LIFE SCIENCES in HUNGARY OPENING DOORS for YOUR INVESTMENT Life Sciences in Hungary 5

LIFE SCIENCES IN HUNGARY OPENING DOORS FOR YOUR INVESTMENT Life Sciences in Hungary 5

www.hipa.hu

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 (PPP) GOVERMENT FORINT € 183,989 -0.1% PARLIAMENTARY (HUF) MILLION (2015, HCSO*) REPUBLIC (2014)

AREA TIME ZONE 93,030 km2 GMT + 1 HOUR UNEMPLOYMENT RATE 6.8 % (2015, HCSO) HUNGARY

OTHER MAJOR CITIES POPULATION CAPITAL BUDAPEST Debrecen (203,506) Szeged (162,593) 9,855,571 1,757,618 (as of January 2015) (as of January 2015) Miskolc (159,554) Pécs (145,985) Győr (129,372)

78% CLIMATE RISK OF NATURAL 65% TEMPERATE DISASTERS 57% (similar to the rest of VERY LOW the continental zone) 41% 40% 27%

Inward FDI stock in 2014 MEMBERSHIP IN INTERNATIONAL (percentage of GDP) ORGANISATIONS EU, UN, OECD, WTO, NATO, IMF, EC EU member: since 2004 HUNGARY CZECH SLOVAKIA POLAND ROMANIA SLOVENIA Source: wiiw FDI (Source: *HCSO REPUBLIC Database, 2016 = Hungarian Central Statistical Office) BUSINESS ENVIRONMENT HUNGARY ABOUT INVESTMENTS IN FOCUS financial support for R&D ACTIVITIES R&D ACTIVITIES in the 2016-2020 the in BUSINESS CLIMATE, BUSINESS the amount of amount the …has doubled TO IMPROVE THE THE HUNGARIAN period. GOVERNMENT… IN ORDER IN …has reduced the INCOME TAX PERSONAL to

15%

CORPORATE TAX RATE RATE TAX CORPORATE to the lowest level level lowest to the in the CEE region. the in …has reduced the the most competitive competitive most the FLEXIBLE LABOUR FOCUSED CODE …created one of of …created one a (in favour of employers). FOREIGN-TRADE …has introduced …has to attract FDI. to attract s in Europe s in foreign policy Life Sciences in Hungary in Sciences Life …introduced a new act act anew …introduced in favour of business favour of business in on a practice based based apractice on government via workshops and and workshops via government DUAL TRAINING DUAL TRAINING STRATEGIC PARTNERSHIP with numerous companies, companies, numerous with giving fast access to the access to fast the giving regular consultations. regular needs. …has entered into entered …has AGREEMENTS 9 Life Sciences in Hungary 11

ABOUT HUNGARY EXPATS LIKE HUNGARY EXPLORE THE COUNTRYSIDE Budapest is a city full of surprises and wonder, Hungary’s diverse countryside offers a wide QUALITY OF LIFE with its lively centre, pretty parks, majestic range of outdoor activities: 11,000 kilometres river, tall church spires, and lavish spas. One of of hiking routes; more than 2,500 kilometres the most exciting cities in the world, Budapest of bicycle paths; 17 golf courses; ten national is full of secrets, hidden spots to explore and parks; and an abundance of protected nature old favourites to revisit. This is the city where reserves for the lovers of fresh air. The being bored is not an option. protected Puszta-region, the Great Plains, According to Trip Advisor, Budapest is offering the romantic Danube Bend with its historic the best price-value ratio in the world. Accord- sites, and pretty baroque towns such as Eger ing to Condé Nast Traveler readers, Budapest attract visitors all over the year. Lake Balaton, is the second best city on Earth. the largest fresh water lake in Central Europe, is a perfect holiday resort.

