Bildnachweis: Insempra, Forbion.
Biotechnology is one of the most promising key industries – with the potential to achieve medical breakthroughs, establish new production processes and shape a sustainable economy. The coalition agreement of the new German government formulates ambitious goals, but so far, it lacks a recognisable plan. BIO Deutschland’s current position paper therefore sets out specific measures to effectively promote the industry.
The German government has already initiated the first points of the coalition agreement with the draft act for an immediate tax investment programme. In this context, degressive depreciation for the years 2025, 2026 and 2027, followed by a gradual reduction in corporation tax, are being introduced; an important stimulus for the entire German economy, but not specific enough for the needs of research-based biotech companies. We also very much welcome improvements to the research allowance with a gradual increase in the assessment allowance to EUR 12 million and the flat-rate consideration of overheads and operating costs. Here, too, there are industry-specific problems that are not being directly addressed or improved.
Institutional investors urgently sought
Venture capital is essential for many biotech companies because their research and development is extremely capital-intensive and they do not generate any revenue for years. The coalition aims to close financing gaps in the area of growth and innovation capital, particularly for SMEs and scale-ups, with a fund of funds, the Deutschlandfonds. To this end, at least EUR 10 billion of equity capital is to be provided through guarantees or financial transactions, leveraged to at least EUR 100 billion with the help of private capital and guarantees and provided in various modules. These modules are not mentioned in the coalition agreement. At this point, the Biotech Future Fund called by BIO Deutschland should be recommended to those responsible. Whether and to what extent private capital can be leveraged depends on the specific objectives, design and implementation. In any case, it is important to differentiate the Deutschlandfonds from the Future Fund. The coalition also aims to stabilise the latter and – also welcome – more than double investments by investors in the WIN initiative to over EUR 25 billion and leverage them further with guarantees from the federal government. Unfortunately, there is still no actual commitment from the almost 20 insurers who signed up to the WIN initiative in November 2024. If it remains a declaration of intent, the project will only ever exist on paper.
Further incentives for private capital and deregulation needed
The current BIO Deutschland paper provides a number of concrete proposals for mobilising private capital in Germany. However, it is also important to simplify existing regulations in the area of money laundering and to systematically digitise processes with the aim of eliminating the high levels of bureaucracy. We will closely monitor the upcoming legislative processes. After all, if politicians want to make Germany the most innovative biotechnology location – as can be read on page six of the coalition agreement – then it will not be possible without our member companies (and a functioning investment ecosystem).
About the authors:
Jens Klein is founder & CEO of Insempra, a Munich-based biotech firm producing cosmetic & food ingredients sustainably at scale. He was CEO of AMSilk, making vegan silk polymers, and held roles at Evonik, Hanse Chemie, nanoresins, and Fresenius.
Holger Reithinger is General Partner at Forbion, a leading European VC firm, heading its German office. With 25+ years of life sciences investing, he has held many board roles. He previously worked in product development at Biometra/Whatman (now GE Healthcare) and sits on the High-Tech Gründerfonds investment committee.
Jens Klein und Holger Reithinger are leaders of the ‘Financing & Taxation’ working group at the BIO Deutschland association.
