Press Releases 2007
26 November 2007
Board Meeting of the Biotechnology Sector:
- Good Prospects for Biotechnology Companies
- Investments in Biotechnology Are Better than Government Bonds
Berlin (26.11.2007) - “There is a better return on investment in biotechnology than in government bonds,” said Andreas Burkhardt, a capital markets expert for life sciences from the WestLB AG. Mr Burkhardt was speaking to an audience of more than 100 board members and managing directors of biotechnology companies at an event held at the Ninth Biotechnology CEO and CFO Conference, which took place in Ludwigsburg, Germany, from 22 – 23 November. He added that in the past five years and with an average of 12%, the development of the representative WestLB Biotech Index Top 20 has been better than that of a German state security.
Professor Dirk Schiereck, lecturer in banking and financial management at the European Business School in Oestrich-Winkel, Germany, said that there were psychological causes for the current rather bad atmosphere in the biotechnology market: “Analysts think that bad news is twice as important as good news.” Schiereck explained that the quality of communication has an effect on the value of a company, particularly that of small companies.
Dr Peter Heinrich, Spokesman of the Board of the Trade Association, BIO Deutschland, which organises the annual conference, praised the commercial strength and stamina of the leading figures in the sector: “The biotechnology industry, in cooperation with the pharmaceutical and chemical industries, will definitely make a significant contribution to dealing with future tasks in our global world.” He warned that none of this would be possible without considerable support from politicians and society. “We need politicians who are well-versed in future technologies and who also champion progress.”
In addition to the conference lectures, more than 60 company presentations gave participants the chance to learn about details of business models and the latest sector-specific developments.
The conference, which was kindly sponsored by the WestLB as the main sponsor and by Hill & Knowlton Communications, was held at the Schlosshotel Monrepos in Ludwigsburg near Stuttgart.
7 November 2007
Statement by the Biotechnology Trade Association on the Law on Genetic Testing: Good Family Relations Must Be the Main Focus
Berlin (7.11.2007) -The Biotechnology Industry Organisation of Germany (BIO Deutschland) has spoken out in favour of maintaining good relations within the family in response to today’s expert hearing on the Law on Genetic Testing at the Bundestag.
The industry association of the biotechnology sector fundamentally welcomes the proposal to legally regulate human genetic testing. However, in the paper submitted by the political party, Bündnis 90/Die Grünen, there is a contradiction in the section on “genetic analyses used in the clarification of parentage”, which could play a particularly important role in family relations; on the one hand, it is stipulated that only the consent of the possible father and the child, and not that of the mother, is required to ascertain paternity; on the other hand, the draft law stipulates that the mother can decide for the child in the case of minors who are “not capable of consenting”. The mother can therefore oppose the wish to clarify parentage in most cases. As a result, the paternity test can be carried out by a court order.
On response, BIO Deutschland calls for the protection of existing family relations and the avoidance of additional court and administration procedures by allowing the genetic analysis used for the determination of parentage to be commissioned without the consent of all parties of father, mother and/or child. The current draft law should take into account the need for doubt about the parentage of a child to be clarified in a discreet way that is not detrimental to the personal relationships of those involved. BIO Deutschland’s document concludes with a statement that the institutions of marriage and the family should be protected and the personality rights of the parties concerned be maintained.
10 October 2007
Biotechnology Industry Association Success Story
- New Board for BIO Deutschland
- Dr Peter Heinrich is Re-Elected as Chairman of the Board
Berlin (10.10.2007) - During its Fourth Ordinary General Meeting held during Biotechnica, the international convention of the biotechnology sector in Hanover, the Biotechnology Industry Organisation of Germany (BIO Deutschland) gave an extensive report on its activities, presented its future planned areas of activity and elected a new board.
The ten board members represent the different areas of the innovative biotechnology small and medium-sized enterprises and the BioRegions:
• Professor Horst Domdey, Managing Director of Bio® Biotech Cluster Development GmbH, Martinsried
• Dr Peter Heinrich, CEO of MediGene AG, Martinsried
• Norbert Hentschel, Commercial Chief Executive of Miltenyi Biotec GmbH, Bergisch-Gladbach
• Dr Jens Katzek, Managing Director of BIO Mitteldeutschland GmbH, Halle
• Peter Pohl, CEO of GATC Biotech AG, Konstanz
• Professor Felicia Rosenthal, Managing Director CellGenix Technologie Transfer GmbH, Freiburg
• Dr Jan Schmidt-Brand, CEO of Heidelberg Pharma AG, Ladenburg
• Dr Marlies Sproll, Chief Scientific Officer of MorphoSys AG, Martinsried
• Dr Rainer Wessel, CEO of GANYMED Pharmaceuticals AG, Mainz
• Professor Olaf Wilhelm, CEO of Wilex AG, Munich
Dr Peter Heinrich was confirmed as Chairman of the Board and Professor Felicia Rosenthal was re-elected as Treasurer.
