Ireland's biotechnology sector seems to have been a long time coming. While other small European countries have built formidable rosters of listed biotech firms, Ireland over the last decade has languished. Serious growth always seemed to be somewhere over the horizon, but a new sense of optimism is now emerging.

Insiders say the new emphasis on funding research in the universities has a good chance of producing a generation of companies that could help the Irish biotech scene make a mark internationally. And, following the first closing of Fountain Healthcare Partners' venture capital fund at €75 million ($117 million, US), new money is now available to help turn that possibility into a commercial reality.

"I'd be optimistic about the industry," says Jack Gorman, biotechnology analyst at Davy Stockbrokers in Dublin. "It takes time to develop R&D expertise; it takes time for that to come through to commercialization."

Companies such as Opsona Therapeutics, for example, may be in the vanguard of the new breed of companies to emerge as Irish research in areas such as immunology and apoptosis gathers strength. One recent analysis placed Ireland second in Europe, behind Switzerland, in citations per paper in immunology.

Elan's restructuring has sparked the emergence of a clutch of specialty pharma firms, including AGI Therapeutics, Merrion Pharmaceuticals, and Azur Pharma, which have products either on the market or in late clinical development. Niche firms such as Alimentary Health and IdentiGEN have shown how to marry the country's tradition of research in agricultural science and food science with modern biotechnology.

Elsewhere, the convergence between medical devices and cell therapies is generating excitement. Regenerative medicine is a key focus, particularly in western Ireland, where much of the country's medical devices expertise is located.

None of these ventures has hit the proverbial home run as yet, but they are at the plate and swinging. "There are wonderful pearls of opportunity throughout this country," says Mary Skelly, CEO of Angel BioVentures, a venture development firm. "You have to be here a while to understand there's a lot going on."

"The sector is at an inflection point. There is a pressing need for investment to ramp up the companies that are already here," says Ena Prosser, partner at Fountain Healthcare Partners. The fund, established by a group of former Elan executives, will play a key role in reversing the underinvestment in Irish life sciences over the past decade. Life sciences companies have secured just a small percentage of the €1 billion ($1.5 billion US) in venture capital investments completed during that time. "If you go across the major geographies," Prosser says, "the norm is 30 to 40% in a given market."