Sonus' proposed acquisition of Synt:em answers the French biotech's call for a financeable owner with upside, preferably in the US. For many European biotech firms, M&A may be their only way out of a financing hold. The Synt:em deal-granted its approved early next year--shows that it's still possible to call favorable deal terms, however.

Despite investors' pleas, most observers agree there are still far too many small, sub-critical biotech firms in Europe. Yet two late-2003 deals-CeNeS' acquisition of TheraSci, and Develogen's merger with Peptor-may point to more consolidation both in public and private European biotech during 2004. And the early signs are that such deals may be driven less by sheer desperation, and more by a recognition of what both public and private investors want.

The $752 million worth of new funds raised by leading European biotechnology VCs over the past three months suggests that Europe's private biotech market is picking up. But these funds won't simply land in companies' laps. Europe's biotech managers, many of whom have raised funds only during boom times, will have to satisfy increasingly stringent criteria to secure their slice of the pie. Yet although late-stage products and critical mass still top some investors' wish lists, selected platform and early-stage groups capable of rapidly advancing a broad range of compounds into the clinic have also found funding.