Connection between the pharmaceutical industry and biotechnology
Biotechnology is essentially relevant from the standpoint of the pharmaceutical research and manufacturing phase. The traditional Hungarian pharmaceutical industry essentially carries out synthetic manufacturing activity. Significant results and experiences have accumulated in this area. In recent years, biotechnology research and manufacturing have become increasingly important (but still marginal relative to the traditional synthetic pharmaceutical industry) areas from the standpoint of the Hungarian pharmaceutical industry.
State of Hungarian biotechnology
The importance of the biotechnology sector to Hungary is supported by the fact that biotechnology is one of the world’s fastest growing sectors, which, due to its highly knowledge-intensive nature, creates knowledge-based jobs. Conditions in Hungary are conducive to the consolidation of the biotechnology industry (world-class basic research results, highly qualified researchers, outstanding traditions of the pharmaceutical industry and strengths in related industries). The leading Hungarian biotechnology companies target mainly export markets (the EU, USA and Japan). Their presence in the world not only enhances the reputation of Hungarian biotechnology, but of high-tech industries as a whole.
Among the 14 countries that have joined the EU in the past five years, the largest and fastest-growing companies in the region are to be found in Hungary. Hungary has the largest number of employees and the highest level of intellectual value creation in the industry (see: EuropaBio study).
The number of biotech companies in Hungary at present:
Core biotech: Approximately 60 core biotech companies operate in the Hungarian biotech sector. The companies are grouped in large university towns: about 60% in Budapest, 20% in Debrecen, 10% in Szeged, and the rest in Pécs, Kaposvár, Gödöllő, Veszprém and so forth. More than 90% of biotech firms are engaged in the area of red biotech.
In 2007, Richter Gedeon, the only Hungarian-owned pharmaceutical company, made the strategic decision to enter the field of biotechnology by setting up biotechnology R&D and manufacturing facilities. To this end, it established a joint venture with Hamburg-based Helm AG. The acquisition, worth EUR 22.9 million, involved a modern plant manufacturing recombinant proteins specialised in the bacterial branch of biotechnology, as well as research-development, laboratory, and pilot capacities. In 2008, Richter commenced its new, large-scale biotechnological investment, worth more than HUF 15 billion, in the industrial park in Debrecen.
The establishment of white and green biotech firms via the spin-off process has just begun. The process is expected to accelerate in the coming years.
Biotech in the broad sense of the word: The number of non-core biotech firms and medtech firms is approx. 70 and 50, respectively. The number of firms which in the broad sense of the word can be considered biotech is approx. 150.
Age distribution: About one-third of the firms were established between 2005 and 2008 as a result of the university spin-off training wave prompted by the Innovation Act of December 2004. These new companies are largely micro-enterprises in the pre-entry phase with fewer than 10 employees. This average size is considered completely normal by international standards.
Business model: Seventy-five percent of the business model of Hungarian biotech firms is service or technology sales to other biotech firms or pharma companies on the global market. Only about a quarter of the firms carry out their own biological drug development, mainly due to a lack of funding. The majority of biotech firms target global niche markets, where they are often market leaders with employee headcounts in the double digits. The sector has a strong network of contacts with universities and companies in the EU, the US and Japan.
Employment: The number of those employed by core biotech firms is approximately 900 (of which ~ 500 people are employed in R&D). However, if related areas are included (CROs, laboratory and medical device developers and sales representatives, bioremediation companies and Hungarian subsidiaries of international biotech firms), then the number comes out to 4,000. The firms in Hungary, in line with the situation in the US and Europe, typically work with a low employee headcount.
Click here for more information on the companies of the sector: www.hungarianbiotech.com
Umbrella organisation of the biotech sector:
Magyar Biotechnológiai Szövetség (Hungarian Biotechnology Association), www.hungarianbiotech.org
The aim of the Hungarian Biotechnology Association is for the biotechnology sector in Hungary, as is the case in more developed countries, to become a strategic sector as soon as possible, and to contribute to realising the social and economic goals of Hungary by supporting the development of the life sciences field in Hungary and the prompt utilisation of scientific results.
HITA’s role in promoting the Hungarian biotechnology sector on an international level
HITA has made serious and effective efforts to promote the Hungarian biotech sector. HITA supports the appearance of firms at international conferences abroad and in several cases provides a joint Hungarian booth at major professional conferences (e.g. BIO and BioEurope). In the course of planning HITA, in cooperation with the Hungarian Biotechnology Association, decides on the joint Hungarian appearance. In recent years, HITA has also organised roadshows with the Association at the major centres of the biotech industry.
Magyar Biotechnológiai Szövetség
6726. Szeged, Közép fasor 52.
Magyarországi Gyógyszergyártók Országos Szövetsége
1134. Budapest, Lehel u. 11.
Orvostechnikai Eszközök Gyártóinak és Forgalmazóinak Szövetsége
1034. Budapest, Tímár u. 21.
Magyar Spin-Off Vállalkozások Szövetsége
1031 Budapest, Záhony u. 7.
Graphisoft Park, N épület I/11
Magyar Vegyipari Szövetség
1036. Budapest, Bécsi út 85.
Magyar Medikai Gyártók és Szolgáltatók Egyesülete
1146. Budapest, Szabó József u. 12.
PharmAgora Életminőség Klaszter
8230. Balatonfüred, Völgy u. 41.
Goodwill Biotechnológiai Klaszter
6724. Szeged, Czerzy Mihály u. 32.
1097. Budapest, Illatos út 9.
HITA sector consultant: Viktória Rita Gyukics, firstname.lastname@example.org