LIFE SCIENCES IN HUNGARY OPENING DOORS FOR YOUR INVESTMENT Life Sciences in Hungary 5
Published by the Hungarian Investment LIFE SCIENCES CONTENT Promotion Agency, HIPA All rights reserved © HIPA, 2017
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6 ABOUT HUNGARY
12 LIFE SCIENCES IN HUNGARY
22 LABOUR FORCE
26 INNOVATION
HUNGARIAN INVESTMENT 32 PROMOTION AGENCY (HIPA) Life Sciences in Hungary 7
ABOUT HUNGARY MAIN FIGURES
CURRENCY INFLATION FORM OF GDP (PPS) GOVERMENT FORINT € 194,248 0.4% PARLIAMENTARY (HUF) MILLION (2016, HCSO*) REPUBLIC (2015, HCSO)
AREA TIME ZONE 93,022 km2 GMT + 1 HOUR UNEMPLOYMENT RATE 5.1 % (2016, HCSO) HUNGARY
OTHER MAJOR CITIES POPULATION CAPITAL BUDAPEST Debrecen (203,059) Szeged (162,621) 9,830,485 1,759,407 (2016, HCSO) (as of January 2016) Miskolc (158,101) Pécs (145,347) Győr (129,568)
70% 62% CLIMATE RISK OF NATURAL TEMPERATE DISASTERS 51% (similar to the rest of VERY LOW the con inental zone) 40% 39% 30%
Inward FDI stock in 2015 MEMBERSHIP IN INTERNATIONAL (percentage of GDP) ORGANISATIONS EU, UN, OECD, WTO, NATO, IMF, EC EU member: since 2004 HUNGARY CZECH SLOVAKIA ROMANIA POLAND SLOVENIA Source: wiiw FDI (Source: *HCSO REPUBLIC Database, 2016 = Hungarian Central Sta is ical O ice) BUSINESS ENVIRONMENT HUNGARY ABOUT INVESTMENTS IN FOCUS new anew introduced ...has intensive investments. incen ive scheme incen ive suppor ing tech- BUSINESS CLIMATE BUSINESS THE HUNGARIAN GOVERNMENT... IMPROVE THE IN ORDER TO
further reduce taxes ...is commi ted to to commi ted ...is on employment. educa ion system ...further improved the prac ice-based on industry needs. industry on dual built built Hungary the innova ion system related to R&D toR&D related system taxa ion and incen ive ac ivi ies ...has ...has hub of CEE. hub compe i ive CIT in the the in CIT compe i ive …has created…has the most modi ied its modi ied EU based on Industry 4.0 Industry on based with 9 % lat rate. 9% lat with ...has introduced...has its development plan unique economic to make requirements.
Life Sciences in Hungary in Sciences Life Na ion Development implement aDigitalimplement Program ...was the irst to ...was irst the 70 strategic partnership companies fast access to fast companies more than than more signed ...has region. agreements the Government. the in the CEE CEE the in 9 giving giving Life Sciences in Hungary 11
EXPLORE THE COUNTRYSIDE ABOUT HUNGARY Hungary’s diverse countryside o fers a wide QUALITY OF LIFE BUDAPEST range of outdoor ac ivi ies: 11,000 kilometres IS THE of hiking routes; more than 2,500 kilometres of 2. cycle paths; 22 golf courses; ten na ional parks; BEST CITY and many protected nature reserves for those ON EARTH in love with fresh air. The protected Puszta- (Condé Nast Traveler, region, the Great Plain, the roman ic Danube 2015) Bend with its historic sites, and pre ty baroque towns, such as Eger, a tract visitors all over the year. Lake Balaton, the largest fresh water lake in Central Europe, is a perfect holiday resort.
