Financial Experts Meet at the Biotech CFO Summit
The CFOs of the biotech sector are guiding companies through the crisis with the help of new funding models. This is the result of the fifth CFO Summit organised by BIO Deutschland, which took place at the end of March in Berlin.
Using new funding models, innovative small and medium-sized enterprises (iSME) are protecting themselves against the adverse taxation and financial policy parameters in Germany. The companies that are now making a profit are not just reinvesting in their own research and development (R&D) projects, but are encouraging the start or continuation of promising innovative approaches via models such as spin-out aid, cooperation projects or friendly takeovers.
“Nevertheless, things in the parameters for investments in iSME must urgently be changed,” urged Dirk Honold, Chairman of BIO Deutschland’s Working Group on Finance and Taxation and co-organiser of the summit. He pointed out that venture capital remains the most important source of R&D funding for most biotech companies. Honold explained that despite the fact that the amount of funding invested in biotech companies last year was twice that of the 2009 figure, most of the funds come from a few investor sources and are only of benefit to a very small number of biotechnology companies.
Jan Schmidt-Brand, a member of the board of BIO Deutschland and co-chairman of the working group, underlined the importance of a rapid improvement of the tax situation and thus the removal of the discrimination of iSME in comparison with large-scale industry that has existed since the corporate tax reform.
However, as Schmidt-Brand pointed out, German tax policy must also encourage investment in R&D in a targeted way, rather than discriminating against it in small and medium-sized enterprises. Equity capital investors such as business angels and venture capital companies should be encouraged to invest specifically in innovative firms by options such as loss carry-forward irrespective of earnings and tax incentives for reinvestments (rollover). Loss carry-forward must be made possible in researching SME and minimum taxation must be abolished or set up in an innovation-friendly way. Schmidt-Brand also advises politicians to urgently put the introduction of R&D tax incentives back on the agenda. European regulations such as the AIFM Directive should also be closely inspected in terms of their impact on the growth funding of iSME and subsequently adjusted where necessary.
The forum, which is known in the sector as the Biotech CFO Summit, brings over 90 experts from the financial sector of the biotechnology industry together. Topics discussed at panel discussions and lectures included the currently necessary alternative funding models for innovative companies and various strategies shown by the examples of successful company transactions.
The programme content of the CFO summit is organised by BIO Deutschland’s Working Group on Finance and Taxation, which is chaired by Dirk Honold, BRAIN AG, and Jan Schmidt-Brand, a member of the board of BIO Deutschland and CEO/CFO of Heidelberg Pharma AG. This year’s event was generously sponsored by Deutsche Bank as a platinum sponsor and the gold sponsors, Avia, Chubb, CMS Hasche Sigle, KPMG, Pricewaterhousecoopers and SAP.