»No other region is better suited to this structural change«

The Leipzig region is facing a structural change. Experts advise on what role the healthcare industry can play.

Saxony and in particular the Leipzig region are facing major challenges. The traditional lignite industry is being phased out. How can structural change be shaped by healthcare? Which actors are at the start? And how can successful networking be achieved? A round table with Prof. Dr. dr Ulrike Koehl, Fraunhofer IZI, Prof. Dr. Thomas Neumuth, Innovation Center Computer Assisted Surgery (ICCAS), Prof. Dr. medical habil. Christoph Josten, Leipzig University Hospital (UKL), André Hofmann, biosaxony, Dr. Kerstin Stangier, Azenta Life Sciences/GENEWIZ, and Ivonne Wolff, Canopy Biosciences - A Bruker Company, German Registry: ZELLKRAFTWERK GmbH.

Platform Life Sciences: Mr. Hofmann, what distinguishes the life sciences location Leipzig?

Hofmann: Saxony has developed enormously in the life sciences context in recent years. The reason for this is, among other things, that people with a pioneering spirit live at the Leipzig location, with the urge to research and a doer mentality. Here research meets a culture of rapid approval and transfer, so that Leipzig has become the economic motor of biotechnology in Saxony. The local incubators, such as BIO CITY LEIPZIG with 36 tenants, are currently fully occupied from a wide range of life sciences in various stages of development. We support many start-ups on site and most recently we were able to set up our own accelerator program for smart medical products with the Medical Forge. In addition, however, several larger international companies have a development center or other forms of branch offices in Leipzig.

In Leipzig, the focus in the life sciences is clearly on cell and gene therapy. In addition, the location has strong expertise in the fields of medical technology, digital health and medical information and communication technology - for example in the development of 5G and 6G applications.

Ms. Stangier, the company Azenta Liefe Sciences, formerly GENEWIZ, made a conscious decision to locate in Leipzig. What was the reason?

Stangier: As part of our portfolio, we offer a range of services to our biotech and pharma clients with industry-leading turnaround times and competitive prices. We have a Europe-wide network that our customers can use to send their samples to us, sometimes via special mailboxes or service providers. These samples and packages are collected centrally at DHL, and all packages are shipped Europe-wide from Leipzig Airport, which is accessible XNUMX/XNUMX.

We also chose Leipzig because we are supported by biosaxony. It started with the search for suitable premises and ended with the search for employees. We have found that rental prices are cheaper than in other regions and that the labor market is more relaxed. The proximity to Berlin is also attractive.

Ms. Wolff, was cell power station located in Leipzig for the same reason?

Wolff: Zellkraftwerk is a spin-off from the Hannover Medical School. In addition to the central location, important factors for us when looking for a suitable location were scientific excellence and finding potential local cooperation partners. In Leipzig, all criteria were met and we were able, for example, to initiate or complete innovative research and development projects in the field of highly parametric cell analysis with the Fraunhofer IZI or the University of Leipzig. For Zellkraftwerk as a pioneer of chip cytometry, the availability of this scientific expertise was also an important point for the further development of our technology platform. In addition, there was excellent support from the city of Leipzig and the funding opportunities from the state of Saxony, especially for small and medium-sized companies.

Mr. Josten, what are the main cornerstones of the desired structural change in the healthcare industry, which is also to be carried out here at the location?

Josten: The structural change you mentioned is not new; after all, the transformation process in the healthcare industry has been talked about for decades. However, in the past, at best, cosmetic repairs were made. In the meantime, the challenges have become so great, also due to the corona pandemic, that it has now become clear to all stakeholders in the healthcare industry that there is only a very limited way to continue as usual. Just turning one screw is of little use. We have the hospital sector, the outpatient sector, the scientific sector and the commercial companies. Only if all these parties are involved can this challenge be accepted and this change succeed.

This is of course also a question of costs, and the statement by Dr. Stagnier made it perfectly clear how much companies from the medical sector depend on a functioning economy in other segments, for example in the logistics sector, or on well-functioning networking with research institutions from the non-university sector, such as Fraunhofer, Helmholtz or Max Planck Institutes.

Does the desired structural change also fall on fertile ground here in those parties that previously had little to do with the topic of "health"?

Neumuth: I don't think there is any region in Germany that would be better suited to this structural change. An essential component of the structural change in the healthcare industry are the topics of digitization, networking and forwarding of information in relation to all-encompassing patient care. At the same time, digitization presents itself as a very attractive field for young people. In the Leipzig region and in Central Germany there is a high level of synergy between companies in the IT sector and in healthcare. At the same time, the region is attractive to young people. In my opinion, you won't find this interaction anywhere else in Germany.