The new board will take up its duties on 1 January 2008. From this time on, Dr Uwe Maschek, Chairman of the Board of MagForce AG, and Andreas Mietzsch, Chairman of the Board of BIOCOM AG, will no longer belong to the new board. BIO Deutschland thanks them for their constructive work and their exemplary commitment to the association.
The core activities of the past year were the representation of the interests of innovative small and medium-sized biotechnology enterprises in the legislation on the Corporate Tax Reform, the amendment of the Law on Genetic Engineering, problems of unfair competition within the biotechnology sector and the Law on the Modernisation of Conditions for Capital Investments. In 2008, BIO Deutschland will continue to lobby for the improvement of conditions for innovative small and medium-sized enterprises, both in Germany as well as in Europe (BIO Deutschland is the German member association of the European group that represents the interests of the biotechnology sector, EuropaBio). Further activities will include the reduction of bureaucracy and the standardisation of patent law, licensing issues and clinical studies, as well as the further development of contacts with other international biotechnology associations. In addition, the association will continue to organise events that support the exchange of innovative ideas and the promotion of trade. Furthermore, the association was able to announce a continued steady increase of 48 companies in its number of members, from 122 members in October 2006 to a current membership of 170.
Dr Peter Heinrich, Chairman of the Board of BIO Deutschland, thanked the working groups for the significant input of their expert knowledge in the preparation of position papers and statements on topics relevant to the sector, as well as the board for its constant efforts on behalf of the biotechnology industry. In conclusion, Heinrich strongly emphasised the high value that the support of all members, especially that of the 12 supporting members, has for the association’s activities in the improvement of conditions for this future-oriented sector.
Dr Viola Bronsema, Managing Director of BIO Deutschland, said that she was confident that the targets for the coming 12 months would be met: a further increase in the number of association members; continuing commitment to the establishment of political, social and economic conditions in the interests of innovative small and medium-sized biotechnology enterprises; making German biotechnology more international; and creating forums for business contacts and the exchange of new ideas.
20 August 2007
Germany’s Biotechnology Industry Organisation Asks the Federal Government to Give Greater Support to Innovative Small and Medium-Sized Enterprises
Current Legislation is a Threat to the Future of the Biotechnology Sector.
Berlin (20.8.2007) - “The biotechnology industry in Germany currently finds itself confronted with a deluge of planned legislation that will prevent the development of an industrial sector which is strong in global competition,” said Dr Peter Heinrich, Chairman of the Board of the trade association, BIO Deutschland, in a press conference held today on the risks facing the biotechnology branch. Dr Heinrich noted that the improvement of conditions is an important prerequisite for encouraging innovation, for example in the areas of medicine and environmental protection.
Not only the Fourth Amendment to the Law on Genetic Engineering, which was recently approved by the Cabinet, and the deadline regulation in stem cell research, which is still restrictive and scientifically unsatisfactory in comparison to other countries, but also the Corporate Tax Reform and the Law on the Modernisation of Conditions for Capital Investments, represent a massive threat to the development of innovative small and medium-sized companies and weaken their position on international markets.
On the subject of venture capital, Rolf Mathies, Managing Partner of the Hamburg-based venture capital company, Earlybird, said that with the new law, the government was weakening the connection between entrepreneurial activities and high-level research. “The biotechnology industry is one of the most research-intensive sectors that exist. A law that makes investments in research unprofitable is not in the spirit of the High-Tech Strategy approved by the Federal Government, which aims to develop Germany as a top location for innovation.”
“Tax breaks for innovative technology companies that use a high percentage of their expenditure for research and development, as is already the case in many European countries, would be a step in the right direction,” said Professor Olaf Wilhelm, Chairman of the Board of the Munich-based listed company Wilex AG. On the contrary, the Federal Ministry of Finance’s Draft Law on the Modernisation of Conditions for Capital Investments envisages as “target companies” worthy of support with venture capital only those firms that have less than 20 million euro worth of company capital and which were founded less than ten years ago. Wilhelm pointed out that companies that develop drugs – the majority in the biotechnology sector – usually have a lengthy and large need for capital, which may be accrued in a series of finance stages and often runs into double figures of millions of euro.
