Read the Conversation
Meeting Highlights:
- AI in Biotech: BioM is prioritizing AI to accelerate early-stage drug development. Startups see the value, but infrastructure, data access, and regulatory hurdles remain.
- Bavaria as a Biotech Hub: With top universities, global pharma players, and a skilled talent pool, Bavaria is emerging as a globally connected, innovation-rich ecosystem.
- BioM’s Role as Connector: Through events like BayOConnect and outreach programs, BioM brings together key stakeholders such as startups, scientists, investors, and policymakers to align efforts and drive collaboration.
- Policy Reform Needed: Prof. Dr. Ralf Huss urges reforms to make Germany more startup-friendly— modernizing legal structures, easing IPO paths, and encouraging public-private co-investment.
- Rising Success Stories: Startups like Tubulis and CatalYm show strong momentum. More could follow with better early-stage funding and bolder investor engagement.
EF: How do you evaluate this year, and what are the main priorities for the BioM cluster?
RH: The key priorities of the cluster had already been established before we encountered various changes, particularly political shifts in Germany and the United States. We were fully aware of the challenges related to ensuring a stable supply chain and guaranteeing the availability of essential drug supplies for the entire healthcare community.
Our goal has always been to drive continuous innovation and successfully translate research into sustainable products, creating a long-term, self-sustaining market. Rather than relying solely on external innovation or waiting for others to acquire our advancements, we aim to build upon our strong foundation of excellent science and research. It is essential that we take discoveries from the bench to the market, ensuring their full potential is realized.
We recognize that the market has evolved. There is now less focus on oncology and increasing interest in neurodegeneration, longevity-related research, and metabolic disorders. Given this shift, we are leveraging our accumulated strengths to develop and manufacture most of our assets on our own. While regaining our previously externalized market may be unlikely, we must retain and strengthen our position rather than lose ground to other regions.
To address these priorities, we have strongly emphasized integrating AI and data-driven approaches into our strategy for this year. The recent Nobel Prizes in Chemistry and Physics have only reinforced our belief that AI will play a pivotal role in accelerating drug development and transforming how we create new medicines.
EF: How do you assess the region’s approach to cutting-edge generative AI tools?
RH: There are different approaches to this. Startups and early-stage biotech innovators recognize the value of these technologies, but the challenge lies in accessing them. Implementing AI-driven tools requires extensive data and experience. Biopharma startups see the need, and as a cluster organization, we work to provide solutions.
However, it is not easy. The necessary infrastructure is complex, and regulatory frameworks have not yet been adopted. In silico trials, virtual control groups and AI-driven protein or mRNA synthesis remain largely untapped. There is significant potential, but convincing regulators to embrace faster preclinical development pathways is a key hurdle. While clinical development may not change immediately, AI could influence how trials are designed.
Another challenge we see is the gap between biotech and tech companies. Biopharma startups understand how AI can help solve their challenges, but many tech companies have solutions without clear problems to address. They develop algorithms, data curation tools, and cloud solutions but often struggle to apply them effectively in life sciences. Bridging this gap is essential for real progress.
A key part of this effort is education and training, ensuring a shared understanding and common language. When I teach medical students, chemists, biologists, and IT professionals, I often ask them to define a "solution," their answers vary widely based on their fields. This highlights the need to establish common standards and routines. This initiative has been a major focus for us this year, and we are making it an even higher priority moving forward.
EF: What factors make Bavaria an attractive biotech hub?
RH: BioM has been around for nearly 30 years, making it one of the first clusters in this field. Over these decades, we have built extensive experience and a strong network. Compared to other leading biotech hubs like Cambridge in the U.S. and the U.K., Bavaria stands out in several ways.
We have two top-tier universities—Ludwig-Maximilians-Universität (LMU) and the Technical University of Munich (TUM)—with over 100,000 students and more than 1,500 professors. These institutions offer strong medical, engineering, robotics, and IT programs, creating a rich talent pool. Additionally, Bavaria has a thriving mix of startups and established companies. Industry leaders such as Roche, AstraZeneca, Daiichi Sankyo, and MSD are expanding their presence, reinforcing the region’s reputation as a biotech hub.
One challenge we are working to address is attracting more investors willing to support high-risk ventures. Given our cultural background, there has traditionally been a cautious approach to risk. However, this is changing. More major banks, private equity firms, and family offices are taking an interest in Bavaria’s biotech sector. While they may not be fully convinced yet, we see growing momentum, and we are actively working to capitalize on it.
EF: Could you tell us about the BayOConnect event?