Josten: Transformation and rethinking is a »Leipzig gene«. The city has had to go through many change processes in the course of its history and have successfully completed them. It is the location of one of the oldest universities, it was a focus of industrialization, it managed the social change after reunification and has become a »boom town«. Change and transformation relate to many areas in Leipzig, far beyond healthcare and digitization, including culture, painting and literature. Leipzig lives change, and that is an ideal prerequisite for driving forward the transformation of the healthcare industry and playing a significant role in shaping it.

Ms. Köhl, what are the focal points in the healthcare industry in the Leipzig region?

Köhl: On the one hand there is medical technology, digital, operative and automated operations with the Innovation Center Computer Assisted Surgery (ICCAS) as well as cell and gene therapy, for which the Fraunhofer IZI and the University Hospital stand. What also distinguishes this region is the good cooperation between the cities of Leipzig and Dresden, the interdisciplinary approach between university hospitals and between start-ups and engineering or IT specialists. This interdisciplinary approach will decisively advance cell and gene therapy in the region.

Despite the good opportunities in the region, we also have to look at local developments in an international context. In an international comparison, the development in Germany is still much too slow and inflexible due to the existing political framework. All the important parties have now recognized this, but unfortunately specific adjustments and improvements are still pending. This means that spin-offs or settlements by large foreign pharmaceutical companies do not take place in Germany or here in the region. For example, the Fraunhofer IZI carried out a European approval study for an innovative cell therapy with Novartis. This therapy is now also used regularly at the university clinics in Leipzig and Dresden. Unfortunately, the preparations are now coming from foreign production sites because Leipzig and other German locations did not have the appropriate framework conditions for setting up a production site from the pharmaceutical partner's point of view.

What possibilities are there in the region to promote cooperation or to support the settlement and financing of start-ups?

Köhl: You have to think in terms of stronger and larger innovation hubs. In Saxony, we have succeeded in installing a cluster for cell and gene therapy with SaxoCell, with the Leipzig University Hospital and the Fraunhofer IZI in leading positions. I would also like to highlight the Center for Medicine Innovation. We have reached dimensions of cluster activities that are comparable to the level of developments in the USA, for example at the University of Pennsylvania, or in Asia. I would wish for a faster bundling of innovative forces in the region for the future.

What is the Center for Medicine Innovation?

Neumuth: The center is planned as a facility that will enable life science scientists from Germany and Europe to transfer their ideas into products and companies. We are planning the CMI as a technology-oriented research center because, in our opinion, there are already enough facilities in Germany that specialize in certain clinical pictures. We give the scientists the opportunity to put the finishing touches to their technology before it is ready for production, for example with regard to certification. Scientists don't have these opportunities at their universities, but they need them to acquire venture capital in Germany, for example. At the same time, a suitable infrastructure should also be provided for the new developments in the field of personalization or digitization of medicine.

Are there comparisons to other countries?

Stangier: Our parent company is based in the Boston area of ​​the United States. I see clear differences in the framework conditions between the USA and Germany, for example in the approval procedures in the area of ​​personalized medicine, where the USA is the leader. In the last two years there have been positive changes in Germany and Europe, and the pandemic has also led to improvements in approvals or fundraising. But these changes did not last.

For example, we could have done COVID-19 PCR testing very easily. We had the necessary equipment and staff - but we didn't get the permits. These are huge bureaucratic hurdles. Of course there have to be controls, but that's one of the reasons why it's easier for companies to go to the US or Asia for clinical trials.

Köhl: There are quite a number of clinical studies in the field of cell and gene therapy that are being carried out in Germany, simply because the level of medicine in Germany is very high. The problem is the speed. There is a rough rule of thumb: If you want to sign a contract for a clinical trial in China, it takes about three weeks, in the USA three months and in Germany three years. We need to balance maintaining our high standards while increasing the speed of obtaining the necessary approvals to provide quality results sooner.

Wolff: It was precisely for these reasons that we put out feelers to the USA in 2019, looked for a strong local partner and merged with the small US company Canopy Biosciences. In 2020 we were then bought by Bruker, who recognized the growth market of highly parametric cell analysis that we were addressing, but can also serve it far better from the USA because there are far fewer hurdles in the area of ​​regulation in the USA, for example.

But let's still state at this point: »Leipzig is booming! « Or, Herr Hofmann?

