Biotechnica Press Conference in Göttingen

Innovative medications and diagnostic procedures, as well as new raw materials for chemicals, pharmaceuticals, food and cosmetics boosted growth in Germany’s biotech sector by around nine per cent last year. “This is the clearest signal that the biotechnology industry in Germany has become established as a relevant economic sector,” said Viola Bronsema, Managing Director of BIO Deutschland. At the trade press conference that took place at the beginning of June in Göttingen during Biotechnica, Europe’s largest biotechnology trade fair, Bronsema explained details of a study recently published by biotechnologie.de, which was commissioned by the German Federal Ministry of Education and Research. According to this study, turnover in the biotechnology sector increased to 2.4 billion euro in 2010 (2009: 2.2 billion euro).

“The sector is not only growing, it has also become more mature,” Bronsema underlined. She pointed out the emerging trend towards consolidation: large companies provide start-up support to the foundation of new companies; smaller companies are taken over as a unit in established firms or are run as independent firms as part of a holding company’s portfolio.

However, Bronsema also reiterated at the press conference that the biotechnology sector in Germany urgently needs a more innovation-friendly climate of economic policies, pointing out that this would require German tax policy to allow for clear incentives for investments in research and development, rather than discriminating against such investments in small and medium-sized enterprises as compared with large companies. She said that equity capital investors such as business angels and venture capital firms, which fund the majority of medicine developers’ R&D activities in the biotech sector, must be attracted to innovative companies in particular by options for loss carry-forward irrespective of earnings and tax breaks for reinvestments (rollover). Bronsema explained that loss carry-forward must be possible without restrictions for small and medium-sized enterprises that conduct research, and that minimum taxation must be abolished or shaped in a way conducive to innovation.

“The sector does not need subsidies. It has proved that it is in a position to be innovative without support and to grow, despite the crisis of the past years.” However, Bronsema concluded by emphasising that an economy like Germany’s cannot afford to neglect innovative small and medium-sized enterprises in the long term.