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BIOTECHNICA: The German Biotech Sector: Status Quo and the Latest Trends


6/18/2013 10:09:37 AM

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Berlin/Hannover. There are many ways to assess the condition of a business sector. The number of companies and employees, revenues and investments are all important indicators for evaluating how the German biotech industry is faring. Biotechnologie.de and Ernst & Young have been regularly collecting the statistics that provide us with these indicators for several years. BIO Germany and |transkript also check out the state of the industry their annual trend report. The indicators in the different reports vary, and the study authors do not always arrive at the same conclusions. However, the overall summary is positive: the industry is doing well considering the circumstances.

The number of active biotech firms, both dedicated and non-exclusive (more than 600 according to biotechnologie.de) and the number of employees (biotechnologie.de reports more than 35,000) rose slightly. Revenues rose strongly compared with the previous year (between 4% and 7% depending on the report). The German biotech sector has come through the financial crisis well. Companies themselves are also satisfied with their business (trend report).

The field of red biotechnology, covering medical treatment and diagnostic methods, is the largest sector in the industry and registers the highest revenues despite having few current drug candidates. Germany ranks second worldwide after the USA in terms of production. In Europe, German biotechnology is leading in the fight against cancer. In white (industrial) biotechnology, Germany is also very successful from an international perspective, with innovative solutions that strongly contribute to a broad societal transition to a sustainable bio-based economy.

So what could be better? The persistent trend since 2008 towards reduced R&D spending (-4% or -7% compared with the previous year) continues. Increased revenues can therefore be ascribed less to the development of new products, than to expanding service activities that are enabling companies to create a relatively stable income stream. The trend report published by BIO Germany and |transkript indicates a slightly higher willingness to invest in research and development. The biggest problem here lies in accessing funding. Although there is an urgent need for more investment in research and development, new financing models are needed, now that venture capital is almost inaccessible in Germany, unlike in the USA. The few real success stories in German biotech are indebted to private investors and family offices, financing models that cannot be extended to the sector as a whole. Small and medium-sized companies need better conditions for accessing affordable credit and fresh capital, in order to continue with innovative research and development. This situation calls for political action at both European and national levels. According to the trend survey by BIO Germany and |transkript, what constitutes the biggest source of dissatisfaction for CEOs is their view of the current and future political framework. Tax incentives for innovative research companies are desperately needed to increase investments in research and development, as well as funding for individual projects, changes in the fiscal rules for carrying forward losses, and changes in the equity ratios required for bank credit. These measures would support increased investment in research and development and keep Germany at the forefront of innovation.

About BIO Germany:

Germany's biotechnology industry organization (BIO Germany) has more than 300 member companies and organizations, and pursues the goal of supporting and promoting the development of an innovative industry branch in Germany based on modern biological sciences. Dr. Peter Heinrich is the Chairman of the Board of BIO Germany. For further information visit: www.biodeutschland.org

BIO Germany supporting members and partners are:

Boehringer Ingelheim, Celgene, Clariant, CMS Hasche Sigle, Deutsche Bank, EBD Group, Ernst & Young, KPMG, Merck Serono, Miltenyi Biotec, PricewaterhouseCoopers, Roche and Sanofi.

Contact:

BIO Germany

Dr. Claudia Englbrecht

Am Weidendamm 1a

10117 Berlin, Germany

Tel.: +49 30 72625-136, Fax: -138

E-mail: englbrecht@biodeutschland.org

Website: www.biodeutschland.org

Sources:

• The German Biotechnology Industry 2013, biotechnologie.de, April 2013.

• German Biotech Report 2013, Ernst & Young, April 2013

• 2013 Trends in the German Biotech Industry, 2012-2013 company survey, BIO Germany, |transkript, January 2013.

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