"The lull after the Corona boom seems to be over: in 2023, German biotechs raised more money from investors for the first time.
Despite the difficult situation on the international financial markets, German biotechnology companies were able to raise more money from investors last year than in the previous year.
The Bio Deutschland industry association announced on Thursday in Berlin that around 1.08 billion euros in capital had been collected.
A year earlier it was 920 million euros.
In 2023, 533 million euros flowed from venture capitalists to private companies, a little more, namely 547 million, went to listed biotech companies in the form of capital increases, as can be seen from the data collection by Bio Deutschland. The association believes that the financing of the supplier sector, which is important for the pharmaceutical industry, is stable.
Trend reversal is emerging
However, the mood in the industry remains mixed. In a survey conducted by the association among its member companies, around 29 percent of respondents described their current business situation as bad. In 2022, only 13 percent said this. In contrast, around 35 percent of those surveyed expect a better business situation in 2024 than in 2023, significantly more than in the previous year with 26 percent. “It is remarkable that many managing directors assume that the situation will not worsen any further and that there will even be a trend reversal,” says association boss Oliver Schacht. But he also sees the challenges in his industry.
After the corona pandemic and Biontech's great mRNA vaccine success gave the local biotech industry a strong boost in financing and public attention, things became more difficult again from 2022. At this point in time, the industry had not even raised a third of the financing volume of the two previous years, which had been the best financing years for the German biotech industry to date with around 3 and 2.3 billion euros in capital.
Fewer financing rounds, but sometimes larger
The boom was followed by uncertainty. The financing rounds became less frequent, but in some cases larger.
The biotech company ITM, which wants to treat cancer with radioactive drugs, benefited from this in 2023. It secured 255 million euros in fresh capital, almost half of the money that venture capitalists distributed last year.
Overall, donors remain cautious. The negative trend in personnel planning and investments in research and development (R&D) will continue in 2024.
According to the trend survey, three times as many respondents are planning to reduce their workforce this year as in the previous year.
The number of people who want to increase their staff remains stable at 45 percent. However, the planned workforce reductions are still at a low level, said Schacht.
When it comes to R&D investments, however, 39 percent of those surveyed want to slow down, compared to 33 percent a year ago. Given that the biotech industry needs to drive innovation in order to be attractive for further financing, IPOs or acquisitions by pharmaceutical companies, this is not a good signal." [1]
1. Deutsche Biotechs sammeln eine Milliarde Euro ein: Verband sieht Trendwende / Personalabbau und Investitionszurückhaltung bleiben aber auch 2024 bestehen
Frankfurter Allgemeine Zeitung (online)Frankfurter Allgemeine Zeitung GmbH. Jan 11, 2024. Von Vanessa Trzewik
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