A German biotechnology company based in Martinsried, GPC Biotech, raised €78.6 million in June through public and private placements in Germany, the US, and other countries. "Our recent financing was one of the most successful biotech offerings in terms of proceeds for the year to date, on either side of the Atlantic," said Dr. Bernd Seizinger, CEO of GPC. It is now one of the few German biotechnology companies listed on NASDAQ.
More good news came from Berlin-based biotech company Epigenomics, which went public on the Frankfurt stock exchange in July — the first biotech IPO in Germany for almost three years. Despite early doubts, this IPO signals hope for many other biotech companies waiting to enter the stock market. It may also signal an upcoming revival of financial markets.
There is other good news for German biotechnology companies. This spring, for example, Jerini, also based in Berlin, raised €31 million in private financing. There have been additional announcements of important deals with large pharmaceutical and biotech companies. MorphoSys, a Martinsried-based company, sealed a strategic collaboration deal with Novartis and will receive $30 million in R&D funding and technology license fees over the first three years, as well as a strategic investment worth €9 million.
As the biotech industry in Germany matures, companies are starting to bring products to market and report the first sales revenues. In 2004, MediGene, one of Germany's public biotech companies, recorded its first sales revenues from Eligard, its first product on the market. In the first six months of the year, MediGene received €8.6 million from their marketing partner Yamanouchi and raised its revenue forecasts for the year to €12 million.
Pharmaceutical companies are also increasing their biotechnology efforts in Germany: Roche Diagnostics announced in June that it will invest nearly €300 million in new production facilities for recombinant antibodies in Penzberg (south of Munich), which is currently Europe's largest biotechnology production facility.
Table 1. Examples of Biotech Cooperations in 2003 and 2004
And, last but not least, Germany is a leading producer and exporter of pharmaceutical and chemical products. In 2001, for example, the country exported pharmaceuticals worth €14.8 billion — more than Switzerland, the US, or the UK, according to the UN Export Statistical Division. It is among the top three pharmaceutical markets and has frequently been called the "pharmacy of the world."
BIRTH OF GERMAN BIOTECHNOLOGY
The German biotech industry did not take off until the early 1990s, but it has made a tremendous effort to make up for lost time. Now Germany leads Europe in the number of privately held biotech companies, following only the US and Canada worldwide.
In their latest biotech report on Germany, Ernst & Young counted 350 companies whose main business is commercialization of modern biotechnology, who use new technologies, and who aim for growth. More than 90% of these "core" biotechnology companies are active in drug development, diagnostics, or drug delivery, but only three percent in the area of transgenic plants. In addition, there are numerous biotech-related companies, suppliers, and service companies in Germany as well as a range of large, international pharmaceutical companies.
Dr. Bernd Seizinger, CEO of GPC Biotech
OPPORTUNITIES FOR PARTNERING
More important than the number of companies, however, is the number and quality of drug candidates in these companies' pipelines. By the end of 2003, approximately 200 compounds were under development in German biotech companies, about one quarter of them targeted at combating cancer. The number of candidates is increasing. Several companies will reach significant product milestones or even product launches in the near future.