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Biotech industry: Financing stable – trend reversal is becoming apparent

Despite the tense global financing situation, the German biotechnology industry managed to raise slightly more capital in 2023, at around 1,08 billion euros, than in the previous year (920 million euros).

Of this, 533 million euros went to private companies in the form of venture capital, and 547 million euros went to listed companies as a capital increase, according to data collected by the biotechnology industry association BIO Deutschland published today. The association's annual trend survey also shows that although managing directors assess their business situation in 2023 to be significantly worse than in 2022, they are again looking more positively into the future. However, the negative trend in personnel planning and investments in research and development (R&D) continues for the coming year.

Around 29 percent of those surveyed said their current business situation was bad. In 2022, only 13 percent said that. In contrast, around 35 percent assume that their business situation will be better in 2024 than in 2023. Last year that was only 26 percent. The number of companies that will cut staff has also increased. 14,5 percent plan to do this, around three times as many as a year ago. The number of people planning to build up staff has remained stable at around 45 percent. 33 percent want to invest more in R&D in 2024 (2023: 39 percent), 18 percent plan to reduce these investments (2023: 11 percent). The number of people who think the current political climate is bad for biotech companies has more than doubled, from 15 to 35 percent. When it comes to the future political climate, entrepreneurs expect little change.

Oliver Schacht, CEO of BIO Deutschland, states: “The year 2023 has presented our companies with special challenges. The capital market was difficult, energy costs are high, and qualified personnel are difficult to find. The results of our trend survey reflect this situation. It is noteworthy that many managing directors assume that the situation will not worsen any further and that there will even be a trend reversal. However, they are still cautious when it comes to investments, and more job cuts are planned, but still at a low level.”

Viola Bronsema, Managing Director of BIO Deutschland, adds. “The trend survey shows that the assessment of the political climate for our industry has once again deteriorated significantly compared to the previous year. This is understandable, because biotechnology has still not become a top priority in our government, even though the Chancellor's Future Council, for example, has also recognized the importance of the technology. Something urgently needs to happen here. Biotech companies are powerhouses of the value chain, therapy development and the sustainable bioeconomy and circular economy.”

Press release from “Bio Deutschland” from January 11.01.2024, XNUMX


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