Biotechnology companies optimistic. The sector has hopes of the new German government.
Business climate more positive than it has been for years.
Berlin (14 January 2014) – The German biotechnology sector sees itself as well prepared for the coming year. Capital investments in German biotechnology companies have increased by 20 per cent. At the same time, the sector regards the current business situation more positively than it has done for many years. A clear positive trend has also emerged in the sector’s evaluation of the current and future political climate in Germany. There are signs that companies are hoping the new German government will implement the measures included in its coalition agreement to improve the financing situation. These were the findings of a survey by the biotechnology industry association, BIO Deutschland, in cooperation with the sector magazine |transkript. The survey findings are being presented at a press conference in Berlin today.
The survey revealed an overall positive trend. Five of the six indicators surveyed showed improvement over last year’s findings. Biotech companies are planning to hire more staff. For the first time in three years, the employment index value rose once again. This development is linked to the firms’ positive evaluation of the current business situation, which reached the highest level in six years. The surveyed companies also regarded the future business situation more positively than they did last year. Their evaluation of the current political climate overturned a longstanding trend, and is now at a similar level to that following the general election in Germany in 2009. The companies also regarded the future development of the business climate far more positively. According to the survey, their willingness to invest in research and development was the only index value to decline.
The findings have been supplemented by research by BIO Deutschland and |transkript. This showed that equity capital investments rose by 20 per cent in comparison with 2012 to around €360 million. Although no biotech companies were floated on the stock exchange in 2013, many shareholders enjoyed good returns on biotech investments. Only two of the twelve companies listed in Deutsche Börse’s Prime IG Biotech Index lost value; meanwhile, another two companies more than doubled in value.
Overall, the survey findings show that companies believe they are on the right track with their current business models, despite facing budget constraints. One reason for this belief is that biotechnology is becoming more important. For a long time now, biotechnology applications have not been restricted to the development of medicinal products, a field that is particularly dependent on capital. Instead, biotechnological processes are increasingly being used in traditional industries such as car manufacturing, chemicals and cosmetics. The bio-based products developed in these industries are reducing dependence on fossil resources such as oil, gas and coal, and thus helping to protect the climate and environment. Both the healthcare sector and the bioeconomy are mentioned several times in the German government’s coalition agreement. As a result, companies have high expectations of policymakers.
Peter Heinrich, Chairman of the Board of BIO Deutschland, summed up the survey findings as follows: “The lack of financial support for innovative small and medium-sized enterprises in Germany is still a big problem. In terms of venture capital and initial public offerings, companies also often enjoy better conditions in other countries. In the US in particular, this is currently boosting investments and creating a real biotech boom.”
Andreas Mietzsch, editor of |transkript, said: “Medical biotechnology continues to shape the sector. However, the use of biotechnological processes is increasing significantly in other industrial sectors. This development is important for competitiveness, jobs and sustainability – but it is rarely spectacular enough to generate a front-page splash.”
Viola Bronsema, Managing Director of BIO Deutschland, commented: “It is good that the overall atmosphere is positive in our sector. However, the reluctance to invest in research and development shows that trust in the new government first has to be consolidated.”
The individual index values were as follows:
- Current business situation: +2.64 points to 99.13 points
- Expectations of the future business situation: +1.13 points to 92.12 points
- R&D investment index: -3.05 points to 93.05 points
- Employment index: +2.80 points to 95.32 points
- Current political parameters: +5.61 points to 97.31 points
- Future political parameters: +4.00 points to 88.65 points
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You can see the findings of the company survey and graphics at www.biodeutschland.org/survey-of-companies-20132014.html