LONDON - A get-together by those in the European biotechnology community these days gives attendees more of a chance to commiserate than celebrate.

Times are hard, and a turnaround is not yet in sight, said attendees of the two-day BIA European CEO and Investor Conference here, which ended Tuesday.

Crispin Kirkman, chief executive of the BioIndustry Association, said a theme at the conferenfce was that the time is right for a biotechnology "reality check." And a just-released report on the European biotechnology industry is appropriately subtitled, "Surviving Uncertainty."

Speakers talked of "strong fundamentals" for the sector, but of problems everywhere else, especially in those places that count in down times: money, product development, regulatory hurdles, and a lack of harmoninzation among European countries in so many areas critical to developing biotech drugs.

"This conference was a reality test,'" Kirkman said, "because we know when the markets reopen we need the people who survived to have a robust proposition. They are focused on the essentials, and when public investment becomes available again they will be out of the blocks like greyhounds.

"Nobody can doubt the consumer market need" for biotechnology products," he said. "That has to be the philosophy for difficult times."

Kirkman said the 250 or so conference attendees heard a consistent theme from speakers on tightening their operations, making them better by exploring where value rests, conducting trials correctly, and concentrating on due dilligence, intellectual property and deal making. The theory, then, is that companies that make it through would come out actually stronger, and not buoyed by the perhaps unearned gains of 1999 and 2000.

Stuart Henderson, the UK head of life and health sciences for Deloitte & Touche, presented on Tuesday his firm's new report on the industry in Europe. His conclusions include that the industry has robust fundamentals for growth, that companies need to manage their essential issues, and they need to seek opportunities to collaborate.

The report, released Monday, gathered data on 1,788 "mediscience" firms in Europe and Israel. It is available to the public at www.deloitte.co.uk.

There are positive signs, he said, such as employment in the sector growing at 23 percent per year, and that there are 528 biotechnology-derived drugs from European companies in preclinical and clinical development, with 295 of them coming from the UK.

The report defines mediscience as companies using biotechnology methods to develop drugs, diagnostics companies, platform providers and service providers, such as contract research firms and manufacturers.

The market cap of the 125 public companies included in the report totaled €37 billion at the end of June, although only 12 percent of them had a market cap of more than €500 million.

Private equity and venture capital money remain available despite the lack of public money, Henderson said, adding that there are about 100 funds prepared now to back European biotechnology companies. Those investors are most interested in follow-on rounds rather than new companies, and in companies with a therapeutic focus rather than those with platform technologies.

Five regions account for more than three-quarters of the companies in the sector, with Germany topping the list at 540 compannies and the UK tallying 430. But the UK has significant leads in other areas, such as market capitalization, revenues, clinical development and employment. Other significant regions are in France, Switzerland and the quickly growing Medicon Valley, which includes southern Sweden and northern Denmark.

New and small-cap markets in much of the continent don't provide the capital to fully support biotechnoloogy companies that trade on them, although a solution such as a pan-European market doesn't appear likely anytime soon, Henderson said. One potential solution might be using the more stable markets in London by non-UK companies, he suggested.