Biotech industry: many investments, minor momentum from change of government


(Berlin - January 18, 2022) Funding in the German biotechnology industry was around 2.3 billion euros, the second highest ever in the industry's more than thirty-year history, following the record year of 2020 with around 3 billion euros. Entrepreneurs are more positive about their current and future business situation than in the previous year. In addition, more respondents say they intend to invest in research and development (R&D) and increase their workforce. The political climate is also assessed even more positively in 2021 than in 2020. However, the new government is not raising new hopes in the industry, according to the results of the annual trend survey conducted by the biotechnology industry association, BIO Deutschland, which were released at a press conference today. In addition, the survey showed that the impact of the pandemic on the current or future business situation is decreasing compared to the previous year.


Private biotech companies raised about 851 million euros in venture capital in 2021, including therapy developer Emergence Therapeutics with an exceptionally high Series A of 87 million euros. Capital increases by public German companies totaled around €748 million. IPOs, all on the U.S. NASDAQ, contributed 694 million euros to the overall result.


The assessment of the current and future business situation has improved further and shows a positive trend. 64 percent (2020: 59 percent) of respondents consider their business situation to be good, and 52 percent (2020: 48 percent) expect it to improve. The impact of the pandemic on business is declining. 33 percent (2020: 41 percent) say the Corona crisis had an impact in 2021, while only 16 percent (2020: 29 percent) expect this to be the case in 2022. A turnaround is seen in employment. The index rises by around seven points, with 69 percent (2020: 56 percent) stating that they intend to increase staff. The picture is similar for the intention to invest in R&D. 57 percent (2020: 49 percent) intend to increase investment, and the index climbs by almost five points. The assessment of the current political climate also remains positive. Around 4 percent (2020: 8 percent) currently consider it to be bad, while 59 percent (2020: 53 percent) consider it to be good. The election of the traffic light coalition has not raised any great expectations among the biotech industry and therefore does not lead to a significant change in the assessment of the future political climate. 61 percent expect things to get better this year (2020: 58 percent). On the other hand, 9 percent expect it to get worse (2020: 4 percent).


Oliver Schacht, CEO of BIO Deutschland, explains: "The financing situation of the German biotechnology industry is developing positively. This is a good sign and also urgently needed so that our innovative small and medium-sized companies can fully develop their potential. Nevertheless, there is still a lot of room for improvement if, as written in the coalition agreement, we want to seize the opportunity to make Germany a leading biotechnology location. The traffic light government should now make biotechnology a top priority so that we can soon tell even more success stories, not only in the field of health, but to combat climate change, as well as in sustainable biobased production, the circular economy and nutrition."


Viola Bronsema, managing director of BIO Deutschland, added: "Our trend survey shows that the mood in the industry is positive or getting better. Skilled workers are in demand, and investments in research and development are expected to increase. However, the fact that the change of government has not led to a significant change in the assessment of the future political climate, although the promotion of biotechnology is mentioned in several places in the coalition agreement, must give us pause for thought. The decisive factor for the industry's loyalty to its location is whether, how and when the approaches in the government program that are positive for our industry are also implemented."


Carsten Dehning, CEO and CFO of Emergence Therapeutics, commented, "We at Emergence Therapeutics can confirm the positive development in biotechnology financing. By raising a Series A of EUR 87 million at the end of 2021, we have shown that it is possible to convince internationally leading investors to invest large sums in a pan-European company headquartered in Germany with good data, a promising technology and an excellent team. Today, it is much easier to raise large volumes even in early stages and thus to significantly support outstanding technology approaches and experienced teams of German-French or European origin."


Translated from original news in German