Biotechnology industry in Germany - statistics & facts
The importance of biotechnology was highlighted during the COVID-19 pandemic when it was used to invent a vaccine that was crucial in allowing society to return to normal after lockdown. Consequently, there was a boom in capital raised by biotechnology companies. But what lies ahead for the industry? Will it be financially supported in the same way it was through the pandemic years to help find cures even for diseases and viruses that do not bring the world to a standstill?
R&D, which is the only way to develop new treatments, is dependent on external financing, and whilst biotechnology companies received record amounts of funding in the wake of the pandemic, initial figures are suggesting that this is decreasing. The next few years will show whether the industry will be financially better off than it was pre-pandemic or whether for many investors investing is too risky.
Investment in biotech
The nature of science is that it is constantly innovating. Although it seems that this would make the market popular for investors, especially since biotechnology has seen the largest increase in enterprise value out of all biopharmaceutical subsectors, developing biotechnology is often a long, expensive process and this is no guarantee that the product will make it to the market. However, when an invention is successful, the outcome can be financially rewarding for investors. In Germany, the biotechnology industry saw record revenues in 2021 and 2022. This was largely due to the pandemic, which caused an increased demand for pharmaceutical drugs and medications. Similarly, there was also more investment in the sector during the pandemic years, mostly from capital markets and risk capital. This funding, however, decreased in 2022, which could either be a result of a more challenging economic situation or because by 2022 the effects of the pandemic were wearing off.Who are the industry leaders?
Bayer AG is the leading biotechnology company in Germany. It is perhaps most famous for inventing a very commonly used pharmaceutical drug, Aspirin. The company, however, is also known for its work on agricultural products as well as pharmaceutical ones. Another famous German biotechnology company is BioNTech. They became a household name, despite being a relatively small company, after successfully developing one of the first COVID-19 vaccines with the American company Pfizer. This kind of success is only possible through companies dedicating a significant amount of money towards research and development.R&D, which is the only way to develop new treatments, is dependent on external financing, and whilst biotechnology companies received record amounts of funding in the wake of the pandemic, initial figures are suggesting that this is decreasing. The next few years will show whether the industry will be financially better off than it was pre-pandemic or whether for many investors investing is too risky.
