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Industry report 2018

The healthcare industry – the innovation driver of the 21st century: opportunities and challenges

Glossary

  • A base is a component of nucleic acids. There are four different bases: adenine, guanine (purines), cytosine and thymine or uracil (pyrimidines). In RNA, thymine is replaced by uracil.
  • Biotechnology is the study of all processes involving life cells or enzymes for the transformation and production of certain substances.
  • In vitro (lat.) means: in the test tube, i.e., outside of the organism.
  • Biopharmaka are Drugs, which are produced with the help of biological systems.

BIOPRO Baden-Württemberg’s new industry report entitled "The Healthcare Industry 2018: Facts and Figures for Baden-Württemberg" has just been published in both German and English. The topic neatly dovetails with the state’s political activities. An evaluation of the region carried out on behalf of the Baden-Württemberg government has clearly recognised the importance of the healthcare sector as a driver of innovation. “Our report on Baden-Württemberg as an important industry location has revealed many value creation and employment potentials," says Minister of Economic Affairs, Dr. Nicole Hoffmeister-Kraut. The “Baden-Württemberg Health Location Forum” was established on 12th July 2018 aimed at raising the profile of the state’s healthcare sector to a high level with the support of the Baden-Württemberg government.

Biotechnology, the pharmaceutical industry and medical technology – three successful sectors with high value creation potential

The report, which includes twelve company profiles, amongst other things, illustrates the major importance of the medical technology, biotechnology and pharmaceutical industry sectors for Baden-Württemberg. These three sectors play an extremely important role in the region, both economically and for employment. With over 50 billion euros of gross value added in 2016 and around one million employees, the healthcare sector is the largest economic sector in Baden-Württemberg and considered one of the leading business sectors in the 21st century. Around one third of the 51.3 billion euros was generated by the healthcare industry. This comprises the goods and services produced that are not used as part of the process of producing such goods and services, less intermediate consumption.

Minister of Economic Affairs, Dr. Nicole Hoffmeister-Kraut comments: "We must therefore address this growth potential to its full extent. We can do this by strengthening innovations in the healthcare sector, including the medical technology, pharmaceutical industry and biotechnology sectors on the one hand, and by focussing on health services and strategic support services such as specific IT services, research, testing and licensing services or organisational and management consulting on the other. It is also worth mentioning that Baden-Württemberg is the number one German state for the export of health goods."

Demographic change and growing health awareness among the public are enormous drivers of growth for the industry. However, digitisation and new regulatory requirements pose special challenges. Opportunities have to be taken advantage of and companies need help to implement EU regulations.

The Baden-Württemberg healthcare industry in numbers

Baden-Württemberg is the largest pharmaceutical and medical technology location and the second largest biotechnology location in Germany with stable economic development. According to BIOPRO Baden-Württemberg, 1,081 healthcare industry companies are involved in research, development and/or production in Baden-Württemberg. In 2016, 88,026 employees generated taxable revenues of 23.9 billion euros.*

Taxable revenues and employee figures in the healthcare industry in Baden-Württemberg were calculated by the Baden-Württemberg Statistics Office on the basis of data held in the BIOPRO company database, as long as the relevant data had been submitted to the Statistics Office at the time of the survey. The data used in the survey were taken from 2016. BIOPRO’s company database currently lists 174 biotechnology companies, 840 medical technology companies and 86 companies in the pharmaceutical industry, all of which carry out research, develop and/or produce in Baden-Württemberg (as of 7/2018). Figures were extracted for 135 biotechnology companies, 799 medical technology companies and 83 pharmaceutical companies. © BIOPRO

Biotechnology

With 174 biotechnology companies, Baden-Württemberg is home to a strong and diverse biotechnology landscape. The majority of biotechnology companies are active in the field of analytics (41%), biotechnology services (37%), contract research and development (27%) and therapeutics (30%). In comparison with other German states, Baden-Württemberg comes second in terms of the number of biotechnology companies. With 18,751 employees, the companies generated taxable revenues of 4.2 billion euros in 2016 (based on 135 company data sets). This corresponds to a revenue increase of 8% compared to the previous year. The biotechnology sector is dominated by micro and small companies. Around 96% of the companies have less than 250 employees; 48% of the companies have less than 10 people. Six companies with over 250 employees each generate 86% of taxable revenues. The highest number of biotechnology companies is located in the Rhein-Neckar region. The Donau-Iller (more than 50% of total revenues) and Rhine-Neckar regions generate the highest revenues. Biopharmaceutical production is prominent in companies located in the towns of Laupheim, Ulm and Biberach.

