German biotech - strong and steady

The survey from Germany's Federal Statistical Office shows there are 1,208 companies operating in the country's biotech sector. That's more than in any other European state. Of those companies, 572 can be classified as biotech core businesses "predominately using modern biotechnological processes". Some 12,000 people are employed by these core businesses, and 11,000 more are working on biotech projects within large life sciences companies.

Sales of biotech products by companies in Germany gathered pace in 2004. Compared to 2002, core businesses boosted their revenues by a handsome 9 percent and the biotech units of life science companies posted a 3 percent gain. Not counting the activities of consultants and financial service providers in the sector, sales of biotech products by companies in Germany amounted to some 5.9 billion euros. Just over a billion of that amount was generated by biotech core and combined businesses. The total sales figure includes revenue from 382 companies classified purely as "outfitters" (suppliers) as well as 38 firms belonging to a hybrid category of core business and supplier.

Altogether some 45 percent of personnel in the country's core biotech businesses work in research and development (R&D). Nearly a quarter of these companies have fewer than 5 employees. While most core companies trimmed staff in the period between 2002 and 2004, the biotech units of large life science companies increased staff numbers by 16 percent.

The trend toward consolidation and expansion of larger companies has been welcomed by many members of Germany's biotech industry. Peter Heinrich, president of the German biotech industry association BIO, says "investors should be encouraging mergers and acquisitions because it is essential to build companies with critical mass". At a recent biotech conference in Dresden, Heinrich urged German entrepreneurs to make themselves more attractive to investors. "M&A should be seen as a success," he said.