Biotech Startups Find Hospitable Climate for Growth in Jena

Thuringia’s biotech startups are supported by incubators such as this one in Jena.

Until recently, Germany was a tough place to start a biotech company, There was no venture capital money, little research in the life sciences outside the big drug firms, and investor confidence that was limited to electronics and telecommunications.

With the aim of unleashing the pent-up potential in Germany for becoming a biotech powerhouse, a government program known as BioRegio was launched in the mid 1990’s to funnel German government money into promising regions to support the growth of biotech companies there.

The cities of Heidelberg, Cologne and Munich won the competition but special mention went to the town of Jena in eastern Germany.

Much of the town’s success obtaining support in the BioRegio competition was due to the highly skilled technicians there who had worked at the world famous Carl Zeiss optical center, according to Dr. Klaus Ulrich, Managing Director of Jena’s incubator center, BioCentiv GmbH.

Today, Jena (pop. 100,000) is one of the biotech boomtowns of Eastern Germany with 32 new companies of which 7 are publicly traded.

The companies tend to be specialized in the field of bio-instrumentation. The three basic ingredients that biotech entrepreneurs need – human resources, cheap lab space and money – can be found in Jena.

For brain power, there are six major institutions in the area that supply the scientific know-how to bring together the biotech and optics expertise, for example, that supports the bio-instrumentation startups.

For lab space, there is BioCentive GmbH, an incubator center financed by a private foundation and the State of Thuringia,that provides important low cost office space under leases that can run up to 8 years.

A third important factor- money- has come from venture capital firms such as DEWB. In 1997, Jena-based Jenoptik AG became the majority shareholder of DEWB (Deutsche Effecten-und Wechsel-Beteiligungsgesellschaft AG), a distressed one hundred year old bank that carried the bulk of its assets in real estate.

According to DEWB executive committee member Ms. Sabina Ahlers, the original plan called for Jenoptik to manage DEWB’s real estate assets. Instead, DEWB evolved into a highly successful venture capital company that is now one of the fastest growing VC firms in Germany and simultaneously the largest bank-independent venture capital firms in eastern Germany.

DEWB, which has invested in more than 30 high tech start ups so far, has become a major reason that many new companies have clustered around Jena.

Among the biotech companies making waves in the Jena biotech cluster are:

Unique-m.o.d.e. AG supplies miniaturized high-power diode laser systems based on wide-stripe laser diodes (sincle emitters).

Dyomics GmbH makes dyes that aid drug development.

CEO Dr. Torsten Scheller says the technology increases the beam power or brightness of the laser thus vastly improving its quality. The system has been applied in a wide variety of uses, such as in printing, optical fiber and telecommunications, and medicine.

“Fiber optic cables are limited to about 150 km before the transmission has to be amplified,” says Dr. Scheller. “With our system, the transmission can go up to 400 km before amplification is needed.” For further information, see www. unique-mode.de.

Integrated Genomics, Inc. is a Chicago-based bio-informatics company that has applied genomics methods to deduce the function and identity of cells in plants, fungi and mammals.

The process helps researchers find new receptor targets to develop new drugs for the pharmaceutical industry. The process has also been applied to making therapeutic proteins for the bulk production of citric acid for the food industry.

According to Managing Director Dr. Thomas Wagner in Jena, much of the sequencing and bio-informatics work is done in Jena while the company’s Chicago office conducts biochemical research.

Integrated Genomics’ American customers include Archer-Daniels-Midland, Dow Chemical, the University of Washington and the National Institute of Health.

DEWB purchased an eight percent stake in the company in January 2001, its first venture capital investment in an American biotech firm. For further information, see www.integratedgenomics.com.

Dyomics GmbH was founded less than two years ago to develop specialized dyes for the diagnosis of genetic defects and for the high throughput screening of new drugs.

CEO Dr. Peter Czerney says that many of his competitors are restricted to certain customers his company can develop “tailor made” dyes for bio-analysis and related fields. For further information, see www.dyomics.com.—