Dr Rainer Wessel, Chairman of the Board of Ganymed Pharmaceuticals AG from Mainz added: “The government should create opportunities for the unrestricted and open-ended use of deficit carried forward by innovative technological companies and all investments in this type of firm.” He added that it was important to change the planned investment regulations and explained that a rigid investment level of 70% would swiftly lead to a threat to venture capital investment companies and their investors. Because of the nature of a typical investment agreement, this could only drop below 70% for a limited period. In addition, the planned minimum fragmentation limit represents an inappropriate disadvantage to small private investors, without actually serving to protect these investors.
Dr Heinrich added that biotechnology is one on the most important key technologies and promoters of innovation for this century and helps to lay the foundations for a sustainable economic upturn. With growth rates of 15 – 20 percent worldwide, it is one of the largest growth engines for both the labour and the capital market. Innovative biotech agents already account for 27 percent of worldwide medication research and 10 percent of the worldwide medication turnover. In conclusion, Dr Heinrich stated that the continued existence of an innovative and promising industrial branch could only be guaranteed by the improvement of its conditions.
14 August 2007
Germany’s Biotechnology Industry Organisation Appeals to Chancellor Merkel about the Lack of Capital in Small and Medium-Sized Biotechnology Enterprises
The Federal Ministry of Finance Is Drafting a Law that Ignores the Reality of Innovative Small and Medium-Sized Companies
Berlin (14.8.2007) – In a letter to the Chancellor of the Federal Republic of Germany, Angela Merkel, the biotechnology industry has appealed for the “support of talented young people in their efforts to link entrepreneurial activities with high-level research.” Dr Peter Heinrich, Chairman of the Board of the trade association, BIO Deutschland, wrote to the Chancellor with regard to the forthcoming Cabinet meeting on the Draft Law on the Modernisation of Conditions for Capital Investments. Furthermore, the letter from Heinrich, a businessman and CEO of MediGene AG in Martinsried, stated that this was the only feasible way that innovation could be developed in, for example, the fields of medicine and environmental protection.
The criteria envisaged in the Federal Ministry of Finance’s Draft Law on the Modernisation of Conditions for Capital Investments for firms deemed worthy of investment are not relevant to the reality of innovative small and medium-sized enterprises. According to the draft, “target companies” worthy of support with venture capital will be only those firms that have less than 20 million euro worth of company capital and which were founded less than ten years ago. Companies that develop drugs – the majority in the biotechnology sector – usually have a long-term and large need for capital. Along with this need for capital, there is also a huge development risk and a series of financial stages that often run into double figures of millions of euro. As a result of the restrictions planned by the Federal Ministry of Finance, innovative small and medium-sized enterprises and their investors could be dropped from the system with immediate effect because the size of company capital and the ownership structure are constantly changing according to the status of funding and research.
In Heinrich’s opinion, the scope of activities for innovative companies and incentives to invest can only develop if the government creates opportunities for the unlimited and open-ended use of deficit carried forward by innovative technological companies and all investments in this type of firm. (Biotechnology companies doing research…VENTER)Researching biotechnology companies rely more on venture capital than (do) firms from other branches (do). Germany has still not managed to support the development of innovative small and medium-sized enterprises with tax relief, as is common in other European countries.
24 July 2007
Germany’s Biotechnology Industry Organisation Opposes the Political Compromise on the Law on Genetic Engineering
Politicians Are Preventing the Development of Innovative Small and Medium-Sized Enterprises in the Area of Plant Biotechnology
Berlin (24.7.2007) – The industry association of the biotechnology sector, BIO Deutschland, has declared itself to be staunchly opposed to the Federal Ministry of Agriculture’s plans to tighten conditions in plant biotechnology, which were presented at a press conference in Berlin today.
Horst Seehofer, Federal Minister of Agriculture and Ulrich Kleber, Deputy Chairman of the SPD in the Bundestag, presented the political agreement on the Amendment of the Law on Genetic Engineering to some (about VENTER) 50 journalists today. “As a result of this law, the CDU/CSU and the SPD will de facto prevent plants cultivated by biotechnological methods from being grown in Germany and are forming a political front against innovation in this area,” said Dr Peter Heinrich, Chairman of the Board of BIO Deutschland and CEO of MediGene AG in Martinsried. He noted that it was easy to draft laws and regulations so that they excluded as many people as possible and let the smallest number possible participate. Thus, Heinrich continued, Seehofer was harming innovative small and medium-sized enterprises in Germany. “The more complex and time-consuming the regulations are,” Heinrich said, “the more likely it is that in particular local, and especially small companies will not stand a chance on the market.”
