CFO Meeting: Biotech Finance Experts Discuss the Conditions for Innovative Small and Medium-sized Enterprises

Dirk Honold, Tomas Kahn, Manuela Habeker, Norbert Hentschel, Ursula Scheffers-Borchel and Philipp Murmann (from left to right) discussed the conditions for financing growth and innovation at BIO Deutschland’s CFO Meeting.

Around 80 finance experts from the biotech scene recently discussed the current financing situation for innovations in Germany at the seventh biotech finance meeting, which was organised by BIO Deutschland and took place in Berlin. Finance was up by over 50 per cent in 2012 compared with the previous year, from some €142 million in 2011 to €300 million in 2012. Although this is a positive sign for the development of the sector, it does not indicate a long-term improvement in the financing situation. The conclusion of the panel discussion at the annual sector meeting was that Germany’s innovative strength is still curbed by tax discrimination against small and medium-sized enterprises and that this discrimination must be abolished so that the sector’s full potential can be exploited.

“Tax incentives for research and development (R&D) are also an important instrument as regards encouraging additional research activities. They are of particular importance to small and medium-sized enterprises. But these incentives may fail if the tax discrimination against venture capital is not abolished. This discrimination is particularly detrimental to the financing options of innovative small and medium-sized enterprises,” said Jan Schmidt-Brand, a member of the board of BIO Deutschland and co-chairperson of the Working Group on Finance and Taxation. Dirk Honold, who co-chairs the group with Schmidt-Brand, pointed out that “it is important to exploit all of the options for financing innovations in order to provide entrepreneurs with the conditions that they need to put their ideas into practice and to ensure that innovative products constantly appear on the market. The current discrimination against research-based small and medium-sized enterprises, such as minimum taxation and the tightening of the regulation on the acquisition of shell companies in the German Corporation Tax Act, is still a major obstacle that needs to be overcome.”

In addition to innovation financing, the meeting agenda included the topic of how staff can participate in a company’s success through employee share ownership models. Selected biotech companies also provided an exclusive insight into the history of their financial development.

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