multiple legislative frameworks; a critical tool for sponsors developing products that don't fit neatly into existing regulatory categories.¹ 

Sandboxes provide controlled environments where innovative technologies, methods, or products can be tested, marketed, or used under proportionate regulatory oversight. They generate real-world evidence to inform future regulatory frameworks while enabling earlier market access for truly novel approaches.

Scope Across Frameworks

• Clinical Trials Regulation: Testing innovative trial designs, adaptive methodologies, and novel endpoints
• Substances of Human Origin (SoHo) Regulation: Member‑State regulatory sandboxes for time‑limited, supervised testing of innovative SoHO approaches
• General Food Law: Biotechnology innovations in food and feed safety assessment
• Veterinary Medicines: New technologies in animal health product development 

Most sandboxes operate at Member State level under relevant competent authority supervision, with European Commission oversight for EU-level initiatives. Operational details including application processes and participation criteria will be defined in implementing regulations. 

Benefits for Sponsors

• Early regulatory engagement on novel approaches
• Reduced uncertainty for products outside traditional categories
• Generation of evidence supporting future marketing applications
• Faster pathways to market for breakthrough technologies
• Collaborative problem-solving with regulators

Supplementary Protection Certificates: Extended Market Exclusivity 

The EU Biotech Act proposes a 12-month extension to Supplementary Protection Certificates for qualifying biotech and ATMP products; a significant incentive for companies developing innovative therapies in Europe.¹

Eligibility Criteria

Products must meet all of the following conditions:

• Contain a new active substance "distinctly different" from any authorized medicinal product in the EU
• Demonstrate a mechanism of action "distinctly different" with safety and efficacy at least equivalent to existing treatments for the same disease
• Clinical trials evaluating efficacy conducted in more than two Member States
• At least one manufacturing step (excluding packaging, quality testing, and certification) performed in the EU

This extended protection helps offset lengthy development timelines characteristic of advanced therapies and explicitly encourages both clinical trial conduct and manufacturing within the European Union. The requirement for multi-Member State trials and EU-based manufacturing creates concrete incentives for European investment.

Biosimilars: Strengthening European Competitiveness 

Recognizing Europe's expertise in biosimilars, the EU Biotech Act includes specific measures to strengthen this strategically important sector.¹

• EMA Guidelines on Streamlined Development: The European Medicines Agency is tasked with developing and updating non-binding guidelines on tailored regulatory approaches for biosimilar development. These may include reduction of clinical data requirements where strong analytical and non-clinical evidence supports comparability, similar to recent FDA streamlining efforts.⁸
• Strategic Project Support: Biosimilar-focused projects involving R&D, manufacturing, and marketing authorization may qualify as health biotechnology strategic projects, accessing accelerated procedures and priority funding.
• International Cooperation: The Act promotes cooperation between European economic operators and international biotechnology clusters focused on biosimilars, subject to competition law compliance.
• Manufacturing Capacity Utilization: Enhanced coordination aims to better exploit Europe's existing but underutilized biosimilar manufacturing capacity, addressing the gap between European expertise and actual production deployment.

AI and Data Integration in Biotechnology 

Aligned with the EU's Apply AI Strategy and AI Continent Action Plan,^9,10 the EU Biotech Act promotes responsible AI adoption across the biotechnology lifecycle.

• EMA Guidance on AI: The European Medicines Agency will develop guidance on AI use throughout the medicinal product lifecycle, from discovery and development through manufacturing and post-market surveillance.¹
• Trusted AI Testing Environments: AI-focused projects providing secure testing infrastructure for biotech applications may receive high-impact strategic project status, enabling broader access to validated AI tools.
• Data Quality Accelerators: Projects improving access to high-quality, interoperable biotech and health data for AI training and validation may receive enhanced support.
• Integration with European Health Data Space: The Act complements Regulation (EU) 2025/327 establishing the European Health Data Space,¹¹ creating frameworks for responsible data sharing while maintaining privacy safeguards.
• Digital Platforms for Clusters: Support for digital infrastructure connecting biotechnology clusters and enabling collaborative AI-driven research.

Biosecurity Provisions: Balancing Innovation and Safety 

The EU Biotech Act's biosecurity framework aims to prevent misuse while supporting legitimate research and development.¹

• Biotechnology Products of Concern: Certain products with potential dual-use applications will require demonstration of "legitimate need" before being made available to prospective customers. The Commission will develop and maintain a specific list based on biosecurity risk assessment rather than broad research restrictions.
• Synthetic Biology Safeguards: Benchtop nucleic acid synthesis devices must incorporate built-in screening mechanisms to detect and flag "sequences of concern", genetic sequences associated with dangerous pathogens or potential weapons development.
• Reporting Requirements: Suppliers and users must report suspicious transactions, with enforcement mechanisms for non-compliance. For legitimate research organizations and pharmaceutical developers, these measures should create minimal burden as they focus on preventing malicious misuse.
• Biodefense Capabilities: Projects contributing to EU Biothreat Radar systems or strengthening biodefense preparedness may receive high-impact status and priority funding consideration, recognizing the dual importance of detection and response capabilities. 

Implementation Timeline: When These Changes Take Effect

The Commission proposal was published on December 16, 2025. This represents a draft regulation subject to the ordinary legislative procedure.¹

Legislative Process

• 2026: Active legislative debate, stakeholder input, and amendment discussions across Parliament committees and Council working groups
• 2027: Continued negotiations and potential adoption if consensus is reached efficiently
• 2027-2028: Entry into force followed by phased application as implementing regulations are developed

Within six months of entry into force, the Commission must conduct a strategic mapping of the EU's biotechnology ecosystem, analyzing capacities, gaps, dependencies, and investment needs. This will inform implementation priorities.¹

The Commission has explicitly stated this health-focused Act will be followed by a second biotech legislative proposal in Q3 2026 covering agriculture, energy, defense, and other industrial biotech sectors beyond health applications.¹

What Should Clinical Research Sponsors Do Now Because of the EU Biotech Act?