“Distance, transparency and liability regulations, as they have been suggested in the draft of the amendment law presented today, do not make coexistence possible, but rather prevent it, because they stigmatise research applications,” Heinrich commented on Seehofer’s remarks. (As a result) “The promotion of research is useless as a result because it is only the application (in practice/utilisation) that turns a scientific finding into an innovation that is ‘made in Germany’.”
In the Amendment of the Law on Genetic Engineering, which will be passed by the Cabinet at the beginning of August, Seehofer plans to create so many barriers for farmers and seed breeding companies that they will scarcely be able to further the development of this future-oriented technology. The distance between fields of plants bred by genetic engineering and those farmed organically, which the Ministry had initially set at 150 metres, is now to be 300 metres. In addition, one of the provisions of the new law is that anyone who wishes to farm plants bred by genetic engineering will have to seek an agreement with his neighbour on the distance between the fields. If the neighbours reach an agreement, this must be presented in written form. “This is an incredibly complicated procedure, bearing in mind that practical experiences in the farming of genetically modified crops have been gained worldwide during the past ten years on over 550 million hectares to date,” stated Dr Jens Katzek, Member of the Board of BIO Deutschland. At the same time, he continued, the political compromise does not send any signal whatsoever to those who destroy fields. “These people will still be able to destroy farmers’ livelihoods in the future without having to face serious consequences,” he said.
In this way, the Minister and his supporters are making the same mistake that Germany made in medical biotechnology during the 1970s and 1980s: in 1978, the first human insulin was produced by biotechnological means in a laboratory and was already launched on the US market in 1982. It was of benefit to patients, who had access to a medication that caused fewer side effects, but Germany blocked the new technology for 20 years. It was only in 1998 that the first human insulin production plant began operation near Frankfurt under what was then the chemical concern Hoechst. To date, innovative German biotechnology small and medium-sized enterprises have not been able to close the gap with the more technology-friendly countries.
23 July 2007
The Public Do Not Accept Dogmatic Wars
BIO Deutschland and the Federal Association of German Plant Breeders (BDP) Condemn the Destruction of Fields
Berlin/Bonn (23.7.2007) – The industry association of the biotechnology branch, BIO Deutschland, and the Federal Association of German Plant Breeders (BDP) do not accept the destruction of fields of genetically modified (GM) corn in Oderfeld at the weekend. Causing damage to other people’s property or inciting others to do so is punishable by law. “It appears that there is a double standard in Germany,” said Viola Bronsema, Managing Director of BIO Deutschland, “when on the one hand, politicians insist on stricter legislation for users of biotechnology, while at the same time the prosecution of the illegal actions of opponents of technology does not seem to be a real deterrent.” The Director of the BDP, Ferdinand Schmitz, added, “The public calls to destroy fields must be put to a stop. Freedom of speech does not give these perpetrators the right to put farmers and their families under pressure like this and to destroy their source of income.” In the final analysis, the products in question have been tested and licensed all over Europe by more than 50 public bodies.
At the same time, Bronsema and Schmitz regard the strong condemnation of the criminal actions by the local population as a positive signal. People recognise that this type of altercation leads to a dead end, especially because the opponents of genetic engineering do not seem to be interested in serious and solution-oriented discussions. According to statements by local residents, this was proved once again by the actions of some 250 opponents of genetic engineering in Altreetz (Brandenburg) on Sunday. Despite temporary injunction orders against individual activists, the demonstrators stormed and destroyed nearby GM cornfields. A game of cat and mouse with 500 police officers ended with 66 arrests and almost 3000m² of damaged area.
The two managing directors demanded that it must be possible for innovative companies and farmers in Germany to plant GM crops that are ready for the market and have tested as being safe, without fear of reprisals. Only in this way, could they remain internationally competitive and strengthen Germany as an economic location. Bronsema and Schmitz appealed to the responsible authorities to call alleged offenders consistently to account.
17 July 2007
Statement by Germany’s Biotechnology Industry Organisation on the Amendment Announced on the Stem Cell Law.
“We need competitive research in Germany.”
