Press Conference: More Jobs, More Products – but a Need for Action on Financing
From left to right: Kai Uwe Bindseil, Peter Heinrich, Siegfried Bialojan, Georg Schütte, Peer Schatz and Andreas Mietzsch at the presentation of the survey results at the press conference.
The German biotechnology sector has so far withstood the financial and economic crisis unscathed - this is the core message of sector experts from the Federal Ministry of Education and Research / biotechnologie.de and the consultancy, Ernst & Young, who presented the latest key data from the sector at a joint press conference with BIO Deutschland and BioTOP in Berlin during the German Biotechnology Days 2010. However, the experts pointed out that there were deficits, especially in terms of venture capital finance, which are detrimental to company founders and new companies in particular.
According to the results of the company survey conducted by biotechnologie.de, which were compiled in line with the international criteria of the Organisation for Economic Cooperation and Development (OECD) and commissioned by the Federal Ministry of Education and Research, the sector has apparently emerged stronger from the crisis. For instance, the number of people employed in commercial biotechnology surpassed the 30,000 level for the first time in 2009 and is now at 31,600 (+5% in comparison with 2008). In terms of turnover, the companies were able to hold their ground even at the worst stage of the crisis and to generate €2.2 billion, as in the previous year. At €1.1 billion, expenditure on Research & Development also remained at the level of the previous year. Moreover, these sustained high investments by the 531 biotechnology companies in German had an impact: the pipeline of drug candidates continued to increase in 2009 and biotechnology is also becoming increasingly important for other sectors, for example the chemical industry, according to the study by the Education Ministry. Further data show that the market capitalisation of publicly listed companies even increased considerably in 2009, while losses could be noticeably reduced. Only the availability of venture capital decreased clearly once again in 2009.
"The companies created new jobs during the crisis so that more people than ever are employed in commercial biotechnology. This underlines how important innovative technologies are to Germany as a generator of growth," Dr. Georg Schütte, Secretary of State at the Federal Ministry of Education and Research, commented. The ministry plans to strengthen this positive development further in the future. "In the coming years, we want to develop biotechnology as a cornerstone of a knowledge-based bio-economy in Germany," Schütte said.
Siegfried Bialojan, Director of the European Life Science Centre at Ernst & Young in Mannheim confirmed the statements by the Federal Ministry of Education and Research on the robust state of biotechnology in Germany. "Our more profound analyses provide the corresponding explanations," Bialojan said. "Despite the continuing weaknesses in finance, the companies have been able to identify alternative sources of finance, primarily by adapting their business models and transaction behaviour, and to use available capital efficiently. As a result, product development is progressing significantly and is able to continue developing trust among pharma partners."
Peer Schatz, CEO of Qiagen, said, "Germany offers many very favourable conditions for biotechnology. We have a pronounced innovative strength, world-class research and efficient infrastructure. If we want to make more use of the enormous development opportunities of this advanced technology and hence of its considerable social and economic potential, then we need a greater willingness to take risks in the commercialisation of newly discovered results in addition to state promotion of commercial activities."
As Dr Peter Heinrich, Chairman of the Board of BIO Deutschland explained, "Most German biotechnology companies are innovative small and medium-sized enterprises. To ensure the future viability of Germany in international competition, it is vital that the sustained financing of this sector is made significantly easier by venture capital. We still see a great need for political action in this area, for example the improvement of tax parameters for the suppliers of venture capital."
The press conference material is available in German at www.biotechnologietage-2010.de/presse.152.html.