The EU Biotech Act will fundamentally reshape Europe's clinical development landscape. Forward-thinking sponsors should take these strategic actions: 

• Assess Strategic Project Eligibility: For projects in development or planning stages that may qualify as strategic or high-impact initiatives, begin early discussions with Member State authorities about potential recognition, requirements, and available support mechanisms.
• Reassess European Clinical Trial Strategies: Anticipated clinical trial authorization timeline reductions and streamlined procedures may make Europe more attractive for first-in-human studies, early-phase trials, and innovative study designs. Consider how this impacts your global development sequencing and investment allocation.
• Evaluate Manufacturing and CMC Strategy: The 12-month SPC extension for products with EU manufacturing and multi-Member State trials creates concrete financial incentives to establish or expand European production capabilities, particularly for advanced therapies with lengthy development timelines.
• Monitor EMA Biosimilar Guidance: If developing biosimilars, track forthcoming EMA guidelines on potentially reduced clinical data requirements based on strong analytical evidence. Early engagement on development strategies may position products to benefit from streamlined pathways.
• Explore Regulatory Sandbox Opportunities: For novel products outside traditional regulatory categories, such as combination products, borderline products, or those using unprecedented technologies, sandboxes may offer collaborative pathways to gather evidence while engaging regulators proactively.
• Strengthen Data and AI Capabilities: As AI and digital tools become more integrated into biotech development, regulatory submissions, and post-market surveillance, ensure your data management, analytics, and AI governance frameworks can support evolving regulatory expectations.
• Engage with Biotechnology Clusters: The Act promotes networking and cooperation among European biotech clusters. Membership or collaboration with recognized clusters may provide access to shared infrastructure, expertise, and coordination support that reduces individual company burden.

How Precision for Medicine Supports Your European Biotech Strategy 

At Precision for Medicine, we're closely monitoring the EU Biotech Act's progress through the legislative process and preparing our teams to help sponsors capitalize on emerging opportunities while managing implementation complexities.

Our integrated capabilities across clinical operations, regulatory affairs, biospecimens, and translational science position us to support your European biotech programs through this transition: 

• Strategic Regulatory Planning: Our regulatory experts help you interpret evolving requirements, engage with Member State authorities, and develop clinical trial authorization strategies aligned with the new framework and anticipated timeline improvements.
• Clinical Trial Execution: Extensive European site networks and expertise in complex oncology, rare disease, and advanced therapy trials enable us to leverage expedited timelines and innovative trial designs as the Act's provisions take effect.
• Advanced Therapy Development: Deep capabilities in cell and gene therapy development, including specialized biospecimen collection, translational endpoints, immune monitoring, and logistics for temperature-sensitive biologics navigating updated regulatory pathways.
• Translational and Biomarker Sciences: Our labs provide the analytical rigor and specialized assays, flow cytometry, immune monitoring, genomics, proteomics, that support innovative biotech products requiring comprehensive translational endpoints.

The European Biotech Act represents Europe's commitment to reclaiming its position as a global leader in life sciences innovation. For sponsors willing to navigate this transition strategically, the opportunities are significant.

Discover how Precision for Medicine delivers life-changing therapies without a lifetime of development. 

References 

1. European Commission. Proposal for a regulation of the European Parliament and of the Council on establishing a framework of measures for strengthening Union's biotechnology and biomanufacturing sectors particularly in the area of health and amending Regulations (EC) No 178/2002, (EC) No 1394/2007, (EU) No 536/2014, (EU) 2019/6, (EU) 2024/795 and (EU) 2024/1938 (European Biotech Act). COM(2025) 1022 final. December 16, 2025.
2. Vlaams Instituut voor Biotechnologie. From Discovery to Economic Impact: Biotechnology Competitiveness for Europe. 2024.
3. WifOR Institute, EuropaBio. Economic Impact of the European Biotechnology Industry. March 2025. https://www.europabio.org/wp-content/uploads/2025/03/WifOR_EuropaBio2025.pdf
4. European Federation of Pharmaceutical Industries and Associations. Assessing the Clinical Trial Ecosystem in Europe. 2024.
5. Regulation (EU) 2024/795 of the European Parliament and of the Council of 29 February 2024 establishing the Strategic Technologies for Europe Platform (STEP). Official Journal of the European Union. 2024;L795.
6. Regulation (EU) No 536/2014 of the European Parliament and of the Council of 16 April 2014 on clinical trials on medicinal products for human use, and repealing Directive 2001/20/EC. Official Journal of the European Union. 2014;L158:1-76.
7. Regulation (EU) 2024/1689 of the European Parliament and of the Council of 13 June 2024 laying down harmonised rules on artificial intelligence (Artificial Intelligence Act). Official Journal of the European Union. 2024;L1689.
8. US Food and Drug Administration. Biosimilar Development, Review, and Approval. Updated November 2024. https://www.fda.gov/drugs/biosimilars/biosimilar-development-review-and-approval
9. European Commission. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Apply AI Strategy. COM(2025) 723 final. October 8, 2025.
10. European Commission. AI Continent Action Plan. 2025. https://ec.europa.eu/newsroom/dae/redirection/document/114523
11. Regulation (EU) 2025/327 of the European Parliament and of the Council of 11 February 2025 on the European Health Data Space. Official Journal of the European Union. 2025;L327.