HAMBURG, Germany _ The ministry of education,science, research and technology has launched a newbiotechnology funding program here designed toencourage the cooperation of research institutions, clinics,biotech companies and financing institutions.

As many as 20 projects will receive up to 50 percent oftheir costs for six months in the new program calledBioRegio. The maximum funding will be 100,000 DMeach. The next phase of the program starts with acompetition. By fall of 1996, a jury will choose threeregions of Germany, which then will receive priorityfunding from the ministry for five years.

"Building the infrastructure for successful biotechnologycommercialization," said Ekkehard Warmuth, head of theministry's biotechnology program, "is the most importantstep now, since we want Germany to become a dominantforce in biotechnology by the year 2000." The ministrywants to initiate a "founding wave" in biotechnology,because Germany still lacks a more dynamicbiotechnology start-up community.

Warmuth said that research and working skills inGermany are excellent. The legal framework, he added, isaccording to European standards after the amendments ofthe German Gentechnik-Gesetz and related safetyregulations last year.

In accordance with these reports, the ministry stillidentifies weaknesses in transferring research results intoproducts, production technologies and services.Moreover, early stage companies can still find difficultiesraising money, although German venture capital fundingof biotechnology is the second highest in Europe andaccounted for around 12 million ECU in 1993, accordingto an Ernst & Young's European Industry Annual Report,1995.

The new program, Warmuth said, will systematicallyencourage efforts to develop and integrate biotechnologyresearch and development activities within regions."There are already concentrated regional activities arounduniversities and major research institutions like inHeidelberg, Munich, Hamburg and the Ruhr area,"Warmuth told BioWorld Today. "We invite all regionseager to develop biotechnology to formulate their profilesand perspectives. We offer them support to bundle theiractivities."

Regional development in this program means more thanjust cooperation between research institutions andbiotechnology companies. To participate, the regionshave to identify services like patent offices, advisorycenters within financial and public administrations anddata nets. In addition the ministry will take into accountpast activities of the regions like measures to attract orstart biotech companies, approving practices and thereadiness of banks and investors to offer venture capital.

Investors Remain Wary

Warmuth said he hopes to encourage banks andcommercial administrations to obtain biotechnologyexpertise to deal with biotechnology investmentsproperly. "Still institutional investors hesitate too often totake an interest in technological progress such asbiotechnology."

BioRegio is not the only program to supportentrepreneurial biotechnology companies. In 1994, theresearch ministry created a research cooperation programtogether with the Arbeitsgemeinschaft industriellerForschungsvereinigungen AIF, in Berlin, a working groupof more than 100 German research associations.

To be admitted to the program, projects have to be highlyinnovative and bear considerable technical risks; theyshould lead to a marketable product. Small companiescan obtain funds up 600,000 DM to cooperate withanother company, to order research commissions or toexchange personnel with research institutions.

The Kreditanstalt fr Wiederaufbau, a state fund based inFrankfurt, has just restructured a funding program tosupport small technology companies by refinancinginterests or by coinvesting together with the federalDeutsche Ausgleichsbank.

Including BioRegio, German biotechnology fundingprograms now provide more than 1 billion DM. n

-- Ludger Wess Special To BioWorld Today

(c) 1997 American Health Consultants. All rights reserved.