ARIA HOTEL BUDAPEST #1 HOTEL IN THE WORLD BY TRIPADVISOR 2017 Travelers' Choice Award
EXPATS LIKE HUNGARY Budapest is a city full of surprises and wonders, with its lively centre, pre ty parks, majes ic river, tall church spires, and lavish spas. One of the most exci ing ci ies in the world, Budapest is full of secrets, hidden spots to explore, and old favourites to revisit. This is the city where being bored is not an op ion. INTERNATIONAL SCHOOLS According to TripAdvisor, Budapest is o fer- Expatriates looking to s ick with the curricula ing the best price-value ra io in the world. of their home countries can choose from According to Condé Nast Traveler readers, a range of private interna ional schools for their Budapest is the second best city on earth. children. There are also many English, German or French public and private pre-schools for children aged from three to six. The school year starts in September and ends in June, and school buses are usually available at private schools. There are many opportuni ies to study in a foreign language at universi ies too. Life Sciences in Hungary 13
LIFE SCIENCES IN HUNGARY TOP 5 CITIES IN LIFE SCIENCES: 1. Budapest, Hungary STRONG POSITION 2. Skopje, Macedonia 3. Istanbul, Turkey 4. Moscow, Russia 5/a Athens, Greece 5/b Warsaw, Poland NR. 1 IN LIFE SCIENCES The Conway group – a company providing TATABÁNYA comprehensive corporate investment con- AMONG THE suling – has released a publicaion itled TOP 10 “The World’s Most Compeiive Ciies EUROPEAN CITIES 2015”. It evaluated the most compeiive big FOR LIFE SCIENCES ciies in terms of investment having a popu- (according to fDi Magazine) laion above 500,000 people. 4
5b
1 Budapest is displayed as one of the most dynamic hotspots of Central Europe, Budapest1 supported by the diversity of the city. 2 3
Budapest was the most atracive city of the Eastern European and Central Asian 5a region in the ield of the automoive industry, mechanical engineering, life sciences, metallurgy, power engineering, transportaion and logisics. In addiion, it shared irst place in the ield of infor- maion technology and communicaions and achieved second place in the ield of business and inancial services. Life Sciences in Hungary 15
Throughout the 20th century, Hungary was the most important LIFE SCIENCES IN HUNGARY supplier of medicine for Eastern Europe and remained at the BUILDING ON RICH TRADITIONS forefront of the region’s pharmaceutical industry.
In the 1990s, international pharmas recognized its expert knowledge and potential and established export-oriented, high added value production in the country.
A STRONG Building on its rich traditions, today the Hungarian phar- maceutical industry contributes to the health of people PHARMACEUTICAL in almost 80 countries around the world. INDUSTRY WITH A CENTURY OLD TRADITION
Hungary’s modern pharmaceutical industry was estab- lished in 1901 by Gedeon Richter who began industrial- scale manufacturing in his Budapest pharmacy labora- tory. During the 1910s and 1920s, the foundations were laid down for one of Hungary’s most successful and glob- ally-renowned industrial sectors.
Erik Bogsch Managing Director, Gedeon Richter Plc.
