Maintaining and reinforcing the expansion and potential of biotech innovation
Biotechnology is currently the industrial sector experiencing the most growth in the country. This sector of activities offers enormous potential in areas of innovation and employment. A large part of its revenues today is devoted to R&D. Specific measures are hoped for on the part of authorities to allow the bio-tech sector to achieve its full potential.
Context
With more than 10,000 workers, the biotech sector had turnover reaching approximately 3 billion Euros in 2006. Today, more than 140 biotechnology companies are active in Belgium, representing 7% of European biotechnology businesses, approximately 16% of European revenues and 10% of R&D expenditures. Of these 140 companies, more than 100 produce “pure” biotechnology. Most are spin-off companies, the majority being SMEs employing 50 to 200 workers. But there are also some larger companies.
Biotechnology comprises three areas of application: healthcare, or “red biotech” (80%); agriculture and agribusiness industries, or “green biotech” (15%); and industrial “white” biotechnology and the environment (5%). The sector expanded dramatically between 1997 and 2006: the number of businesses grew by 17% and employment grew by 10% each year.
Importance for chemistry and life sciences industries
essenscia and Bio.be, the Belgian association for the biotechnology industry, are convinced that this particular technology is to play an important role in consolidating and innovatively building on the knowledge and experience thus far acquired in the field of chemistry. Biotechnology intersects the pharmaceutical industry, life sciences, the oil industry, and the traditional industrial chemical industry. All of these areas hold promise to keep this sector thriving.
The challenges, however, are considerable. Lowering wage costs (especially through fiscal measures) to improving the competitiveness of our industry will play a decisive role in the final breakthrough of biotechnology.
Sector’s position
The state of Belgian biotechnology businesses is unique. A great many of them are spin-offs of universities and young, innovative companies (YIC). They have enormous difficulties in surviving (let alone developing) in the face of competition from neighbouring countries.
Recommendations
Bio.be focuses on the particular state of biotechnology in Belgium. In addition to reinforcing general measures recently adopted by the authorities, Bio.be recommends a series of actions specifically adapted to the needs of biotechnology businesses.
1. Measures for preserving businesses in Belgium :
• 150 % tax deductibility for R&D investments
• A 50 % tax credit for young, innovative companies and innovative SMEs
• Restitution of tax credits after 1 year if not compensated by taxable profits
Professional deductions
• Increasing the professional deduction to 50-75% from 25% for all holders of graduate and master’s degrees
• Increasing tax breaks on wage taxes deducted at the source to 100% from 50% for Young, Innovative Companies (YIC) and for SMEs (plus, extending « YIC » status to medium-sized enterprises with 50 to 250 employees)
2. Measures to attract businesses
Corporate taxes
• Non taxation of up to 75-85% of the income derived from patents (for patents delivered after 2006.)
• Extend the deadline for recouping “notional interests” (Notional interests are a tax break favoring equity investments.)
3. Specific measures
To create a stable, reliable qualitative legal framework to support business initiatives in the following areas:
Cell Therapy Technology (the use of human cells in therapeutic applications)
• Transposition of the European Directive with no restrictions
Biosimilars (biotechnology drugs that are «copies» of preceding original biotech drugs whose patent rights have expired)
• Appropriate identification of biosimilars
• No prescriptions on the name of the substance
• Substitution only on approval of previous prescribing physician
• Treatment of biosimilars as a specific category different from generic drugs
Drugs for rare diseases
• The establishment and recognition by authorities of a pilot consultative committee
Genetically modified organisms – co-existence (coexistence of genetically modified cultures with conventional and organic cultures without economic damage to the latter)
• Non-discriminatory regulation
• Freedom of choice for farmers (with possibilities of field testing)
• Freedom of choice for consumers
• The introduction of a realistic threshold for the presence of GMO residues
• Options with regional limits
• Conventions on responsibility
• The simplification of administrative procedures
Industrial Biotechnology
• The creation of a clear political vision by the government
Contacts :
Hugo Francq, Secretary General, Bio.be, hugo.francq@bio.be, tel 02 238 98 47