Berlin (17.7.2007) – The industry association of the biotechnology sector, BIO Deutschland, welcomes the rekindled debate on an amendment of the Stem Cell Law, following a statement yesterday by the German National Ethics Council. The current permissible use of stem cell lines that were created before 1 January 2002 only permits pure research in a very limited form. Moreover, these stem cell lines are not suitable for therapeutic applications to human beings because of impurities and genetic changes resulting from the culture duration, as well as for other reasons. A particular problem for German stem cell researchers is that they can be liable to prosecution if they participate in projects abroad where more recently created embryonic stem cell lines are used, which is not permitted under German law.
Professor Felicia Rosenthal, Member of the Board of BIO Deutschland and CEO of CellGenix GmbH in Freiburg commented: “Because of these factors, a redrafting of the Stem Cell Law and an amendment of the cut-off date regulation have been urgently needed for a long time now. We need competitive research in Germany so that we do not lose the opportunity to be part of the leading research.”
Background information: In its last statement before the organisation was dissolved, the majority of the members of the German National Ethics Council spoke out in favour of relaxing the Stem Cell Law. On 16 July 2007 in Berlin, the board recommended that the hitherto existing cut-off date regulation, whereby only stem cell lines created before 2002 could be used, should be replaced by a “practical and reliable assessment on a case-by-case basis”. This would also mean that relevant regulations for the import and use of stem cells could safeguard what the law aims to protect, namely to avoid an impetus to manufacture embryonic stem cells emerging from Germany. Apart from use in research, the use in diagnosis and treatment should also be permitted in the future, according to 14 of the 24 Council members.
Various politicians from all parties commented on yesterday’s statement by the Ethics Council. A Bundestag debate on the topic has been announced for the period following the summer recess.
27 June 2007
Germany’s Biotechnology Organisation Comments on the Report on Germany’s Technological Performance Rate and Supports the Promotion of Companies’ Innovative Activities.
Berlin (27.6.2007) - The industry association of the biotechnology sector, BIO Deutschland, welcomes the decision by the German Federal Ministry of Education and Research to take concrete action in the near future on the results of the latest Report on Germany’s Technological Performance Rate. The Ministry is inviting representatives from different branches to an interdisciplinary discussion on the main recommendations of the report and its consequences. The lack of skilled staff, state funding for research and development, and tax conditions will be the main topics on the agenda.
Dialogue between representatives from the ministries and the commercial sector can make a significant contribution to ensuring the future-oriented capacities of innovative small and medium-sized enterprises. The German Federal Ministry’s report, “Development of Venture Capital – Reduction of the Risks Involved in Financial Investments”, provided a largely accurate analysis of the current situation in Germany – however, the suggested consequences were not sufficiently far-ranging. It is to be hoped that the implementation of comments from other ministries and trade associations on the Finance Ministry’s suggestions will lead to a draft law that will actually improve the conditions for providers of venture capital and thus make investments in innovative companies more attractive. Young, innovative companies, who have been those most severely affected by the Corporate Tax Reform, would then no longer have to worry about their survival in the future.
Biotechnology is one of the most important future-oriented sectors in Germany and is mainly characterised by innovative small and medium-sized enterprises. These companies invest in R&D and thus create high-value jobs. However, many laws currently make the application of these R&D activities to marketable products difficult, for example, the recently approved Corporate Tax Reform and the Law on Genetic Engineering. In its position paper, BIO Deutschland clearly states that the interests of innovative small and medium-sized enterprises in Germany, as well as those of farmers and seed manufacturers who use new farming and cultivation techniques, must also be taken into account in the Amendment of the Law on Genetic Engineering.
The aim must always be to actively search for opportunities to support German innovative small and medium-sized enterprises that face a high commercial risk.
5 June 2007
Germany’s Biotechnology Organisation Attends the Environment Week at Bellevue Palace
Clean Bill of Health for Biotechnology – Sustainability and Innovative Environmental Technology
Berlin (5.6.2007) - The industry association of the biotechnology sector, BIO Deutschland, is organising a forum on biotechnology’s contribution to environmental protection at the Third Environment Week, which will be held in the gardens at Bellevue Palace in Berlin, the seat of the German Federal President.
In an event called “Clean Bill of Health for Biotechnology – Sustainability and Innovative Environmental Technology”, five experts invited by BIO Deutschland will speak about the applications of biotechnology in everyday life: in washing powders, food, and as a supplier of new types of drugs and innovative cosmetics, among other things. The idea is to give the some 10,000 expected visitors, including representatives from trade, politics, science and society, an opportunity to learn about one of the most important future-oriented technologies for the 21st century.