"More than a century of experience in pharmaceu ical manufacturing, globally acknowledged exper ise Ground-breaking contributions to life and con inuous innova ion, these are the values that sciences were made, such as the fi rst syn- characterize the Hungarian pharmaceu ical industry. thesis and mass production of Vitamin C, For Gedeon Richter, an independent pharmaceu ical led by Nobel laureate Hungarian scien- mul ina ional based in Hungary, the solid opera ing tist, Albert Szent-Györgyi. of its research and development ac ivity is a priority. The favorable economic environment make it possible for us to maintain a high engagement of Hungarian brainpower, a key to our successful interna ional presence." Life Sciences in Hungary 17
LIFE SCIENCES IN HUNGARY REFERENCES TEVA GLAXOSMITHKLINE Global generics leader Teva Pharma- In 2002, UK-based mulinaional GSK ceuicals acquired the Hungarian phar- acquired a vaccine producion facility near maceuical company Biogal in 1995. Budapest making a strategic investment Today the plant in Debrecen (Eastern of over EUR 130 million. The plant produ- Hungary) is the company’s main centre ces anigens for paediatric combinaion of manufacturing for the region and vaccines. The facility employs 230 markets outside Europe. The company people. supplies products to 44 countries. Teva Group’s European generics R&D centre was inaugurated in 2009 in Debrecen. In Hungary, Teva operates three producion sites and a packaging plant, employing 3,000 people. GEDEON RICHTER The naion’s irst large-scale phar- maceuical producer, Richter was established in 1901 and remains the naional lagship manufacturer. The THOSE largest independent drug maker in SANOFI WHO HAVE CEE, the company operates a highly In 1991, France’s Sanoi acquired CHOSEN HUNGARY regarded R&D centre, employing ca. ownership of the tradiional Hungarian 1,000 people. Richter runs joint research pharmaceuical manufacturer, Chinoin. The programs with more than 30 leading French parent has three manufacturing university faculies and academic sites in Hungary and also a regional EGIS £SERVIER¤ research insitutes. The company is distribuion centre, from which products Established in 1912, Egis is one of the also acive in original research, which are shipped to 45 countries. Sanoi’s most prominent companies in the is mainly focused on diseases of the Hungarian acivity also includes drug history of Hungarian pharmaceuical central nervous system. development. The company’s headcount manufacturing. Now owned by in Hungary is around 2,000. France’s Servier, Egis is acive in the pharmaceuical value chain from manufacturing through R&D to markeing. The company coninues to Pierre Faury build on the skills, talents and creaivity General Manager, Sanoi Hungary of Hungarian scienists while focusing its R&D on cardiovascular diseases "With regards to innovaion in the pharma sector and disorders of the central nervous Hungary is an atracive place and is among the system. Servier employs a staf of top 10 countries in Europe in terms of the number 2,900 in Hungary. of conducted clinical trials, bringing 300 million Euros of investment to the country every year." Life Sciences in Hungary 19
Claire Roger LIFE SCIENCES IN HUNGARY General Manager, GlaxoSmithKline Ltd. SUCCESS STORIES "Highly educated professionals, an advantageous geographic seing and a supporive environment for investment have been the key drivers to make this development in Hungary." RECENT
SUCCESS March, 2017 – On 13 March 2017 global pharma STORIES AND company GlaxoSmithKline announced a development project of its Hungarian producion site in Gödöllő in a value of EUR 57 DEVELOPMENTS March, 2016 – million, creaing 104 addiional jobs. As a result of On 10 March 2016, leading the investment project the Hungarian plant of GSK Hungarian pharma producer will manufacture Diphtheria and Tetanus Toxoids Gedeon Richter announced to expand for broader scale of applicaion while the overall its capaciies dedicated to biosimilar capacity of the plant is going to be increased as development and manufacturing in the well. In 2016 GSK also celebrated an important town of Debrecen via a capital expenditure milestone in Hungary as on 30 May the program worth EUR 48 million. These faciliies company