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German biotech sector sees upswing near year-end

Published 10/05/2009, 08:13 AM
Updated 10/05/2009, 08:15 AM
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FRANKFURT, Oct 5 (Reuters) - German biotech companies are expecting a year-on-year gain in revenues towards the end of 2009 but full-year sales will stay below 2008 levels, an industry group said.

Sales in the fourth quarter would likely rise year-on-year, the German association of Biotechnology Industries said on Monday, citing a survey of about 500 biotechnology companies.

"The trough has been passed," said the group's chairman Stefan Marcinowski, who is also in charge of BASF's crop protection business.

The financial crisis has by and large spared Germany's biotech companies and there are no signs of a credit crunch, because most firms rely on the non-cyclical healthcare industry, the association added.

About 44 percent of the companies that took part in the survey carry out medical research and development, 9 percent are developing industrial chemicals from micro-organisms and 5 percent are working on genetically modified agricultural plants.

Germany's healthcare biotech sector has produced few success stories, with MediGene and MorphoSys marking notable examples of companies with marketable products.

Most companies in Germany with an exclusive focus on biotech continue to rely on private risk capital, the stock market and government research grants for funding.

Government support has stagnated while equity inflow from the capital market and private investors has almost halved over the four years through 2008, the German biotech association said.

Larger companies that combine biotech development with other businesses, such Bayer, BASF and Merck KGaA were not contacted for the survey. (Reporting by Ludwig Burger; Editing by Rupert Winchester)

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