#TogetherAgainstCOVID19 - Interview with BIO Deutschland
Read our interview with BIO Deutschland's CEO, Dr Viola Bronsema, for our #TogetherAgainstCOVID19 series.
COVID-19 took the world by surprise – what role has BIO Deutschland played in the response to the outbreak?
BIO Deutschland assumed several important roles in the current situation. Early on, we identified our members that are actively involved in research and development to fight the corona virus and COVID-19. With this information we built a dedicated resource on our website (https://www.biodeutschland.org/en/corona-special.html). We took up the needs of the companies, not only of those that do corona-research, but also of those who work in other areas, and communicated the issues to the administration. We continuously evaluate the various industry relevant measures of our government and provide this information to our members. We keep track of corona-specific funding initiatives and also asked the government to significantly increase the financial resources in this regard. In order to give an overview of the industry’s corona research in Germany and bring international players in biotechnology, diagnostics and pharma together we are currently organizing the German Corona Showcase, a digital conference with company presentations and one-on-one partnering which takes place 23 to 25 June.
Many biotech companies across Europe have responded and show promising and highly innovative approaches in finding treatments against the virus. How does the biotech ecosystem in Germany fight COVID-19 and its consequences?
Our companies fight the pandemic from different angles. About fifty of our member companies indicated in a survey that they develop diagnostics, therapies or vaccines against corona. Many of them like CeGat, Mikrogen, QIAGEN, Roche or TETEC provide diagnostic tests for acute infections but also to assess the immune status. Others work on cures for COVID-19, for instance with the development of antibodies like Boehringer Ingelheim and Yumab or Evotec. Some also repurpose existing drug candidates that showed inhibitory activity against the virus such as Immunic or Atriva. Two of the leading contenders to develop a (mRNA) vaccines are in Germany, namely CureVac that will start clinical trials in June and BioNTech that already started the first in human vaccine tests in cooperation with Pfizer in April. The activity that unfolded in our industry to fight the pandemic is truly amazing.
Collaboration across borders, industries and stakeholders is not new to biotech, however it has become a decisive element in the European response to the virus. How did you see the role of collaboration increase and what lessons can be learned from it?
I think international cooperation is the key to our industry’s success. This has always been true. The cooperation between academia, biotech and pharma across countries is the driving force for innovation. Due to the long-standing cooperation within Europe through e. g. the Horizon programme and its predecessors or public-private partnerships, there are many established infrastructures, cooperations and funding programmes that can now be utilized and quickly redirected to combat the corona pandemic. In the race to find a vaccine Germany, France, Italy and the Netherlands just formed a coalition to ensure the production of a vaccine in Europe. The good and established networking of the industry within the continent is an advantage to accelerate the development of new therapies and vaccines.
The European national biotech associations are working together to connect & support those researching and developing treatments. Where do you currently see barriers for the development of biotech solutions in Europe?
I think we have great research programmes and generally a good environment for innovation in Europe. However, some of the existing frame conditions slow down biotechnological innovations and there is room for improvement. Just to give a few examples: The implementation of the EU regulation on medical devices (MDR) and the EU regulation on in vitro diagnostics (IVDR) and the adjustment to the respective new legal framework is in full swing and would be demanding in normal times, especially for small and medium-sized companies. In the current situation, however, it is almost impossible for companies to effectively advance a structured transfer of processes to the new legal framework in addition to the reactions to the corona crisis. As the pandemic unfolded, the EU Commission announced a postponement of the entry into force of the MDR by one year. This is great, but it would also be as important to postpone the entry into force for the IVDR. The changes of the latter are more serious and in the field of in vitro diagnostics research and development, the proportion of small and medium-sized companies is much higher. And it is the small companies in particular that are burdened by the conversion.
Another issue that has existed for some time is the EU GMO regulation. The emergence of genome editing or, as we call it in the context of plant biotechnology, new breeding techniques has challenged the current legislation. The ECJ ruling of 2018 made even more obvious that the respective EU-directive is out of date, but it is not clear when and how an adaption will be realised. This is a difficult situation for biotechnology companies, because they are not able to plan their business models reliably. SMEs in particular could make investments that would be lost if the legal situation changed. Here, it is important to provide companies with legal certainty quickly for their investments in the future.
A further challenge concerns the categorisation or financing of SMEs. The EU definition of SMEs treats companies that are linked via a joint investor as affiliated companies and are in fact put on an equal footing with corporations. This is not justified, since an investor does not run portfolio companies as one entity. This detail of the SME definition punishes especially successful companies that have managed to find an investor for their idea among the few venture capitalists invested in biotech in Europe.
Some of the issues arise also from competition among European countries. Through taxation or lack thereof states compete for the establishment of companies. This counteracts a common approach to foster innovation.
The longer-term effects of the crisis on the biotechnology industry in Europe will hit small-and medium sized companies and start-ups hardest. What is needed for a successful recovery of the sector in the short – and longer term?
In the short term we need unbureaucratic funding programs and loans. At the EU level, the European recovery plan could be helpful. Some start-ups and SME might also benefit from the additional 150 Mio. Euro approved for the European Innovation Council.
Generally, we need more and better incentives to invest in high-tech companies such as biotechnology. Unlike in Anglo-American countries, Europe lacks for the most part an innovation financing ecosystem due to there being little equity capital available for development and growth financing. Pension systems in Europe are usually financed on a pay-as-you-go basis, which means a key source of capital accumulation is lacking. This very source of capital accumulation provides the foundation for a very productive venture capital financing ecosystem, especially in the United States. Such an ecosystem involves traditional venture capital in the early stage and institutional investors that invest in innovative development through listed companies. These forms of financing open up the possibility for active VC investors to recoup their investment and make a profit through early-stage IPOs, and enable growth companies to be financed through the stock market up to market readiness or market penetration. There is a huge amount of capital and assets in Germany and Europe looking for investment possibilities. Insurers, pension funds and private individuals could contribute to innovative capacity by providing extensive inflows of capital. We need to create incentives for VC investment, create suitable capital-collecting institutions which could also lead to Europe Future Fund as a third pillar of pension provision. We fleshed these propositions out in more detail in a previous position paper (https://www.biodeutschland.org/en/position-papers/position-paper-on-financing-innovation-with-venture-capital.html).
The current crisis shows that companies that, in the past, could rely on sufficient funding to expand their R&D and to enter clinical trials are now at a clear advantage such as the German vaccine developers CureVac and BioNTech.
It is to be expected that venture capital funds and other private capital investors will decline due to the crisis. Therefore, incentives for investments are all the more important now.
And last but not least; we need more communication. Most of the people are not aware that biotechnology is the underlying technology behind all new medicinal approaches, be it diagnostics, vaccination or therapy. And, in addition, the general public does not know that it is mostly the entrepreneurial scientists who translate biological science into innovations for different industrial sectors. Not only for the healthcare industry but also for food and feed production and many other applications and sustainable products. Our role is also to stress again and again that biotechnology secures our future health and sustainability.
Dr Viola Bronsema, has been the Secretary General and CEO of BIO Deutschland, Germany’s Biotechnology Industry Association since 2006. With its 330 corporate members, the sector association represents Germany’s innovative biotechnology small and mid-sized enterprises (SME). Viola earned her Ph.D. at the Centre for Molecular Biology (ZMBH) at the University of Heidelberg, Germany, before training to become a Public Relations specialist. Since then, she has held a number of different leadership positions in pharmaceutical and diagnostics corporations as Eli Lilly and Roche Diagnostics.