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(Last updated: 25 Jan 2008)
Trends and opportunities
The market
With more than 600 companies involved in biotech activities, Germany is one of the leading countries for biotech in Europe. Approximately 350 of these companies are considered core biotech companies. They represent roughly 19 per cent of European core biotechs.
In 2004, these 350 companies achieved combined sales of more than €1 billion which represents roughly 10 per cent of European biotech sales. German investments in R&D were €860 million – 14 per cent of European biotech R&D spending.
More than 80 per cent of all German biotechs are small and medium enterprises and have 50 or fewer employees. Only seven per cent employ more than 100 people. All in all, more than one-third of the European biotech employees are working in Germany (11,500 people).
Most German biotechs are organised in one of the 25 biotech clusters (BioRegios) with the highest biotech concentration in the state of Bavaria, Baden-Württemberg, Nordrhein-Westfalen, and Berlin/Brandenburg.
Key activities of German biotech firms are in the fields of therapeutics, platform technologies, diagnostics, bioinformatics and proteomics. Therapeutics research is heavily dominated by oncology, followed by infectious diseases and cardiovascular.
Funding of biotech companies remains strong – in fact, 40 per cent of all European biotech venture capital is invested in Germany.
Germany ranks second after the US in terms of patents for pharmaceuticals that have a biotech link.
Biotech is rapidly gaining momentum in Germany – in fact, experts believe that 30 per cent of the economy will somehow depend on biotech by 2015.
Leading companies in Germany and Switzerland include:
- Boehringer Ingelheim
- Bayer Healthcare
- Merck KGaA
- Merz
- Novartis
- Roche
- Sanofi-Aventis
German biotechnology attracts the most venture capital funding in Europe, according to Ernst & Young - 40 per cent, twice as much as the UK, of Europe’s funding is won by German companies. The finance market has reacted positively to the establishments of new biotechnology companies. Money for growing biotechnology companies are also available from strong financing partners, however, there is room for improvements.
On the Frankfurt Stock exchange there is now the possibility for hi-tech knowledge companies to register in a special segment called 'der neuer Markt'. Hard requirements have to be filled in order to be allowed to list a company in this segment which guarantees high quality. Around 20 biotechnology companies are traded on der neuer Markt today.
Germany is a world leader in pharmaceuticals. Many of the companies have research subsidiaries in Australia. German companies in Australia include:
(Sources: Initiative Europe, BNP Paribas Biotech report, Ernst & Young Lenoir report, OECD Science and Industry Scoreboard.)
In Europe and Australia, R&D collaborations dominate the biotechnology industry. Compare this to the USA, where commercial deals involving late-stage products are the preferred strategy. The European market is still in a development phase and therefore less competitive and more open to international collaborations than the US market. These collaborations would offer the Australian industry access to a critical mass and facilitate access to venture capital.
Germany has a strong pharma industry that needs to expand providing the Australian biotechnology industry with licensing opportunities or selling of research projects. Oncology is the dominant recipient of research and the future looks bright for companies within genomics, proteomics and bioinformatics as these services are in high demand.
Many of the large German biotechnology and pharmaceutical companies have invested in Australia, increasing the potential for further internationalisation. The German Government has been supporting the biotechnology industry since 1996 with significant funding programs. Programs include Bioprofile, BioRegio, Biofuture, Biochance to name just a few.
Opportunities
Opportunities for Australian exporters exist in the following areas:
- German companies conducting clinical trials (especially within oncology).
- Import of marine and plant organisms for pharmaceutical manufacturing.
- Licensing agreements between German pharma and biotech companies/research institutions.
- Research collaborations/strategic alliances between biotech companies (focus on Australian cutting-edge areas such as genomics, proteomics and bioinformatics).
(Sources: Ernst & Young, Mergent, Information Secretariat for Biotechnology, Deutsche Bank) |