Hofmann: I can only confirm it. We have two overlapping structural change processes that we are dealing with: on the one hand, the change in the healthcare industry in general, on the other hand, the dismantling of the lignite industry in the region, which gives us the great opportunity to replace an obsolete technology as a focus industry with a promising new one and the To establish healthcare as a leading industry in the region. Due to subsidies on the one hand, but also due to political will on the other hand, we have the opportunity to establish new and much more sustainable branches of industry here. Of course, this is clearly the area of ​​life sciences, and many partners have recognized the opportunity to invest in them. The two areas that received a major boost from Corona were ICT/IT and the life sciences.

One of the most important projects is the Medical Forge, with the Leipzig University Hospital and the St. Georg Hospital as important medical partners. Companies have repeatedly approached us with requests for support, for example in questions of regulation, approval, certification or reimbursement and implementation. We built the Medical Forge around these questions and invite eight start-ups every year, some from abroad, to help them on their way. This includes technical support with laboratory technology or a modern 3D printer for medical applications, but also complete support for everything to do with MDR and ivDR. With the Medical Forge we also want to promote new settlements in the region.

The city of Leipzig has supported this idea with great commitment from the start. There is a common strategy and the common will to build something sustainable here that goes far beyond this one project - and that is an important point that distinguishes this region.

Many stakeholders from politics, business and science are involved in such processes. How do you get them to a table?

Neumuth: Such processes require a lot of communication. You have to know the interests of the individual stakeholders or work them out together in order to achieve a win-win situation that everyone ultimately supports. From my point of view, the mindset in this region is very constructive. There is a healthy mix of decision-makers who have been there for a long time, but also young people or newcomers who want to make a difference here. The climate for new ideas is very pleasant in this region.

Prof. Dr. Josten, why is an institution like the Medical Forge so important for the university hospital?

Josten: For a large facility like the university hospital, it is important that all-encompassing patient care is always flanked by maximum synergy with the facilities and institutions of the medical faculty and thus comprehensive research, be it basic, translational or implementation-oriented research. In addition, we have highly qualified employees who not only contribute their potential to the clinical care of patients, but also develop completely different ideas. A hospital has its dead ends here and the possibilities for the practical implementation of these innovations are limited. A Medical Forge therefore offers us the space to further develop ideas beyond pure patient care and possibly even to bring them into a spin-off. In this way, we can also retain well-qualified specialists and highly competent scientists in our region.

Ms. Köhl, what role does the topic "spin-off" play at the Fraunhofer IZI?

Köhl: The topic generally plays a major role at Fraunhofer. There are also special internal support programs that include addressing investors. Over the past few years, there have been a number of spin-offs here in Leipzig. We benefit greatly from the good opportunities for cooperation that we find locally, be it the university hospital or the biosaxony cluster.

How is the issue of "financing" being dealt with in the region?

Hofmann: The region has many good ideas and a high level of start-up activity, but there is actually a lack of capital, especially beyond seed financing. Attempts are then made to fill existing gaps with funding. This is not a long-term solution to the financing problem. However, efforts are being made to set up a separate VC fund for seed financing in Saxony. Until then, we will use our networks to bring companies and investors together, many of them from abroad. Ultimately, we need success stories as role models for further start-ups and investments. The takeover of the enzyme manufacturer c-LEcta by the Irish Kerry Group for EUR 137 million in February is such a success story. We invite investors to approach us - we are happy to put you in contact with interesting start-ups.

Josten: It's also a structural problem. Saxony is home to neither financially strong foundations nor a DAX company that could get involved. The strong potential investors are more likely to be in other cities; Of course, that makes it difficult to get in touch. Saxon state politics leaves no stone unturned to compensate for this shortcoming.

Köhl: Of course, the differences between Leipzig, Munich and Berlin are striking. In the international context, however, Germany is generally lagging behind.

In addition to the healthcare industry, Saxony has other strong industries, for example in the field of robotics or chip production. How does the networking of these individual industrial sectors work and how can the healthcare industry benefit from this?

Neumuth: In the future, there will be no way around cooperation between the individual industries. Modern medicine relies on technical support from the engineering or IT sector. The processing of cells, for example, requires a corresponding technical infrastructure. Here the actors must be able to find a common language and work together across existing borders.

Many engineers and technicians are already working at the medical faculty. The individual teams have to work together on joint projects on an interdisciplinary basis. This is better than setting up long-distance cooperation.

Köhl: With SaxoCell, a cross-industry cluster of AI, digitization and cell and gene therapy has already been created. At Fraunhofer, too, there is a very strong trend towards networking biomedical research with technological disciplines, e.g. production technology, materials research, microsensor technology, digitization and AI. In the course of joint projects, you learn a common language. I see this development very well in Saxony, but overall Germany is still much too fragmented. We need to push networking even harder. For example, I would like to see more interdisciplinary calls for proposals from the BMBF. We have to place even more emphasis on these interdisciplinary facets. This works excellently for the city of Leipzig, but the higher the level, the more sluggish the development.

