BioWorld International Correspondent

Leaders from business and politics offered contrasting views of the state of German biotechnology at the BioTechnica Business Forum in Berlin.

Edelgard Bulmahn, minister for education and research, emphasized the role that public policy can play in supporting the sector, saying, "Public funds are one way to drive growth in selected areas."

Germany's federal government has stood up for biotech, she said, particularly since 1998 when the current coalition took office. In the intervening six years, public financial support for the sector has increased by 80 percent to nearly €200 million annually. Including expenditures on medical research brings the sum to more than €1 billion in institutional and project support. She added that, looking forward, the public sector will be increasing its engagement with nanobiotechnology.

"Technologies that are very differentiated today will tend to coalesce," she said.

Bulmahn also said Germany's national genome research network advances both clinical and fundamental research and she praised the development of 25 designated biotech areas, called BioRegios.

The business leaders who followed the minister's presentation echoed persistent critiques of the German approach.

Thomas Klein, CEO of Noxxon Pharma AG, said that the climate for therapeutic biotechnology is much better than that for agricultural biotech, "which is getting politically killed." The legal framework for work with stem cells also is in need of improvement, he said. "Within the government, things need to be handled differently." At present, Germany has some of Europe's most restrictive laws governing human embryos and stem cells.

Bulmahn was right about the framework, Klein said, "but innovation is really only innovative if the market takes it up."

"Germany needs closer cooperation between pharma and biotech," he added. In his view, that cooperation should begin before Phase II trials. "This is an area where public support, including funding for clinical trials, could help."

Horst Domdey, CEO of Bio-M AG, highlighted a move by the French government in early September to encourage life insurers to invest in private equity. The change will bring at least €6 billion in new investments. How much of that will go to biotech is uncertain, he said, but it presented a clear case of public action with potential benefit.

Domdey also cited German firms that were privately financed well before they had proof of concept, an approach he found suboptimal. "It's absolutely necessary to have support mechanisms that are purely support, and not just another form of financing," he said.

Rainer Riess, a managing director with Deutsche Boerse AG, drew another contrast, saying London's Alternative Investment Market was a good example of policy support for biotechnology. "Political authorities throughout Europe should follow that example," he told BioWorld International. "The tax concessions allow for a smaller risk premium. It's a good way to get capital to small and medium-sized enterprises. Germany should consider whether this might be a better use of public funds." Riess added that the segmentation of the Deutsche Boerse allowed for companies to raise capital in a similar fashion.

The business leaders also spoke in favor of greater sized German companies. "The basic problem is that the companies haven't done the mergers necessary to reach critical mass," Domdey said. That isn't a correlation to head count, he told BioWorld International, but to the size of the pipeline. German companies were not getting there for a variety of reasons, including personnel roadblocks and the unwillingness of investors to take short-term losses. "This unwillingness could be one of the most important elements for the near future" standing in the way of further consolidation, he said.

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