Biotech industry: financing remains stable – turnaround on the horizon

Biotech companies are more positive about the future despite challenges

16-Jan-2024

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Despite the tense situation on global financing markets, the German biotechnology industry managed to raise around €1.08 billion in capital in 2023, a slight improvement over the previous year (€920 million euros). Some €533 million of this flowed into private companies in the form of venture capital, while €547 million was injected into listed companies through capital increases, according to the survey results published by the biotech association BIO Deutschland. The association’s annual trend survey also shows that company directors again have a more positive outlook for the future, although they still assessed their business situation in 2023 as being markedly worse than in 2022. However, there continues to be a negative trend in terms of hiring intentions and R&D spending for the coming year.

Around 29 percent of respondents consider their current business situation to be bad, while in 2022 only 13 percent said so. In contrast, some 35 percent expect their business situation to be better in 2024 than in 2023, compared to just 26 percent last year. The number of companies that intend to cut staff has also increased, with 14.5 percent planning to do so, around three times as many as a year ago. The number of those intending to boost staff has remained stable at around 45 percent. Some 33 percent plan to spend more on R&D in 2024 (2023: 39 percent), while 18 percent plan to reduce such spending (2023: 11 percent). The number of respondents who think the current political climate is bad for biotech companies has more than doubled, from 15 percent to 35 percent. Company directors do not expect any significant changes as far as the future political climate is concerned.

Oliver Schacht, Chairman of the Board of BIO Deutschland, stated: “Our companies faced exceptional challenges in 2023. Capital markets were difficult, energy costs continue to be high and qualified staff are hard to recruit. This situation is reflected in the findings of our trend survey. It is remarkable that many company directors do not expect the situation to get any worse, but believe there are signs of a turnaround. Yet they are still cautious when it comes to investments, and more job cuts are also planned, but these will remain limited.”

Viola Bronsema, Managing Director of BIO Deutschland, added: “The trend survey shows that the assessment of the political climate for our industry has again deteriorated significantly over the previous year. This is understandable, as our government has still not made biotechnology a priority, even though bodies such as the Future Council of the Federal Chancellor have recognised the importance of the technology. Something urgently needs to be done about this. Biotech companies are major drivers in the value chain of therapeutic development, of the sustainable bioeconomy and of the circular economy.”

https://www.bionity.com/en/news/1182472/biotech-industry-financing-remains-stable-turnaround-on-the-horizon.html