What role does the issue of »lack of skilled workers« play in the region?

Stangier: The job market has changed a lot in recent years. IT has always been a very demanding job market. Like other companies in this market, we are now experiencing a lack of qualified young people in the laboratory area. This is not a region-specific problem, but many employees have a new definition of work-life balance in the wake of the pandemic and home office regulations. It has become difficult to recruit skilled workers for a shift system. Added to this is the already described political image of Saxony, which unfortunately should not be underestimated.

Josten: On the other hand, one must also point out Leipzig's strong educational location, with the university, several technical colleges and vocational schools. So many good junior staff are being trained in the region. This concentration is an advantage. The region is a motor for the training and further education of specialists. The challenge is to keep the trainees in the region.

Köhl: A good example is also the cooperation between the city of Leipzig, biosaxony and the Fraunhofer IZI in relation to the training of technical employees in special clean rooms for pharmaceutical production, i.e. outside of the scientific training and far beyond the classic work in the laboratory. Here we have started to recruit specialists from a larger area and to train them here on site.

Of course, the brain drain of highly qualified specialists is a risk. However, I also experience again and again that many skilled workers consciously decide to stay in the city precisely because of the high quality of life in Leipzig, for example due to the rich art and cultural offerings.

Wolff: Zellkraftwerk is a growth company. This is of course positive, but increases the need for skilled workers. We are currently striving to expand our software team and of course it is a challenge to attract good specialists. With the support of consulting firms, as an international company, we are looking worldwide. Of course, we also have to consider how new forces can be integrated into existing teams. We also operate a lot virtually, but of course on-site cooperation is crucial. Unfortunately, these challenges do not only exist in the IT area, but also, for example, in medical-technical assistance. This makes it all the more important to promote young talent in your own company at an early stage.

Hofmann: In principle, Saxony trains enough engineers. I see bottlenecks primarily in the non-academic area. Together with the Fraunhofer IZI and other partners, we have launched the QualiBioPharma project for the qualification of specialists in biotechnology. The aim is to develop and implement a pilot program for the qualification and further training of employees from outside the industry for employment in the manufacturing pharmaceutical industry and biotechnology - we have just had ourselves certified as an educational institution for this. That is unusual for a cluster organization.

How can you make the topic »spin-off« palatable to well-qualified specialists? Also to prevent potential migration from the region.

Neumuth: We have to close the existing gap between the academic world and the actual spin-off. In the past, this step was simply too big for many people from the academic world interested in founding a company. Of course there are start-up programs like EXIST - but from a financial point of view alone and also in terms of job security, these programs are simply not attractive enough for many people interested in founding a company. Many shy away from taking this leap. We have to make this transition more permeable, also in the opposite direction. This means that founders must be reassured that they can return to science if a spin-off has failed.

Of course, financing your own company is also a major challenge. It is well known that in our industry we need a high initial investment. We have to address this problem in a very special way.

Josten: Entrepreneurship thinking is not sufficiently implemented in our society. On the one hand, we are an "authority country", ie there may be too many official requirements or their processing takes too long; on the other hand, people today are looking for social and economic security more than ever. This security thinking is increasingly common among the younger generation - that's my impression. In addition, professional failure, but also the failure to achieve a professional goal in Germany is associated with a very significant personal flaw, unlike in other countries and their culture, eg in the USA.

Köhl: Founding is also a cultural debate. The safety aspect is very strong in many families. The issue of spin-offs is treated very differently in the USA. However, the employment relationships in the clinics there are not as secure as in Germany.

Hofmann: The Medical Forge was also created with this in mind. Almost all of biosaxony's activities revolve around relieving founders and growing companies of the headwind that blows against them at the start of an independent professional life or in later phases. This also includes the topic of initial financing. We are currently in talks with the Sächsische Beteiligungsgesellschaft to set up a program that provides three start-ups per year with initial financing of up to EUR 450.000 each.

Isn't the combination of different branches of industry in Saxony, such as life sciences and ICT, a good basis for successful entrepreneurship?

Josten: The enthusiasm for a spin-off has to lead to a certain continuity and must not degenerate into a mere flash in the pan. However, the right framework conditions must be set for this. Of course you can get through a year with good initial financing, but compared to the long development times in the life sciences, a year is nothing. This risk is particularly high for founders with families. Many are therefore reluctant to leave a secure employment relationship, despite good ideas and perspectives.

