Since redundancies in Europe are expensive and politically sensitive, companies have tended, where possible, to find other ways of cutting costs. The prolonged biotech winter is leaving many European biotechs with few options besides layoffs, however.

Proteomics companies don't want to be seen as database providers, a low-valuation model once pursued by Celera and Incyte. So companies like Myriad Genetics and Oxford GlycoSciences have spun out their database businesses into JVs with IT partners, which provide cash and technology. Both partners benefit: biotechs get valued as budding drug developers and retain access to these tools, while IT companies get a foot in the door of the life sciences markets into which they wish to expand their products and services.

Spin-out activity at UCL Ventures was jump-started by the success of one company, SR Pharma, during the late nineties. The tech transfer office now takes advantage of London's status as a business and financial center to find and develop new entrepreneurs, and continues to benefit from UK government seed funds.

While open surgery remains the traditional primary treatment option for solid tumors, ten years ago a procedure called frame-based radiosurgery was commercially introduced in the US to treat brain tumors. Radiosurgery uses an intense dose of high energy radiation to destroy a tumor with precise targeting in order to avoid damaging healthy tissue. This requires patients to have a stereotactic metal frame screwed into their skulls to accurately target the tumor. The frame also limits radiosurgery's applicability largely to intracranial tumors, which constitute only 10% of all solid tumors. Accuray has developed a frameless radiosurgery system, the CyberKnife, which has proven effective in treating head and neck tumors without the frame's discomfort, and is looking to expand its application to other body tumors. Having survived several rocky periods since its 1990 launch, Accuray must now show it can survive selling capital equipment, an area historically harsh on start-up companies, both in terms of competing against larger entrenched competitors and in convincing customers to acquire new costly systems.