German biotech companies currently have many drugs in clinical trials.
(Photo: IMAGO / Shotshop)
Frankfurt Since the boom during the corona pandemic, German biotech companies have been raising significantly less capital. However, the situation seems to be stabilizing at least: The financing volume in the year to date is again slightly above the level of the previous year. This is shown by figures from the Bio Deutschland industry association, which are exclusively available to the Handelsblatt.
According to this, German biotech companies received around 420 million euros from January to May, slightly more than in the same period of 2022. However, this does not mean a trend reversal, because biotech financing is volatile and even individual larger rounds can severely distort the picture. A capital increase by Curevac this year alone, with the equivalent of around 234 million euros, contributed the lion’s share to the industry’s capital income.
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The financing situation remains difficult at the current level, according to the experts from the auditing and consulting company EY in their new biotech report. “Due to the economic crisis, there is currently enormous reluctance among investors and pharmaceutical companies,” says EY expert Manuel Bauer.
However, the industry needs large amounts of capital for the further development of biotech products that are about to be ready for the market. A total of 145 clinical trials for research into new therapies are currently underway in the German biotech industry, 17 of which are in the last clinical phase before the application for approval.
Record year for pharmaceutical alliances
In the first two years of the corona virus, high capital inflows – especially at the vaccine developers Biontech and Curevac – had caused the industry’s financing volume to rise to record levels of three and 2.4 billion euros respectively. Last year, the inflow then collapsed by more than two thirds to 812 million euros, as the biotechnology report shows.
However, Germany is not alone in this development. In the USA and Europe as a whole, the financing market had also cooled down again after overheating. Throughout Europe, the development was similar to that in Germany: Capital raising fell by 65 percent from 22 to 7.8 billion euros.
Despite the reluctance of many investors – there are also positive signals for the industry. Last year was a record year for alliances with pharmaceutical companies. The potential volume of closed deals has quadrupled compared to 2021 to more than 14.2 billion euros. So-called upfront payments of 702 million euros were associated with these alliances – after 183 million euros in the previous year.
The largest alliance, which if successful could reach a volume of more than five billion euros, was concluded between the Hamburg-based company Evotec and the pharmaceutical company Bristol Myers Squibb. The US company also agreed the second largest alliance with a potential value of more than four billion euros.
What it looks like without the Biontech effect
Partner in this case was Immatics. The Tübingen-based company develops targeted immune therapies against cancer and has concluded partnerships with pharmaceutical companies with a potential deal volume of 8.7 billion euros over the past five years.
Hamburg-based Evotec has been able to realize a potential alliance volume of more than eight billion euros over the past five years. The company is one of the world’s leading drug discovery and development companies. The company specializes in neural diseases, pain, metabolic and inflammatory diseases and oncology.
This year, Evotec entered into another lucrative partnership. The Hamburg-based company is collaborating with the Novartis subsidiary Sandoz in the development and production of biosimilars – imitation products of biotech drugs. The US subsidiary of Evotec, Just-Evotec Biologics, will receive a double-digit million amount in advance, as the company announced on Tuesday evening. Up to $640 million will be added depending on development progress.
Slight decline
25
billion euro
The biotech industry will make sales in 2022.
All in all, the industry came through the crisis year 2022 reasonably robustly, the EY experts conclude. Despite the war in Ukraine, inflation and the difficult economy, the number of companies remained almost stable at 749 companies. Industry sales shrank by three percent to 25 billion euros, with most of the industry’s sales over the past two years attributable to Biontech and its Covid-19 vaccine Comirnaty.
The Mainz-based company achieved sales of around 19 billion euros in 2021 and just over 17 billion euros in 2022. If this biontech effect is excluded, the German biotech industry was able to increase its sales by almost eleven percent to 7.8 billion euros.
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