Biotechnology industry pessimistic about the year ahead – investment in 2022 fell to 2019 levels
Biotechnology industry pessimistic about the year ahead – investment in 2022 fell to 2019 levels
(Berlin – 18 January 2023) After two years of record investment, the German biotechnology industry was only able to raise around €920 million in equity capital in 2022, less than a third of the amount raised in 2020, the first year of the pandemic. This sum was almost equally divided between private and listed companies. In the annual trend survey by biotech association BIO Deutschland, board members and company directors were significantly less satisfied with their current business situation than in previous years. The outlook for the coming year is also bleak, even more so than during the 2008 financial crisis. More than half of respondents (54 percent) said the energy crisis was negatively impacting their business situation. One-fifth and one-half are strongly and moderately feeling the effects of inflation, respectively.
Far fewer respondents than in 2021 said they planned to hire more staff. Plus, the willingness to ramp up spending on R&D decreased markedly. Although in the last two years company leaders had assessed the current and future political climate to be extremely positive for the industry, this index has now fallen back to pre-pandemic levels.
Some 64 percent of respondents still described their business situation as good in 2021, but this dropped to just 40 percent in 2022. As for the future business situation, 26 percent said they expected to see an improvement, a figure that is around half of what it was in 2021. Some 39 percent of companies plan to increase R&D spending (2021: 57 percent). Yet, overall, almost 90 percent said they intend to invest in R&D, illustrating the industry’s sustained commitment to intensive research. Around 45 percent of companies still intend to boost staff numbers, about a third less than in 2021. Some 31 percent consider the current political climate to be good for the industry (2021: 59 percent). The results were similar for the companies’ assessment of the future political climate. Here, too, only 28 percent expect an improvement, compared with 61 percent in 2021.
Oliver Schacht, Chairman of the Board of BIO Deutschland, stated: “The results of our survey show that sentiment among biotech executives has deteriorated significantly. This is very regrettable, but not at all surprising considering global developments over the past year. The reasons for the waning optimism are certainly manifold. Not only the war, the energy crisis and inflation, but also a shortage of skilled workers and a lack of financing options are putting the brakes on our companies. The slump in stock prices, especially on the Nasdaq, the U.S. technology exchange that is so important for us, has also resulted in a massive drop in the valuation of many companies. It is now therefore more important than ever to take long-term steps to strengthen Germany as a biotech location. We must concentrate all our efforts on ensuring our technological sovereignty in the field of biotechnology.
Viola Bronsema, Managing Director of BIO Deutschland, added: “It is well known by now that biotechnology’s potential is not limited to pandemic control and health research, but also extends to many other areas such as sustainable industrial production, nutrition and the circular economy. Yet many people don’t realize that when evaluating the business environment, a distinction must be made between the key technology’s application and the industry’s contribution. Without venture capital, patent protection and collaboration opportunities, even the sector’s star BioNTech would certainly not have come so far so quickly despite public funding. There is a feeling among our companies that policy makers forget all too quickly what role innovative biotech companies play. This is particularly negligent given the challenges that lie ahead.”
595 words/3765 characters including spaces
The results of the trend survey and graphic material can be found at www.biodeutschland.org/en/2022-2023.html.
About BIO Deutschland:
BIO Deutschland e. V., with more than 370 members – companies, BioRegions and industry service providers – and headquartered in Berlin, Germany, aims to support and promote the development of an innovative economic sector in Germany based on modern life sciences. Oliver Schacht, Ph. D., is chairman of the board of BIO Deutschland.
For more information, visit: www.biodeutschland.org
Supporting members of BIO Deutschland and industry partners are:
AGC Biologics, Avia, Baker Tilly, Bayer, BioSpring, Boehringer Ingelheim, Centogene, Citeline, CMS Hasche Sigle, Deutsche Bank, Ernst & Young, Evotec, KPMG, Lonza, Merck, Miltenyi Biotec, MorphoSys, Novartis, Pfizer, PricewaterhouseCoopers, QIAGEN, Rentschler Biopharma, Roche Diagnostics, Sanofi Aventis Deutschland, SAP, Schmidt Versicherungs Treuhand, Simmons & Simmons, Springer Nature, Thermo Fisher Scientific, Vertex Pharmaceuticals, Vibalogics, ZETA.
Contact:
BIO Deutschland e. V.
Dr Claudia Englbrecht
Schützenstraße 6a
10117 Berlin, Germany
Tel.: +49 30 2332 164-32
Mobile: +49 151 1406 7326
Email: englbrecht@biodeutschland.org
Publication free of charge – specimen copy requested.