BUDAPEST IS THE 2. BEST CITY ON EARTH (Condé Nast Traveler, 2015)

THERMAL WATER Hungary is blessed with an abundance of thermal water, and its bathing culture is supported by excellent facilities. The world’s largest INTERNATIONAL SCHOOLS thermal lake suitable for bathing is in the Western Expatriates looking to stick with the curricula of Hungarian town of Hévíz; the water temperature their home countries can choose from a range of never drops below a tepid 79°F/26°C, so a dip is private international schools for their children. possible at any time of year! There are also many English, German and French public and private pre-schools for children aged 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 opportunities to study in foreign languages at universities as well. 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 comprehensive corporate investment con- sulting – has released a publication titled “The World’s Most Competitive Cities 2015”. It evaluated the most competitive big cities in terms of investment having a population above 500,000 people. 4

Budapest is displayed 1 as one of the most dynamic hotspots of Central Europe, supported by the diversity of the city. Budapest1

2 3

Budapest was the most attractive city of the Eastern European and Central Asian 5a region in the field of the automotive industry, mechanical engineering, life sciences, metallurgy, power engineering, transportation and logistics. In addition, it shared first place in the field of information technology and communications and achieved second place in the field of business and financial 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 pharmaceutical 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 established 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 globally-renowned industrial sectors.

"More than a century of experience in pharmaceutical manufacturing, globally acknowledged expertise and continuous innovation, these are the values that characterize the Hungarian pharmaceutical industry. For Gedeon Richter, an independent Ground-breaking contributions to life pharmaceutical multinational based in Hungary, sciences were made, such as the first syn- the solid operating of its research and development thesis and mass production of Vitamin C, activity is a priority. The favorable economic led by Nobel laureate Hungarian scien- environment make it possible for us to maintain tist, Albert Szent-Györgyi. a high engagement of Hungarian brainpower, a key to our successful international presence." Erik Bogsch, Managing Director, Gedeon Richter Plc. Life Sciences in Hungary 17

LIFE SCIENCES IN HUNGARY REFERENCES TEVA GLAXOSMITHKLINE Global generics leader Teva Pharma- In 2002, UK-based multinational GSK ceuticals acquired the Hungarian phar- acquired a vaccine production facility near maceutical 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 antigens for paediatric combination of manufacturing for the region and vaccines. The facility employs 220 markets outside Europe. The company people. supplies products to 44 countries. Teva Group’s European generics R&D centre HEALTHY was inaugurated in 2009 in Debrecen. In Hungary, Teva operates three production sites and a packaging plant, employing BIOTECH 3,000 people. GEDEON RICHTER SECTOR The nation’s first large-scale pharmaceutical producer, Richter was ungary’s pharmaceutical traditions established in 1901 and remains the and internationally acknowledged national flagship manufacturer. The THOSE largest independent drug maker in Hachievements in chemistry and SANOFI biology serve as the basis of its healthy WHO HAVE CEE, the company operates a highly In 1991, France’s Sanofi acquired biotechnology sector. regarded R&D centre, employing 950 ownership of the traditional Hungarian CHOSEN HUNGARY people. Richter runs joint research Today, the country has over 85 core pharmaceutical manufacturer, Chinoin. The programs with more than 30 leading biotechnology companies French parent has three manufacturing of various sizes focused on biotech R&D university faculties and academic sites in Hungary and also a regional and manufacturing. The majority were EGIS (SERVIER) research institutes. The company is distribution centre, from which products established in 2005-2007, and market their Established in 1912, Egis is one of the also active in original research, which are shipped to 45 countries. Sanofi’s products and services worldwide. Hungary most prominent companies in the is mainly focused on diseases of the Hungarian activity also includes drug has a proven track record in R&D and is a net history of Hungarian pharmaceutical central nervous system. development. The company’s headcount contributor to the global biotech industry. manufacturing. Now owned by in Hungary is around 2,100. France’s Servier, Egis is active in the pharmaceutical value chain from manufacturing through R&D to marketing. The company continues to "With regards to innovation in the pharma sector build on the skills, talents and creativity Hungary is an attractive place and is among the of Hungarian scientists while focusing top 10 countries in Europe in terms of the number its R&D on cardiovascular diseases of conducted clinical trials, bringing 300 million and disorders of the central nervous Euros of investment to the country every year." system. Servier employs a staff of Pierre Faury, General Manager, Sanofi Hungary 3,000 in Hungary. Life Sciences in Hungary 19

"Highly educated professionals, an advantageous LIFE SCIENCES IN HUNGARY geographic setting and a supportive environment for SUCCESS STORIES investment have been the key drivers to make this development in Hungary." Claire Roger, General Manager, GlaxoSmithKline Ltd.