In the period between 2015 and July 2018, 30 biotechnologically active companies were founded in Baden-Württemberg. Due to high R&D expenditures resulting from long development times, the biotech sector has high capital requirements. However, acquiring the necessary financial resources still remains challenging in Germany. Nevertheless, a number of companies in Baden-Württemberg such as CureVac, Immatics Biotechnologies, Phenex Pharmaceuticals or HepaRegeniX had many successful financing rounds, cooperation agreements and milestone payments. Curetis even completed a successful stock market launch.

Medical technology

Medical technology combines engineering sciences with natural sciences and medicine, resulting in a broad range of medical devices used to diagnose, monitor and treat disease. At present, Baden-Württemberg is home to 840 medical technology companies. The highest regional concentration of medical technology companies is to be found in the Scharzwald-Baar-Heuberg region centred on the city of Tuttlingen. Compared with other German states, Baden-Württemberg is the number one medical technology location. In 2016, Baden-Württemberg medical technology companies with a total of 48,817 employees generated taxable revenues of 13 billion euros (based on 799 company data sets). A large number of companies with less than 10 employees has settled in the vicinity of small, medium-sized and large companies. As suppliers and specialists, these companies contribute to the innovative capacity in Baden-Württemberg. These companies are currently facing particular challenges due to the new regulations on medical devices and in-vitro diagnostics. According to BIOPRO estimates, at least 20 percent of jobs are at risk. According to Dr. Nicole Hoffmeister-Kraut, Minister of Economic Affairs, Labour and Housing in the state of Baden-Württemberg, the healthcare industry will remain an important pillar of the state’s economy in the future: “Both the Baden-Württemberg Ministry of Economic Affairs and BIOPRO Baden-Württemberg will provide companies with information and assistance in implementing these regulations.”

Pharmaceutical industry

Based on the number of employees, Baden-Württemberg is the number one pharmaceutical location in Germany. Most of the 86 pharmaceutical companies are active in the fields of phytopharmaceuticals (26%), homeopathic medicines (23%) and classical medicines (22%). The state is a European leader in the production of herbal and homeopathic medicines and an important location for biopharmaceuticals. The majority of companies are located in the Südlicher Oberrhein, Hochrhein-Bodensee and Mittlerer Oberrhein regions; the Donau-Iller region is the region with the highest revenues (around 28%). In 2016, these companies with a total of 20,458 employees generated taxable revenues of 6.7 billion euros (based on 83 company data sets). 65 companies (78%) have less than 250 employees. Baden-Württemberg is also home to major companies such as Boehringer Ingelheim, Pfizer and Roche. 18 companies with more than 250 employees generated around 70% of all taxable revenues. A slight increase over the previous year was achieved in terms of revenues as well as in the number of employees subject to social security contributions (3% and 2%). The sector remains a stable employer.

From benchtop to industrial application

"Interdisciplinarity and networking between stakeholders within the healthcare industry are indispensable for continuing to drive innovation," Prof. Dr. med. Ralf Kindervater, CEO of BIOPRO Baden-Württemberg said in a statement. The innovative capacity of the healthcare industry is significantly influenced by a network of university hospitals, the business-related research institutes of the Innovation Alliance, the centres for health research, and many others. Only close exchange and collaboration between basic research, clinical application and industry will maintain the innovative capacity of the healthcare industry.

About BIOPRO Baden-Württemberg GmbH: Bringing the healthcare industry together (biotechnology | medical technology | pharmaceutical industry), initiating cooperations, generating innovation at the interfaces, providing impetus for and marketing the region are the goals of BIOPRO, a wholly-owned affiliate of the Baden-Württemberg government. BIOPRO fulfils its role as the central contact for the healthcare industry by offering innovative event concepts, interdisciplinary and trend-based topic analyses, help in initiating cooperation between research institutions and companies, start-up support and information events on current-interest topics.

* Unless otherwise stated, these key figures on taxable revenues and employees subject to social security contributions refer to the 2016 reporting year. The Baden-Württemberg Statistics Office was able to calculate key figures for 135 biotechnology companies, 799 medical technology companies and 83 pharmaceutical companies.

Website address: https://www.gesundheitsindustrie-bw.de/en/article/press-release/gesundheitsindustrie-der-innovationsmotor-des-21-jahrhunderts/