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Survey results show the biotech sector is cautiously optimistic

Despite the current financial crisis, more than 90% of German biotech companies consider their current situation to be good (48%) or satisfactory (43%). So say the results of a survey carried out by the German Biotechnology Industry Organisation, BIO Deutschland, and the life sciences journal |transkript presented on 22nd January in Berlin. The survey was carried out in December 2008 and included 200 German life sciences companies.

Presenting the results of the survey: Patrick Dieckhoff (transkript), Kai-Uwe Bindseil (BioTop), Peter Heinrich (chairman of the board of BIO Deutschland) and Viola Bronsema (managing director of BIO Deutschland). © biotechnologie.de

"Most of my colleagues rate the situation as cautiously optimistic," said Peter Heinrich, CEO of the Munich-based biotech company Medigene and chairman of the board of BIO Deutschland, speaking at a recent press conference in Berlin. The majority of the companies surveyed do not envisage their situation either changing in 2009 (49%) or improving (33%). However, the number of companies with a pessimistic outlook rose from 2% to 18%.

Heinrich expressed his surprise that his biotechnology colleagues planned to create jobs in 2009. 50% of the biotechnology companies surveyed stated that they plan to increase the number of employees in 2009 (in 2008: 71%), 39% expected no changes and only 11% expected redundancies (2008: 3%). "This is not quite in line with my personal experience. I fear that many enterprises will be somewhat cautious when it comes to hiring new staff," commented Heinrich.

High research investments also part of future plans

The same is also true with regard to planned research and development investments. "The way I see it, the majority of companies must now concentrate on their value drivers and put all other things aside in order to keep costs in check," explained Heinrich whose Munich-based company focuses on research into anti-cancer therapies. The companies surveyed rated their investment situation as slightly more optimistic than their business situation. Just over half of the companies (52%) plan investment expenditure at the same level as last year (44% in 2008); about 40% of the companies said they wanted to invest more than they had done in 2008. The number of "savers" who plan to invest less than in 2008 remained more or less the same (2009: 7%, 2008: 8%). According to Patrick Dieckhoff, editor of |transkript, the survey reveals the biotechnology market to be largely unaffected by the current financial crises: "The health market is still functioning well. Sick people cannot wait. Therefore the demand for healthcare has not fallen."

Inactivity is the wrong signal

However, remaining inactive gives the wrong signal, emphasised Heinrich. BIO Deutschland estimates that German biotechnology companies will need at least a billion euros in private financial capital over the next three years in order to remain in the group of market leaders in the field of biotechnology. "The question has to be asked, where will the money come from?" said Heinrich who envisages further close partnerships with the pharmaceutical industry to generate necessary additional funding besides stock and risk capital. "In 2008, the pharmaceutical industry acquired numerous biotechnology companies and invested as much as 800 million euros," explained Dieckhoff. This might be the way forward in the future. In addition, there are more and more companies who are pursuing more creative business models as shown by Wilex and UCB, said the industry expert. In addition, the German biotechnology sector receives considerable funding through wealthy private investors such as the Hopp and Strüngmann families, whose contributions help a number of companies to remain stable and maintain cash flow levels.

BIO Deutschland: we need a superfund

In view of the bad fiscal conditions in Germany and multi-million investment programmes in other countries, Heinrich called for additional support for the biotechnology sector: "The biotechnology sector requires considerably more capital than other industries. The German government should therefore, in cooperation with business partners, consider the creation of a superfund to provide specific investments for innovative companies as well as larger investment sums such as those the HighTech-Gründerfonds provides."

The biotech actors themselves also stressed the importance of working closely together in order to strengthen the biotechnology sector as a whole. Kai-Uwe Bindseil, spokesperson for the German BioRegions Council, used the press conference to announce that the German BioRegions Council will become a member of BIO Deutschland. "Germany has 30 regional biotech clusters, which form the backbone of the German biotechnology sector. We have taken the decision to become a member of BIO Deutschland in order to contribute to enhancing the biotechnology sector in Germany."

Source: biotechnologie.de - 21 January 2009


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