inaugurated a new producion were iniially inaugurated in 2012. The planned unit of the Gödöllő site in a value of investment creates 125 new jobs and involves EUR 10 million. November, 2015 – a near doubling of the biotechnological US-based BD Biosciences, a manufacturing capaciies while world leading provider of diagnosic simultaneously establishing an and research tools for life scienists analyical facility to evaluate the celebrated the foundaion of its new facility substances produced. May, 2016 – Xellia in Tatabánya, Northwest Hungary. Building Pharmaceuicals of Denmark on posiive experiences in the producion of announced on 24 May 2016 to preillable syringes, Becton Dickinson (BD) decided expand its manufacturing site in to also locate the manufacturing of research Budapest. The new facility will be reagents to its Hungarian site. The new facility is located next to the API manufacturing expected to produce 8,000 diferent types of unit and will host centralized laboratory reagents for the pharmaceuical industry services. Xellia employs currently a by 2018. The investment project of staf of 200 in Hungary, while the EUR 20 million will create 107 EUR 9 million project creates addiional jobs. addiional 80 jobs. Life Sciences in Hungary 21
LIFE SCIENCES IN HUNGARY VETERINARY SCIENCES Thierry Le Flohic General Manager, Ceva-Phylaxia
"In celebraing 100 years since the creaion of the Phylaxia Serum Producing Company, we are very proud of our historical link with this company and its scieniic tradiion. Over the years, we have shown our commitment to build on our roots and bring to life BUILDING major innovaions, by invesing heavily and regularly in CevaPhylaxia. …From 1991 to today, the company has increased its producion over a thousandfold, and ON HISTORY® launched numerous vaccines including the best sellers CevacTransmune IBD, Cevac IBD L, Coglavax, Cogla- VETERINARY pest, Coglapix and Coxevac just to name a few." SCIENCES
1900s 1912 1920s 1948 1970s1905 1999 TODAY
Veterinary sciences In 1912, the Phylaxia From the 1920s, In 1948, all In the 1970s, the In 1999, the Scienists at Ceva-Phylaxia also have deep roots Serum Producing new vaccines were Hungarian company became company became coninue to build on the in Hungary, with Company was produced, targeing biological a naional and a subsidiary of knowledge-base of their the beginnings of established to anthrax, swine producion internaional centre Ceva. predecessors. The company’s veterinary serum develop and erysipelas and laboratories were of innovaion for largest biological R&D centre is producion daing produce the poultry cholera. reorganized into a veterinary sciences in Budapest with a staf of 130. back to the early classical swine single company. with more than 2,000 In July 2014, Ceva-Phylaxia 1900s. fever serum. employees and 200 celebrated the 50 billionth diferent products poultry vaccine manufactured manufactured. in Hungary. Life Sciences in Hungary 23
LABOUR FORCE GLOBALLYRELY PRODUCTIVITY ACKNOWLEDGED HUMAN CAPITAL AT A REASONABLE COST
The Hungarian labour force is well qualiied and cost efecive, which increases the country’s internaional compeiiveness. The large AVERAGE GROSS WAGES number of high quality research insituions are IN 2015 (EUR) a testament to Hungary’s tradiional strengths in science and technology. From 2017 the statutory gross minimum wage in Hungary is HUF 127,500 (cca. EUR 409) per month. The average earnings was around HUF 263,200 (cca. EUR 845) per month in 2016. 1511 1467 1365 967 1114 Health service Chemical Chemist Biologist, botanist, General manager engineer zoologist and practitioner related professional
Dr. István Hodász CEO, Egis
"Hungary has the most developed 1184 801 479 644 932 1073 pharmaceuical industry in the CEE Pharmacist, Chemical Dental Other human Basic chemicals Pharmaceutical region 50% of all industrial R&D specialized engineering technician health care and chemical products investments realised in the country pharmacist technician related products machine derives from this highly innovaion professional machine operator driven sector. Government incenives operator contribute to our operaions, as well as the central geographic locaion of Hungary. The globally acknowledged (Source: National Employment Service) local experise, state of the art tech- nologies and favourable infrastruc- ture provide a solid background for our research and for the producion of medicaion of the highest quality." Life Sciences in Hungary 25
