Bavarian biotechnology maintains its position in the crisis and continues to grow

• Steady increase in biotech companies
• Employment high: 51,000 employees in Bavarian biopharma sector
• 14 new companies, newly established companies above national average
• Oncology remains most important indication in drug development
• 62% of companies rate current business situation as good or even very good
• Financing amounting to more than 350 million euros
• Investments in new research infrastructures
• Digitization, AI and Big Data are the trends in biomedical development

BioM presented the current Bavarian biotech figures and developments with its annual report “Biotech in Bavaria-Towards new horizons”in a joint press conference with the auditing companyEY and its German Biotechnology Report. Considering the global crises, the most important figures from Bavaria with slightly weakened growth show a special resilience of the biotechnology sector compared to other industries.

Employment peak

Together, the pharmaceutical, biotech and other companies in the sector employ around 51,000 people in Bavaria. With a total of 24,500 employees, the 298 (+3%) biotech companies are the most important employers in the sector. This corresponds to an increase of 2,500 employees compared to the previous year. National and international companies employed a total of 17,500 people at their Bavarian sites, an increase of 16.5%. Small and medium-sized Bavarian biotech companies remained stable with a total of 7,000 employees.

Strong start-up momentum, newly established companies above the national average

Bavaria continues to be particularly distinguished by its startup-friendly ecosystem. In 2022, a total of
14 new companies were added - 11 of which were newly founded. The number of start-ups puts
Bavaria at the top of the list in Germany and above the national average. In the region, start-ups find
a strong network of supporting organizations. With the virtual incubator inQlab, BioM was able to
help a large number of teams to successful start-ups. BioM will intensify its support for spin-offs with
its physical incubator Munich Accelerator for Life Sciences & Medicine (MAxL) starting in 2024. The
Bavarian Ministry of Economic Affairs is funding this project with 8.5 million euros.

Funding climate and investment in new research infrastructure

The global crises are also having a particularly strong impact on start-ups and smaller companies that
rely on external support from investors. Despite the currently subdued investor market, Bavarian
companies have succeeded in raising considerable sums and closing some major deals. In total, the
funds raised in 2022 amounted to more than 350 million euros. Tubulis, ITM, CatalYm and Ethris
were particularly successful with their financing rounds in the double-digit million range. Both
Immunic and Vivoryon raised significant funds via share placements.

Heavy investments are being made in new research infrastructures. The Roche Group is investing up
to 250 million euros in its new diagnostics research building at the Penzberg site. In addition, the first
laboratories of the Fraunhofer Institute for Immunology, Infection and Pandemic Research were
opened in Penzberg. The 9,200 m2 Life Science Center in Gräfelfing will provide state-of-the-art
laboratory and office space for some 400 biotech scientists in 2023. The WACKER Group is investing a
double-digit million euro sum in the construction of a biotechnology center and aims to raise
industrial biotechnology research to a top international level by founding the TUM WACKER Institute
for Industrial Biotechnology. Ludwig-Maximilians-Universität München (LMU) is expanding its
Großhadern/Martinsried campus with ICON, for research into cardiovascular diseases, and DIAG for
diagnostics at the Max von Pettenkofer Institute for Bacteriology and Virology.

Oncology remains most important indication in drug development

The Bavarian biotech landscape is traditionally strongly characterized by drug development. These
are long-term research and development projects that proceed from the initial identification of a
drug candidate through preclinical and clinical studies in a lengthy process to approval. A whole
series of R&D projects have been advanced and are now in the preclinical phase (67). In contrast, the
total number of projects in clinical phases I to III has decreased to 79. A total of 23 products are
currently in clinical phase I, 34 in phase II and 22 in phase III. As in previous years, cancer
therapeutics account for the largest proportion of compounds in clinical development (35).
Therapeutics for autoimmune diseases follow with 9 projects. As in Germany, the product pipeline in
Bavaria is dominated by biopharmaceuticals and here by the active substance group of recombinant
antibodies.

Business climate mostly positive

Following the coronavirus pandemic, which brought not only opportunities but also many challenges
for biotech companies, companies worldwide are struggling with supply bottlenecks and rising prices.
In a survey, BioM asked the companies of the Bavarian Biotech Cluster how they assess their current
and future business situation.

According to the survey, 62% of respondents rated their company's current business situation as
good (48%) or even very good (14%), 29% satisfactory and 9% poor. 42% assessed their business
development up to the end of 2023 as positive, 13% expect it to deteriorate, while 45% expect no
change. After all, 72% of the companies surveyed expect their company's business situation to
improve in the next three to five years, and only 7% expect it to deteriorate.

Digitization, AI and Big Data are the trends in biomedicine development

Biotechnology itself is at an important turning point - facing major challenges and opportunities. In
recent decades, it has experienced enormous growth and Bavaria has established itself as one of the
world's leading locations. BioM Managing Director Prof. Dr. Ralf Huss comments: "In order to
maintain and expand the outstanding position of Bavarian biotechnology, we must face up to current
developments and trends: The increasing linkage and digitization of processes and data as well as the
use of AI and Big Data will provide better and faster solutions to pressing medical issues and deliver
new diagnostic and therapeutic methods. In Bavaria, we have the necessary tools to drive this
development forward together with all players."

Bavarian start-ups are already realizing the chosen direction with their success stories: For example,
deepc is paving the way for the application of AI in radiology. Its software platform enables clinics
and medical practices to centrally use a wide variety of AI applications from globally leading
companies. m4 Award-winner Invitris is addressing the current problem of increasing antibiotic
resistance worldwide. To this end, the company has developed a technology that enables the
development and production of new synthetic antimicrobial agents such as bacteriophages. Modular
thinking and modular technologies play a major role here, including machine learning for product
optimization.