Biotech: Saxony targets a place among Germany's top three

Indeed, Saxony has the most vibrant economy of any of the states in the former Democratic Republic with growth of 2.1 per cent in 2004 – making it the only eastern state to exceed the national average. Even so, unemployment remains high and investment is still relatively scarce.

Biotech firms in Saxony

It is, said Georg Milbradt, Minister of the Free State of Saxony, a meeting place of Baroque and high tech. “This is the only biotech region in Germany that has registered continued growth, outpacing even the economic giants in Bavaria,” he told 1,500 pharma and biotech executives at last year’s Bio-Europe conference held in Dresden.

Following reunification Saxony first set sights on developing its microelectronics sector, succeeding in attracting the chip manufacturer AMD to build a plant, and leading Milbradt to claim Saxony is the silicon capital of Europe. “We want to emulate that in biotech.”

Back in 2000, the state government agreed a €200 million five-year investment in a so-called “bio-offensive attack” programme, Biosaxony, in bid to attract inward investment to develop the biosciences sector.

“When we started the programme there was considerable criticism,” said Milbradt, “But we have managed to avoid the mistakes others have made.” Since Biosaxony was established the number of staff employed in biotech has tripled, and, in contrast to peers elsewhere in Germany and across Europe, no Saxon biotech company has gone bankrupt, and none has moved abroad.

The €200 million was invested in three areas: to build infrastructure by establishing two incubators, in Leipzig and Dresden, with 20,000 square metres each; driving R&D by creating 12 professorships dedicated to the life science; and setting aside €60 million for research projects and supporting SMEs.

Bioincubators

While the bioincubator in Leipzig concentrates on healthcare applications, that in Dresden specialises in bioengineering. “We focused on where we could bring a critical mass of people together, and targeted funds at applications-oriented research,” said Milbradt.

The €200 million has not only promoted development of the sector, it has attracted €400 million in inward investment, with the jewel in the crown a €100 million flu vaccine plant which GlaxoSmithKline is building in near the centre of Dresden.

By the time the €200 million programme came to an end last year, the number of biotech companies had doubled to 54, while the number of employees had tripled to 1,000. Six pharmaceutical companies and 100 specialised services providers bring total employment in the sector to 5,800

“Last year may have been the end of the official program but that doesn’t mean the government is no longer committed,” said Ann De Beuckelaer, director of Biosaxony, in an interview. “The funding of the research projects will continue over the few years and the state government is negotiating for the construction of two research centres.”

“Compared with Munich and Berlin we are still a small region,” said De Beuckelaer. “But now Saxony ranks seventh among the 25 regions when five years ago it was thirteenth. We definitely want to get into the top three of Germany in five years.”

Most of the 54 companies have European roots, and the next objective is to attract companies from North America and Asia, especially Japan.

“Companies that are thinking about moving to another location first look at scientific competency in that region,” said De Beuckelaer. “So we usually look to start a research collaboration and if they work well, then a company would think about setting up a base there.”

And while companies are deciding whether Saxony is the right place for setting up a base, a start-up package, including a fully equipped office, a guest apartment and transport pass for the city for three months is offered for €1,499.