LABOUR FORCE EDUCATION
BIOTECH-RELATED RESEARCH AND EDUCATIONAL INSTITUTES MORE THAN MAIN CENTERS: Nr.1. in the region in terms of wage adjusted labor BUDAPEST, produc ivity in pharma and 21,000 PÉCS, SZEGED, medtech manufacturing. (Eurostat, 2014) LIFE SCIENCES DEBRECEN STUDENTS IN TERTIARY EDUCATION
IN 2015/2016 Pharma and medtech employ altogether around 35,000 persons. (HCSO, 2016)
Budapest Debrecen
Average monthly gross wage in pharma sector: EUR 1,449. (HCSO, 2016)
Szeged Pécs Life Sciences in Hungary 27 2004 INNOVATION ADAM HERSHKO HUNGARIAN R&D CHEMISTRY NOBEL LAUREATES R&D POTENTIAL The discovery of ubiquiin- IN HUNGARIAN mediated protein degradaion LIFE SCIENCES 1994 GEORGE ANDREW OLAH The scieniic creaivity of Hungarians 1986 CHEMISTRY is internaionally recognized, which is JOHN CHARLES POLANYI Contribuions to carbocaion apparent from the large number of CHEMISTRY chemistry Nobel laureates of Hungarian origin. Contribuions to This talent is paricularly noiceable carbocaion chemistry in the ields of natural, technical and medical sciences. Although biotech- 1971 nology is a relaively young science, 1963 DENNIS GABOR its related industries and research EUGENE WIGNER PHYSICS ields have longstanding tradiions in PHYSICS The invenion and Hungary, giving companies access to Contribuions to the theory development of holography a deep knowledge-base. of the atomic nucleus and the elementary paricles 1961 GEORG VON BÉKÉSY MEDICINE 1943 The physical mechanism GEORGE DE HEVESY of simulaion within CHEMISTRY the cochlea The use of radioacive tracers in the study of biochemical processes 1925 ALBERT SZENTGYÖRGYI MEDICINE 1925 Study on Vitamin C RICHARD ADOLF and cell respiraion ZSIGMONDY CHEMISTRY Demonstraion of the 1914 heterogeneous nature of ROBERT BÁRÁNY colloidal soluions MEDICINE Physiology and pathology of the vesibular apparatus 1905 FÜLÖP VON LÉNÁRD PHYSICS Cathode ray Life Sciences in Hungary 29 LIFE SCIENCES R&D IS CONCENTRATED INNOVATION AROUND FOUR MAJOR UNIVERSITY CAPABILITIES CITIES IN HUNGARY
BUDAPEST DEBRECEN Semmelweis University: University of Debrecen: Semmelweis is widely recognized as one of The University of Debrecen is a leading and Europe’s leading universi ies in medical and prominent ins itu ion of higher educa ion in health sciences. The Faculty of Health Sciences Hungary. Medical training at the Faculty of has 14 departments at present with about Medicine has the most remarkable tradi ions, BUDAPEST DEBRECEN 200 highly-quali ied lecturers and part- ime going back almost one hundred years. Today instructors, and more than 3,100 students. 3,400 students study at the Faculty. In the 43 independent units of the Faculty interna ion- Ins itute of Experimental Medicine of the ally acknowledged academic research is con- Hungarian Academy of Sciences ducted in a wide spectrum of life sciences. The ive departments of the Ins itute cover SZEGED most of the levels of analysis of brain func ion, from molecular and cellular to systems and PÉCS behavioral. SZEGED University of Szeged: The University of Szeged is one of the most popular universi ies of Hungary, occupying high places in all the interna ional rankings. The number of its academic research and teaching sta f reaches 2,300 training up to THE PHARMACEUTICAL INDUSTRY PÉCS 25,000 students. It has been considered for PROVIDED FOR University of Pécs: years as one of the world’s best 500 universi- With 18,000 students and more than 1,600 ies. The 2,500 instructors and researchers at academics, the University of Pécs is one of the University of Szeged are ac ively involved the largest higher educa ional ins itu ions in in na ional and interna ional research pro- 38.7% Hungary o fering high-quality research and jects. The University has 19 doctoral schools educa ion. and a numerous interna ionally renowned re- OF THE MANUFACTURING INDUSTRY’S search teams. R&D EXPENDITURES IN 2015. János Szentágothai Research Centre: The Research Centre covers all aspects of Hungarian Biotechnology Associa ion: (source: HCSO) educa ion, research and innova ion at the The o icial seat of the Hungarian ields of biomedical, natural and environmental Biotechnology Associa ion, which was sciences, such as neurobiology, biotechnology, established by Hungary’s leading life sciences lab-on-a chip technology, high- ield terahertz, companies, is also located in the City of spectroscopy and various other ields in medical Szeged. sciences. Life Sciences in Hungary 31