We cannot rely on innovations and the transfer of these being financed exclusively by the public sector. Industry and large corporations must recognize that they not only finance their own research, but also invest in venture capital in order to maintain Germany as a location in the long term. This also applies to foundations.

Stangier: There are some good ideas, but I find it sometimes difficult to correct misconceptions. Many founders make high demands too early, so both sides have to meet halfway. On the one hand, of course, you have to give the founders financial security, but on the other hand, you have to take the pressure off the industry. Here the two poles are not yet close enough to each other.

Another important aspect is that many scientists would benefit from a better understanding of business processes. Here we need more mentors and experienced people from the industry who can support founders. How do I build a business? What should I put attention on? Where can I get help?

Wolff: A good example is Dr. Christian Hennig, the founder of Zellkraftwerk. As a doctor with a very high level of IT expertise, he has incorporated his know-how into further company foundations and promoted entrepreneurship in recent years. This means that he not only participates, but also passes on his knowledge, for example in the context of co-working spaces. Such examples have to be communicated more strongly and thus create a positive effect that can have a lasting effect on start-up activities in general.

What support options are there in the region to familiarize scientists with the necessary business knowledge?

Neumuth: Of course you have to differentiate between scientists who play with a founding idea and those who want to stay in science. Of course, there are offers in the urban context or in the context of the university, where interested parties can easily find out about certain business basics. Overall, however, it is difficult to convey topics such as approval, certification or regulation via classic training. The much better way would be for people to work in a company for a certain period of time in order to experience first-hand what is behind the terms mentioned.

Hofmann: In cooperation with the city administration, biosaxony is currently working on an offer to jointly tackle questions from founders, for example about regulation, so that these topics and tasks can be outsourced to the cluster. The interest of smaller companies in particular in such services is considerable because they simply want to concentrate on their core business. We want to keep such administrative processes away from companies. Through biosaxony, we also have a large network of mentors for other topics, which we can make available to start-ups.

Why could the desired structural change fail?

Hofmann: From my point of view, a desired structural change could fail due to administrative hurdles. This is a common risk that such bottom-up projects, where ideas from science are to be implemented sustainably in the course of economic innovations, are confronted with.

The desired structural change must be really innovative. I see projects that do not represent actual structural change for me. The renovation of a town hall tower may be defined as a structural change, but this does not create any jobs. We need measurable parameters for structural change.

Neumuth: I think the issue of structural change could fail if financial resources are used to consolidate existing structures rather than establish new ones. If existing structures are co-financed, no change will take place. A structural change must diversify. What is real change? Where can you diversify?

Köhl: I don't think we can only look at structural change locally. The problem of supply chains is also inherent in medical technology or in cell and gene therapy. The structural change should therefore also restore some of our technological sovereignty.

Josten: We mustn't be jealous of our neighbors and their successes. Instead of asking ourselves why Intel is building its new chip factory in Magdeburg and not in Saxony, we should be happy that a global corporation is installing its new factory in the neighboring state. We must also be happy about the success of our neighbors and we should consider how we can possibly get involved there and what positive aspects we can draw from this for our region.

Finally, the geopolitical situation is also an important factor. Even more "impacts" like Corona or the Ukraine war would at least make necessary structural change more difficult, if not even prevent it - we can no longer afford that.

Stangier: Yes, you shouldn't think too small – but not too big either. Supply chains are a challenge. I think we need to think more European. Europe has many good ideas that could be much better exploited for the common benefit of industry. There are also bureaucratic hurdles in Europe that need to be removed.

Price is an important metric, but we need to move away from the notion that important things are always available and, most importantly, cheap. We've gotten used to it, but we have to evolve and accept that structural change and the challenges of the future come at a price. We must emphasize the need for interdisciplinarity even more and become aware of the disadvantages of internationality and globalization.

Wolff: Structural change begins with ideas and thoughts in people's heads, and begins with social change in its entirety. We must not freeze. We can't just talk, we have to act, venture out of our comfort zone and, on the one hand, maintain competition, and on the other, act in an interdisciplinary manner with completely new partners in order to salvage innovative ideas. We shouldn't limit and condemn prematurely, we should allow ideas and not slow them down. We have to combine the traditional with the new, build bridges and not allow ourselves to be slowed down by political and social crises or excessive bureaucracy. We should see structural change for what it is - an opportunity for further innovations that enrich our society and bring us forward.

Ladies and gentlemen, thank you very much for this interesting and stimulating discussion!

Holger Garbs moderated the roundtable.

Source: GoingPublic from 27.09.2022/XNUMX/XNUMX