The panel discussion will be chaired by Andreas Mietzsch, Member of the Board of BIO Deutschland, editor of the journal transkript, and Chairman of the Board of BIOCOM AG. The panel members are:
- Professor Birgit Kamm, Director of the Bioaktive Polymersysteme Research Institute
- Dr Manfred Kircher, CEO of Cluster Industrielle Biotechnologie e.V. and Degussa AG Creavis Corporate Venture
- Dr Roland Schröder, Director of WRS Sustainability, Henkel KGaA
- Dr Günter Wich, Director Biotechnology Corporate R&D, Wacker AG
- Dr Holger Zinke, CEO of B.R.A.I.N. AG
This is the third time that the German Federal President, Horst Köhler, has invited the best companies and institutions to give presentations on innovative environmental protection technologies and projects. The event is co-organised by the Federal President’s Office and the German Federal Environmental Foundation. Starting today, more than 180 exhibitors will present their innovations in the gardens at Bellevue Palace. In addition, visitors will also have the opportunity to listen to a wide-ranging programme of lectures and discussions on the main stage and in the various specialist forums. An extensive series of lectures with more than 200 presentations will complete this attractive programme. By the way, BIO Deutschland’s forum will be held on the 100th birthday of the well-known washing powder, Persil, which was launched on the market on 6 June 1907 and has provided a biological wash with the active help of enzymes since 1969.
4 June 2007
Statement by Germany’s Biotechnology Organisation on the Conference on the European Charter for Small Enterprises
Small Enterprises Are the Driving Force for Innovation and Employment in Europe
On the occasion of the fourth Conference on the European Charter for Small Enterprises, the industry association of the biotechnology sector, BIO Deutschland, has emphasised the necessity of supporting innovative small and medium-sized enterprises in order to develop Germany and Europe further as business locations. In particular, the planned Law on Venture Capital Investment must be formulated in the interests of innovative German small and medium-sized enterprises.
The hosts of the conference on 4 and 5 June are Michael Glos, Federal Minister of Economics and Technology, and the European Commission (Directorate on Enterprise and Industry). The German Federal Ministry of Economics and Technology set up a Department for Technology Policy at the end of May, which will also deal with the areas of biotechnology and genetic engineering. This new department already started work on 1 June and reports to the Secretary of State, Dr Joachim Wuermeling.
With the transformation of the existing Corporate Investment Law into the Law on Venture Capital Investment, the German Federal Ministry of Economics and Technology is lending support to a general law on business locations. The German Federal Minister of Economics, Michael Glos, is seeking to have exceptions for recently established companies included in the text of the law in order to ensure Germany’s competitiveness as a business location. BIO Deutschland also urges that the law be better adapted to the reality of innovative German small and medium-sized enterprises.
Commenting on the background of the conference, Dr Peter Heinrich, Chairman of the Board of BIO Deutschland and CEO of MediGene AG., said: “As the main providers of jobs and a breeding ground for business ideas, innovative small and medium-sized enterprises form the backbone of the European economy. BIO Deutschland will actively support the implementation of the charter’s aims in the biotechnology branch.” On the subject of tax, Heinrich added, “According to the charter, the tax system should be restructured so that performance is rewarded, the setting up of companies is facilitated, and the growth of firms and the creation of jobs are supported. BIO Deutschland warmly welcomes the efforts of the Ministry of Economics and Technology to achieve these aims for innovative small and medium-sized enterprises.”
The conference will deal with the improvement of the business environment and will offer individual action areas. 300 – 400 representatives from more than 40 countries are expected, including multipliers, representatives from small and medium-sized enterprises, and staff from public bodies from the EU and its associated countries who wish to improve the political environment for small enterprises.
According to the latest survey of biotechnology companies, which the information platform biotechnologie.de carried out on behalf of the German Federal Ministry of Education and Research, there are around 500 biotechnology companies in Germany. These have seen an increase of 9% in the number of employees, bringing the total number employed to some 14,100. Moreover, the importance of biotechnology also increased in companies where this technology accounts for only a part of the business: a total of 56 companies of this type, which mainly include pharmaceutical and chemical firms as well as seed producers, saw an increase of 36% in the number of employees in the biotechnology area to 15,000 people in comparison with the previous year. This means that around 29,000 people were employed in commercial biotechnology in 2006, an increase of 22%. Together, all these companies had a turnover of around 1.8 billion euro in 2006 (an increase of 14%). There was an even greater increase in expenditure on research and development: companies invested more than 970 million euro in their R&D activities, 36% more than in 2005. A third of the companies also received private finance from providers of venture capital and seven companies in total were newly listed on the Stock Exchange. The Biotech Report by Ernst & Young also recognised positive trends in the biotechnology sector. However, the consultancy’s analysis showed that the financing of private companies with venture capital sharply decreased last year.
