German biotech sector attracts record investment
German biotech firms raised more capital in 2018 than ever before. Previously unpublished figures show, according to research by the biotechnology industry association BIO Deutschland, that more than one billion euros of venture capital and other equity investment flowed into the industry, whereby particularly large inflows of capital to two companies contributed to the good overall result. A recent survey by the biotech association found that the mood in the sector is relatively upbeat. The responding companies view the current and future business situation more favourably than they did last year and intend to increase their investments in R&D and personnel.
Germany’s private biotech firms attracted €369 million in venture capital investment in 2018 (2017: €236 million). The Mainz-based immunotherapy specialist BioNTech, which announced a financing round totalling the equivalent of €225 million in January, the biggest to date in Germany, accounted for by far the largest share of new investment. Public biotech firms were able to raise some €693 million via the stock market in 2018 (2017: €352 million). The biggest contribution to this figure came from Germany’s oldest biotech company, Qiagen, which last year issued convertible bonds totalling €445 million. The antibody specialist MorphoSys made a successful debut on the US exchange Nasdaq, raising €207 million. German firms nearly doubled their equity inflows to €1.27 billion, compared to the €674 million in equity raised in the previous record year of 2017.
The majority of companies (60 percent) view their current business situation favourably, while around 50 percent anticipate an improvement this year. Some 67 percent of respondents are looking to hire more staff in the coming months, and 56 percent plan to ramp up R&D spending. Only 28 percent see the political climate for biotech firms in Germany as good, but the same percentage of respondents believe there will be improvements over last year. All indexes are up compared to last year’s survey, with an especially positive trend being seen in business situation and political climate.
Peter Heinrich, Chairman of the Board of BIO Deutschland, says: “We are pleased that the mood in the sector has improved after the turbulent political developments at the turn of 2017/18. This shows once again that companies need a stable environment in order to be able to plan effectively. The financing figures are substantial, but as gratifying as they are, it must be clear that two outlier financings contributed to the good result. We urgently need a better capital market ecosystem in Germany, one that ensures that all companies have easier access to capital.”
BIO Deutschland’s Managing Director, Viola Bronsema, adds: “This year we have an exceptional result that illustrates the sector’s enormous potential. We must set the framework conditions in Germany in such a way that enables more companies to benefit from equity investments and more innovations to reach the market, while also making it possible for companies here to cover the entire biotech value chain.”