2017 trend survey results announced – biotech sector expected to continue growth
The German biotechnology sector has begun the new year on an optimistic note and remains in growth mode. A majority of companies said they plan to increase hiring and ramp up R&D investment in 2017. This positive sentiment is also reflected in the current financial picture: Biotech companies raised about €505 million of fresh capital in 2016, almost reaching last year’s record figure (2015: €550 million). These were the findings of a company survey by the biotechnology sector association, BIO Deutschland, in cooperation with the biotech magazine |transkript.
The survey shows that the mood in the biotech sector is still upbeat: The responding companies again expressed greater intentions at the end of 2016 to make new investments in personnel and R&D. Two-thirds of respondents view the current business situation positively, while 54 percent expect the situation to improve even further in 2017. The survey thus yielded similarly positive results as last year.
The results are backed up by research by BIO Deutschland and |transkript, which is published by BIOCOM AG. According to this research, German biotech firms once again received a high level of investment in 2016, although overall investment dropped 8 percent in comparison to the record year of 2015 (€550 million). The biotech sector, however, became more attractive for shareholders: Listed firms raised a total of €258 million on the stock markets, a 5 percent increase over the previous year (€246 million). In addition, BRAIN AG became the first biotech company go public in Frankfurt since 2007. Venture capitalists put a total of €216 million into German firms in 2016, down 17 percent over the record year of 2015 (€260 million).
This development enabled Germany to distinguish itself positively from the European capital market. Here in 2016 considerable disillusionment set in after the boom year of 2015. According to a study by BIOCOM AG, European biotech firms acquired a total of €3.3 billion on the stock markets, about half as much as in 2015 (€6.16 billion). Some 17 firms completed IPOs last year (2015: 25), the overwhelming majority (14) on one European stock exchange. Only three companies chose to go public on Nasdaq in the US.
Peter Heinrich, Chairman of the Board of BIO Deutschland, summed up the situation as follows: “The positive trend we saw last year in our survey has stabilised. Company officials have a relatively positive view of the political climate, which we attribute to favourable developments in recent years. For example, the Pharma Dialogue, in which we were actively involved, has produced a number of positive results. The reform of the tax loss carry-forward rules for corporations has also sent an encouraging signal to innovative small and medium enterprises and their investors. Looking ahead to the next legislative period, we hope to see a continuation of this development. This is the only way to ensure that German remains an engine of innovation for the long term.”
Sandra Wirsching, capital markets expert at BIOCOM AG, added: “The financing situation has settled at a markedly high level in recent years. We are now again seeing VC rounds in the double-digit million range and foreign investors increasingly getting involved in the financing rounds in Germany.”