A new deal for biotech – a call for action

A column by Dr Sascha Berger, Partner, TVM Capital Life Science

Bildnachweis: TVM Capital.

Germany is on the verge of significant change with Angela Merkel’s administration ending after almost two decades of economic growth and stability. Most agree that Germany needs a phase of infrastructure modernisation, broader digitalisation, and innovation.

I have heard a lot of discussion on climate action at various levels, higher public spending, and social and tax reforms. These are essential topics, but I find it striking that biotechnology has not yet been a relevant item of discussion. After all, it is the industry that helped overcome the most severe global crisis in recent experience. BioNTech is on its way to becoming a household name in Europe. In Germany, its founders have even been awarded prestigious national awards to honor their achievements – and rightfully so. You might argue that this shows the industry already receives the attention it deserves, that government support for the biotech industry in Germany is already on a competitive level compared to other European countries and globally. If only this was the case. A 2019 McKinsey study found that biotech start-up activity in Germany has even decelerated over the past few years.[1]

As a venture capital investor, my daily experience is the following: Europe is home to world-class science, research, and a well-educated workforce, a solid base for research, innovation, and clinical progress. Yet, Germany does not provide a level playing field for biotechnology companies and their financing compared to other European countries. It is high time for change by encouraging early-stage investment into biotechnology and the life sciences and facilitating and fostering early-stage commercialisation based on strong IP. We need political support that enables investment in Germany. With a new administration in place that recognises the power of advocating in the name of innovation and modernisation, we might be able to take a big step in this direction and, above all: do it now.

I see two essential agenda items that decision-makers should consider over the next few years: boost the European life science venture capital ecosystem, and maintain a reliable legal framework. Both will ensure and increase longterm investments by private, professional life science investors. The European Investment Fund (EIF) and the German KfW are already active as investors in various European VC funds, but what if their commitments could be multiplied?

Investments in critical energy and transportation infrastructure are certainly needed, but “a new deal for biotech” raising additional, dedicated capital in significant volume will spur massive innovation in the healthcare sector. Even more importantly, this new deal for biotech will help to translate innovation into tangible solutions for patients, families, investors, and society at large. Along with additional funding, the current regulatory framework needs to be updated and ideally incentivise investments into novel concepts. Naturally, Germany must act in a European context – this is why I am active in various pan-European life science industry initiatives. Early-stage life science investors, and incubators that drive innovation, must be heard.

 

[1] Biotech in Europe: A strong foundation for growth and innovation, McKinsey, August 23, 2019.

Über den Autor / die Autoren

Dr. Sascha Berger

Dr. Sascha Berger ist Partner bei TVM Capital Life Science, einem der Pioniere für innovative Venture-Capital-Finanzierungen für Biotechnologie, Medtech, Diagnostik und Digital Health, mit Standorten in München und Montreal. Seine Schwerpunkte liegen in den Bereichen Dealflow, Due Diligence und Transaction Management. Er verfügt über umfangreiche M&A-, Strategie- und Transaktionserfahrung. Dr. Berger studierte Technologiemanagement in München, Singapur und Boston, hält einen Diplomtitel der Technischen Universität München sowie einen Doktortitel in Banking & Finance und ist ein engagierter Triathlet.