Two German companies, BioNTech And Curevac, are at the forefront in the global race for a COVID-19 vaccine.

Two German companies are at the forefront in the global race for a COVID-19 vaccine. But the potential of top German research could be used much more effectively, especially with the right level of investment.

Germany’s biotech industry suddenly finds itself at the center of global discourse. BioNTech, based in Mainz, and its US partner Pfizer have developed a highly promising COVID-19 vaccine. Curevac, from Tübingen, says it will have the “best, if not the fastest” vaccine within a few months.

What makes these two German vaccine pioneers so successful? They are backed by billionaires like the Strüngmann brothers and Dietmar Hopp, who have already made so much money in their lives that they are not dependent on a quick return.

SAP co-founder Hopp has invested hundreds of millions of euros in Curevac over the past 20 years without a single drug or vaccine based on the mRNA method being approved. Same story with BioNtech and its US competitor Moderna, which also rely on messenger substance or messenger RNA technology.

Persistence and millions

Twins Andreas and Thomas Strüngmann became billionaires when they sold their pharmaceutical company Hexal to the Swiss pharmaceutical giant Novartis. At the time, they faced criticism because Hexal produced “generics” — that is, copycat drugs for which patent protection had expired. Since then, they have relied on innovations with completely new active ingredients, which they finance. Since BioNtech was founded 12 years ago, the pair have invested hundreds of millions of euros in the company in addition to their expertise.

“The Strüngmann brothers and Dietmar Hopp did something extraordinary: They invested a lot of money right from the start, although at that point in time the mRNA technology was still at a very, very high risk level,” Siegried Bialojan, biotechnology expert at the consulting firm EY, told DW. “They took this risk on themselves when no other venture capital investor would have touched it at the time. You can’t give them enough credit for that.”

In the US, venture capital (VC) funds worth billions are financing innovative companies, including those in biotech. In the case of Moderna, which emerged from basic research at Harvard University in 2010, the VC fund Flagship Pioneering, which specializes in the health sector, is on board. It is headed by biochemist Noubar Afeyan, a Lebanese-born US-Armenian and MIT graduate, who is making a big impact in the US biotech scene. His $34 billion fund is currently invested in around 40 biotech companies, according to his own statements.

More venture capital, but not for biotech

Biotech startups in Europe and Germany can but dream of such backing. Although more money is available year after year in the form of venture capital, little of it goes into the biotech sector, says Bialojan.

“At EY, we did a study at the beginning of the year: Venture capital for startups. And the amazing thing is: it’s not so much because there is no venture capital. It’s because of the allocation, where you invest. Because of the €6.2 billion [$7.4 billion] for startups in Germany, only about 1.5% goes to biotech.”

This corresponds to just over €90 million for biotech startups across Germany. That’s peanuts compared with the equivalent of almost €30 billion that a single VC fund like Flagship Pioneering puts into US biotech companies.

And although 2019 was the second-strongest year ever for biotech venture capital in Germany, more than 60% of that came from a single financing round at BioNtech.

Boost for biotech in Germany too?

Siegfried Bialojan hopes that the success of BioNtech and Curevac in Germany will mean that the possible opportunities of investment will be recognized. Only a few countries in the world have such a broad research landscape as Germany. State funding for basic scientific research is not the problem either, emphasizes Bialojan. “There is huge potential from research, from the academic environment, which is funded very widely. But it cannot be that so little comes out in the end because we have a nonfunctional ‘biotech ecosystem'”, criticizes the EY industry expert who heads EY’s German Life Science Center in Mannheim.

Here, too, one can learn a lot from the example of Curevac and BioNtech, says Bialojan.

“The question is: At what point does an investor get involved? And what can they do in the early phase in order to set up such a startup correctly from the outset?”

It is primarily about the “translation” of a research idea like that of the biologist and Curevac founder Ingmar Hoerr at the University of Tübingen. Or the work of the two BioNtech founders, the medical couple Ugur Sahin and Özlem Türeci, at the University of Mainz. “Germany has to get better at this translation,” demands Bialojan. “When developing a research project into a company, we have exactly the critical point: How can I translate these great ideas from the academic world into commercial development as professionally as possible? And of course such people can play a major role in this.”

“The interaction between Thomas Strüngmann and Ugur Sahin is certainly a prime example of the interaction between a corporate and marketing professional and an ingenious cancer researcher,” emphasizes the EY expert.

“We have a top scientist, but was taught from the beginning how to set something up. I know Ugor well, he’s not a real businessman, he doesn’t even want to be. Rather, he’s a scientist who takes it very seriously. But you have found a construct where these other functions are done very professionally.”

Incubators reduce risk

Several initiatives have been launched to give entrepreneurial support to biotech startups that don’t have billionaire backing. In Dortmund there is the Lead Discovery Center (LDC), a spin-off of the Max Planck Society. TRON was launched in Mainz.

The Biopharmaceutical Research Institute for Translational Oncology at Johannes Gutenberg University, in turn, is closely related to BioNtech founder Ugur Sahin, explains Bialojan. “And both companies are working very carefully to prepare academic projects for commercial development,” he says.

There are many of these initiatives in the US, including in the biotech Eldorado near Boston. There, German doctor Johannes Frühauf founded Biolabs, a nonprofit incubator for startups in the life sciences.

The offer ranges from the provision of a turnkey research laboratory to advice from long-serving industry experts and experienced startup entrepreneurs who put founders in touch with experts on licensing issues and decision-makers in large companies.

The first European branch is currently being built in Heidelberg, Frühauf’s old home.

“Biolabs selects the best startups and advances them in the most capital-efficient manner. This is extremely attractive for investors, including pharmaceutical partners. These are models that function smoothly in the US and that we are now trying to bring to Germany”, summarizes Bialojan.

There is a very promising approach with the Bonn-based high-tech startup fund, where young companies from the medical sector can also get funding. The fund is supported by state money and private capital.

With the search for a vaccine against COVID-19, the subject of biotech has finally reached a political level. But it is even more important that the wider population has realized how great the opportunities of biotechnology are. That is almost even more important because in the end, the population influences politics.

Originally published at DW