25 April 2007
Germany’s Biotechnology Organisation Hosts a Finance Forum
The First German Biotech Finance Summit Opens in Berlin Today
Berlin (25.4.2007) – The first German Biotech CFO Summit will be opened this evening with a reception in the Deutsche Bank’s Berlin office. The one-day forum on 26 April will bring together some 90 experts from the financial sector of the biotechnology branch who will exchange views in panel discussions and lectures. Topics will range from the valuation of companies for sale and on the capital market to the area of investment versus profit expectation, and to the conditions and the use of alternative finance methods.
The CFO summit has been organised by the trade association of the biotechnology sector, BIO Deutschland, and its Working Group on Finance and Taxation, which is coordinated by Professor Dirk Honold, Acting CFO of B.R.A.I.N. AG in Zwingenberg and Dr Jan Schmidt-Brand, CEO of Heidelberg Pharma AG in Heidelberg. The event is supported by the gold sponsors, CMS Hasche Sigle, Deutsche Bank, Kaye Scholer, MorphoSys and SAP, and the silver sponsors, Ernst & Young and KPMG.
Commenting on this new event, Dirk Honold said, “We are very pleased to be able to offer the biotechnology sector this platform for the first time. With regard to the effects of the planned Corporate Tax Reform of 2008 and the current state of affairs in the finance markets, it is important and essential that our innovative sector talks openly and productively about future challenges.” Jan Schmidt-Brand added, “In the past years, our sector has reached a leading position in worldwide competition. It is now more important than ever to carry forward this positive development by having the right sort of conditions.”
7 February 2007
Germany’s Biotechnology Industry Association Rejects Draft Law: the Tax Reform Harms Innovative Small and Medium-Sized Enterprises
Berlin (7.2.2007) - The industry association of the German biotechnology branch, BIO Deutschland, opposes the significant burdens placed on the financing of new, innovative companies according to the draft of the Corporate Tax Reform. The draft contains regulations that will make it more difficult to write off deficits, which will penalise corporate risk-taking even more than has been the case to date. The planned flat-rate withholding tax will place an additional burden on the climate for private investments in innovative companies in Germany. Small and medium-sized enterprises that invest in innovations create high-quality jobs. However, they need a large amount of capital spread over a long period for their product development. This need is primarily fulfilled by equity and venture capital. Increasing the tax burdens for these companies and their investors threatens the survival of innovative small and medium-sized enterprises in Germany.
As well as decreasing corporate taxation in general, the Corporate Tax Reform plans tax measures for mutual financing. In the current draft, it is suggested that the Law on Corporate Tax (§8 paragraph 4 EStG) be changed so that, for example, most biotechnology companies can only carry forward their deficits either in a restricted way or not at all. When companies finally start making a profit after many years of investment in research and development, the tax burden makes further growth difficult. The association of the German biotechnology branch, BIO Deutschland, therefore demands that innovative companies be allowed to carry forward deficits without being subject to restrictions. Moreover, as the association emphasises, it is time to amend the Income Tax Law so that investors in new, innovative companies are rewarded. Investors should be allowed to offset losses resulting from investments in innovative companies or related funds without being subject to restrictions.
However, according to the draft, German investors in innovative companies should face further tax burdens in the future. Apart from introducing stricter regulations on the carrying forward of deficits, the German Federal Government is planning to introduce a general flat-rate withholding tax: from 2009, more than 25% of interest, dividends and profits from speculation are to be forwarded automatically and anonymously by the banks to the Tax Office. As a result of this measure, equity capital will be taxed far more highly than outside capital. Experts expect a maximum tax burden of over 50% in some cases. This could further worsen the climate for private investments with equity capital in Germany. Innovative companies will be particularly badly affected because they are usually financed almost exclusively with equity capital and their access to outside capital is generally closed.
