German biotech industry on the up?

"The situation is by no means rosy, but now we see light at the end of the tunnel,"​ he told a DIB press conference in Frankfurt.

Last year, Germany's biotech industry entered something of a consolidation phase as revenues dropped, followed closely by employment and research expenditures - mostly in the double-digit percentage range.

But Prof Stadler believes that there are signs of an upward trend in the industry. For example, there is an increase in the number of medicinal products either at the development stage or in various phases of clinical testing.

Meanwhile, some financially strong companies have benefited from the declining value of other enterprises and achieved strategic growth through takeovers at favourable conditions.

More companies are making profits because they restructured corporate activities. Now they are less committed to technology development but perform more contract research for large pharmaceutical businesses, he noted.

Prof Stadler said: "All in all, signals point to much more stable and lasting developments for our mid-sized companies."​

Also financial markets seem to have regained a positive attitude toward the biotechnology industry. After three and a half years of 'abstinence', in the past few months German biotech companies achieved an initial public offering at the Frankfurt stock market and another listing at the US technology exchange NASDAQ. Furthermore venture capital companies, being important investors, are again signaling more confidence in the biotech industry. Last year, their investments rose slightly to €216 million.

A look at the domestic drug market shows how important biotechnology as an innovation factor has become for research-based pharmaceutical companies: in August 2004 there were 106 genetically engineered drugs with 77 different active substances on the German market - 14 of these drugs were from domestic production. In the year 2003 sales achieved with biopharmaceuticals in pharmacies totaled some €1.7 billion; this corresponds to 8.6 per cent of the German drug market.

The market segment has grown by more than 52 per cent in only four year's time, and 25 per cent of active substances for new pharmaceutical products currently at the preclinical development stage or tested in early Phase I/II clinical trials are genetically engineered.

In 2003 sales of around $22 billion were achieved on the world market with 13 genetically engineered blockbusters. In total, sales of $55 billion were realised worldwide for biopharmaceuticals and, with annual growth rates of 15 per cent on average, the market for biopharmaceuticals globally improves roughly twice as fast as the market for conventional medicinal products, said Prof Stadler.