INNOVATION Highly CLINICAL RESEARCH moivated Higher and loyal incidence invesigators Fast and of certain reliable paient disorders than recruitment in Western Europe Local study monitors and EU- ATTRACTIVE CROs are compliant more highly legislaion LOCATION FOR CLINICAL skilled than the internaional RESEARCH average BENEFITS Wide High density of availability well-equipped OF CLINICAL of untreated HUNGARY HAS A Phase I study paient WORLDWIDE REPUTATION centres TRIALS populaions FOR INTERNATIONAL Similarly to the health care system, IN HUNGARY CLINICAL TRIALS, WITH the naional health insurance scheme is also centralized in Hungary. Being MORE THAN the sole health insurance provider Centralized in the country, the databases of the health care Paients trust systems physicians 300 Naional Health Insurance Fund concentrate and Western ofer a unique means of access to large numbers medicine SUCH TRIALS paient data. Such concentraion of of paients REGISTERED EVERY YEAR. informaion makes Hungary an even more favourable choice for companies THIS IS AN OUTSTANDING Excellent engaged in clinical research. English Outstanding NUMBER CONSIDERING Modern data quality language hospital and HUNGARY’S POPULATION skills diagnosics equipment OF 10 MILLION. to support complex trials
Vlad Bogin, MD, FACP, CEO of Cromos(tm) Pharma
"With a populaion of 10 million people, the highest standard of medical care and great invesiga- tor and paient engagement, Hungary exempli- ies an excellent seing for global clinical research." Life Sciences in Hungary 33
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HIPA Regional grants are the most typical forms of incen ives for green ield / brown ield investments INCENTIVES OVERVIEW or reinvestments. The maximum amount of regional incen ive is shown in the regional aid intensity map. The map below illustrates that, depending on the GOVERNMENT INCENTIVES region, regional aid available for investment by a large enterprise may be up to 50% of the eligible s a member of the European Union, Hungary’s costs of the investment. For investments not regula ions on incen ive opportuni ies are exceeding €50 million, the maximum intensity ra io Ain compliance with EU regula ions. One can be increased by 10% for medium-sized and by of Hungary’s compe i ive advantages over other 20% for small enterprises. countries in the region is the government’s strong In case of R&D ac ivi ies, the maximum aid intensity commitment to increasing the compe i iveness of is 25% all over the country. SMEs and large enterprises in Hungary. Alongside the regulatory tools that contribute CENTRAL HUNGARY to the compe i ive business environment of Budapest local companies, Hungary o fers a wide range of incen ives to facilitate foreign direct investments 0 / 20 / 35% and reinvestments by local enterprises. Subsidies Miskolc may be granted as regional aid or speci ic aid, such NORTHERN % HUNGARY as R&D subsidies. 25 35 % Győr Debrecen
CENTRAL NORTHERN TRANSDANUBIA GREAT PLAIN Székesfehérvár 50 % THESE INCENTIVES INCLUDE, BUT ARE NOT LIMITED TO WESTERN TRANS- SOUTHERN DANUBIA GREAT PLAIN SOUTHERN Szeged TRANSDANUBIA
Pécs
CASH SUBSIDIES TAX INCENTIVES LOW-INTEREST TRAINING for investments, reduc ion of LOANS SUBSIDIES training, corporate tax, job crea ion social tax, or for and R&D encouraging R&D The maximum aid intensity available decreases if ac ivi ies... the investment is a large investment (exceeding €50 million): 50% of the maximum aid intensity shown in the regional aid map is available for investments between €50 and €100 million, with NEW INCENTIVE MEASURES HAVE BEEN INTRODUCED TO SUPPORT 34% of the maximum aid intensity for investments THE R&D ACTIVITIES OF LARGE ENTERPRISES THROUGHOUT over €100 million. For informa ion on up-to-date and individual HUNGARY, INCLUDING BUDAPEST. incen ive packages, please contact HIPA directly.