“The flat-rate withholding tax is harmful to innovative small and medium-sized enterprises because of its high tax burden, which is not acceptable in comparison with international standards,” said Dr Peter Heinrich, Chairman of the Board of the trade association, BIO Deutschland. “Capital investors are attracted to innovative companies by the prospect of capital gains rather than dividends.” However, capital gains will be particularly affected by the new flat-rate withholding tax. Heinrich added, “The possibility of constitutional legal problems also arises when the financing of established companies with equity capital is subject to a massive tax disadvantage in comparison to investments of outside capital.” This would increase the threat to the survival of small and medium-sized enterprises, as follow-up financing will become far more difficult. The threat of insolvencies would start a negative chain-reaction, which would affect other companies.
New innovative small and medium-sized biotechnology enterprises in Germany depend on good conditions for investments of equity and venture capital. In comparison with other European countries, Germany is already on the low place of no. 20 in a ranking of investments in innovations (KPMG, European Private Equity & Venture Capital Association (EVCA), December 2006). A further worsening of conditions would pose a threat to the survival of the entire branch. Biotechnology is one of Germany’s most important future-oriented branches and is supposed to be one of the main sectors to be promoted by the government’s high-tech strategy. In support of this, the association BIO Deutschland published a position paper on the topic of finance and tax on 30 November 2006, in which one of its demands is improved tax offsetting of losses for investors.
18 January 2007
ISAAA Study on the Applications of Plant Biotechnology in Agriculture Is Now Available
International Study Reveals Spain’s Pioneering Position in the EU – BIO Deutschland Once Again Demands a Rapid Amendment of the Genetic Engineering Law
Berlin (18.1.2007) – The non-profit organisation, the International Service for the Acquisition of Agri-biotech Applications (ISAAA), announced today that plant biotechnology is increasingly being used worldwide and that its use leads to increased yields in the production of food, animal feed, materials and fuel and is therefore beneficial to farmers, seed producers and consumers. This was revealed by the results of a ten-year study by the ISAAA, which was sponsored by the Rockefeller Foundation, a US-based non-profit organisation, and the Spanish bank Ibercaja, among others. With regard to this study, the trade association of the German biotechnology branch, BIO Deutschland, repeated its demand for a swift redrafting of the Genetic Engineering Law in order to make Germany more competitive. Jens A. Katzek, a board member of the association, stated, “Innovations can only develop sustainable applications in Germany if they are not subject to excessive regulations.” Politicians such as Ulrich Kelber from the SPD, who are blocking the passing of necessary improvements to the law by haggling over figures and wasting time, are making Germany miss the boat for once and for all in international terms, Katzek added. Kelber demanded yesterday that the minimum distance between fields with genetically modified crops and those without be doubled to 300 metres and that the threshold distance be reduced to a liability issue.
The ISAAA announced that the number of fields with plants that have been improved by genetic engineering increased by 12 million hectares to a total of 102 million hectares in 2006. This corresponds to an increase of 13 percent. The 100 million hectare figure has been exceeded for the first time and the second largest increase of the last five years was achieved. In addition, the number of farmers working with GM crops increased for the first time to more than ten million, that is, from 8.5 million in 2005 to 10.3 million in 2006. In the past ten years, more than 500 million hectares of land worldwide have been farmed with crops that have been improved by genetic engineering. This corresponds to an area the size of Europe.
The majority of the fields with GM crops are located in the American continent (USA, Argentina, Brazil, Paraguay and Canada). As shown by a study by the Joint Research Centre of the European Commission (JRC) published in December 2006, the benefit of the use of GM plants is that there are lower production costs in most cases due to savings in weed and pest control. However, the effects depend on the local natural conditions (for instance, the prevalent pest infestation) as well as on the regulatory conditions. Farmers with smaller farms and lower income seemed to experience greater effects than those with a higher income, as can be seen in cotton farming in China.
With a farmed area of 60,000 hectares in 2006, Spain remains at the top of the European scale. However, the other five EU countries saw a more than fivefold increase from 1,500 hectares in 2005 to 8500 hectares in 2006. In Germany, only a small area was planted with Bt corn. Farmers in Spain who planted corn cultivated by genetic engineering made a profit margin that was 12 percent higher than the average. This was revealed by the JRC study. However, there are also strong regional fluctuations here. Seed producers also experienced positive effects, albeit not to the same extent as farmers. It was not yet possible to estimate the economic effects of the introduction of plant biotechnology in Europe in the light of the new concept of co-existence. They depend on the concrete conditions for use and in particular on the tolerance of cultivation thresholds and liability.