RH: As I mentioned earlier, we have a vast network of universities across Bavaria, with Munich at the center. While around 90% of biotech and biomedical activity happens within a 50-mile radius of Munich, there is also excellent science taking place in other regions. Recognizing this, we established the BayOConnect event to bring together all stakeholders in the community.
BayOConnect is an annual event taking place in Munich and serves as a platform where startups, leading scientists, policymakers, and investors can engage in meaningful discussions. We put brilliant researchers on stage alongside politicians and venture capitalists, encouraging dialogue and mutual understanding. Often, scientists are frustrated by investors' influence on company decisions, while investors are skeptical of researchers who contribute ideas but no capital. BayOConnect helps bridge these gaps and foster collaboration.
Beyond this, we also run initiatives like BayOTalks, which focus on specific topics such as financing, neuroscience, or AI. Additionally, we have launched "From Science to Start-up – BioM Goes on Tour," where we visit universities in Bavaria to engage with researchers, encouraging them to consider entrepreneurship alongside their academic goals.
Our efforts are not limited to Bavaria. We actively connect with international biotech clusters, extending our reach across Europe and beyond. While Switzerland has its "Global Village" at the Swiss Biotech Day, we like to think of our initiative as creating a "Global Town" for biotech innovation.
EF: How do you evaluate BioM’s role in shaping health policy and driving progress in this area?
RH: We need to distinguish between pharmaceutical policy and broader regulatory challenges. We support many ongoing activities, particularly reimbursement and financial incentives. The German market is one of the most expensive and complex for drug approvals, making it difficult to introduce new medicines.
This is why we emphasize developing new drugs from within our own portfolio. One of our key efforts is engaging with both the federal and state governments to push for regulatory changes that make it easier to establish and finance companies. The German GmbH (limited liability company) structure, for example, is often seen as a deterrent by investors due to its restrictions on investment, expansion, and exits. While it is easy for founders to set up, the lack of reporting requirements and investment limitations make it less attractive to global investors.
Another challenge is Germany’s weak IPO landscape. The German stock exchange is hesitant to list small or nano-cap companies as they are considered too volatile and costly to trade. In contrast, markets like NASDAQ, Denmark, and the Netherlands are more open to smaller public companies, attracting greater investment.
We are working to change this mindset by advocating for more flexibility in Germany’s financial markets, particularly in Frankfurt and Munich, to encourage IPOs and attract private capital. While we do not officially influence policy, our role is to advise and highlight these issues to policymakers, ensuring they recognize the need for reforms that support innovation and investment in the biotech sector.
EF: Could you share some success stories from Bavaria?
RH: There are several success stories, but a few stand out. One is Tubulis, a company founded out of the Ludwig-Maximilians-Universität (LMU) Munich and the Leibniz-Institute for Molecular Pharmacology (FMP) Berlin. They have raised almost €200 million in venture capital and secured a milestone agreement with a major pharmaceutical company worth up to €1 billion. They specialize in antibody-drug conjugates and have developed a smart approach to designing technology that integrates antibodies, linkers, and payloads effectively. Tubulis started with BioM, participating in a BioM boot camp and receiving the BioM-coordinated m4 Award, which provided a EUR 500,000 grant as well as valuable visibility and community support.
Another example is CatalYm, a company focusing on immunotherapies, and iSPARC, which is currently conducting clinical trials at MD Anderson. These companies emerged from university research and benefited from the ecosystem in Bavaria.
While these success stories are promising, there is still room for growth. More cases like these could emerge if venture capitalists and public investors were more open to innovation and risk-taking. Public funding could play a crucial role in sharing risks, but currently, many public investment funds hesitate to take the lead. Encouraging them to do so would likely attract additional private investment.
On the technical side, bioanalytical companies such as NanoTemper have followed a different path, often bootstrapped and generating revenue from day one by selling their first devices to fund further development. The type of business and the challenges they address determine their growth trajectory. While Bavaria has seen great success, there is potential for even more, and efforts are ongoing to foster additional breakthrough companies.
EF: Biotech aside, what are your three favorite things about Bavaria?
RH: Of course, the Oktoberfest is one of my favorites. It is about the culture and the sense of community—when there is a table for 10, you can always find 20 people joining in. It is a great symbol of how we come together, although we do need to be mindful of the intoxication. Thankfully, non-alcoholic beer is becoming more popular.
Another thing I love about Bavaria is its international nature. Whether you speak Bavarian, German, English, or nearly any other language, you can easily get around in Munich. The city is open, young, and inclusive, and almost everybody understands English.
Lastly, it is the blend of tradition and innovation. While we still love our cars and motorcycles, we are also at the forefront of advanced technologies like nanotech. It is a unique combination of a rich engineering heritage with a growing focus on tech solutions.