RECENT January, 2016 – GlaxoSmithKline has a cutting edge vaccine manufacturing SUCCESS site in Gödöllő. The site was acquired by GSK which then invested heavily to upgrade the STORIES AND facilities and technologies to bring new facilities November, 2014 – online in 2008. This site has a key role producing French animal purified Diphtheria and Tetanus antigens which are DEVELOPMENTS healthcare company Ceva used in vaccines containing DT all over the world. An announced it would increase its ongoing technology transfer project on the site has Hungarian production capacity by now entered the implementation phase: as a result of 40%. The company declared that this project, additional phases of the manufacturing July, 2013 – further expansion of its poultry process of tetanus and diphtheria vaccines will Hungarian drug maker vaccine manufacturing be located in the Hungarian facility. GMP Egis, owned by France’s facility in Budapest was operations are expected to October, 2012 – Servier, announced an EUR 16 expected in the commence in the first Global generics leader million investment to strengthen years to come. half of 2016. Teva Pharmaceuticals opened its research and development a new EUR 65 million sterile plant capacity. The expansion will near Budapest, creating 260 new create new R&D jobs jobs. The facility is one of the biggest of at the company’s its type in Europe and will operate Budapest site. November, 2015 – with an annual production capacity US-based BD Biosciences, a of 160-200 million units. world leading provider of diagnostic The new plant will supply and research tools for life scientists patients in more than celebrated the foundation of its new facility 70 countries. in Tatabánya, Northwest Hungary. Building on positive experiences in the production of prefillable syringes, Becton Dickinson (BD) decided to also locate the manufacturing of research reagents to its Hungarian site. The new facility is expected to produce 8,000 different types of reagents for the pharmaceutical industry by 2018. The investment project of EUR 20 million will create 107 additional jobs. Life Sciences in Hungary 21

LIFE SCIENCES IN HUNGARY VETERINARY SCIENCES "In celebrating 100 years since the creation of the Phylaxia Serum Producing Company, we are very proud of our historical link with this company and its scientific tradition. Over the years, we have shown our commitment to build on our roots and bring to life major innovations, by investing heavily and regularly in CevaPhylaxia. …From 1991 to today, the company has increased its production over a thousandfold, and BUILDING launched numerous vaccines including the best sellers CevacTransmune IBD, Cevac IBD L, Coglavax, Cogla- pest, Coglapix and Coxevac just to name a few." ON HISTORY- Thierry Le Flohic, General Manager, Ceva-Phylaxia VETERINARY 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 Scientists at Ceva-Phylaxia also have deep roots Serum Producing new vaccines were Hungarian company became company became continue to build on the in Hungary, with Company was produced, targeting biological a national and a subsidiary of knowledge-base of their the beginnings of established to anthrax, swine production international centre Ceva. predecessors. The company’s veterinary serum develop and erysipelas and laboratories were of innovation for largest biological R&D centre is production dating produce the poultry cholera. reorganized into a veterinary sciences in Budapest with a staff of 120. 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 different 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 qualified and cost effective, which increases the country’s international competitiveness. The large AVERAGE GROSS WAGES number of high quality research institutions are IN 2014 (EUR) a testament to Hungary’s traditional strengths in science and technology. The 2016 statutory gross minimum wage in Hungary is HUF 111,000 (cca. EUR 3,452 per month). The average earnings was around HUF 247,784 (cca. EUR 800) in 2015. 1561 1340 1399 961 1112 Health service Chemical Chemist Biologist, botanist, General manager engineer zoologist and practitioner related professional

1182 786 473 765 918 1044 Pharmacist, Chemical Dental Other human Basic chemicals Pharmaceutical specialized engineering technician health care and chemical products pharmacist technician related products machine professional machine operator operator

(Source: National Employment Service, 2014) Life Sciences in Hungary 25

LABOUR FORCE EDUCATION 250 BIOTECH-RELATED RESEARCH AND MORE THAN EDUCATIONAL INSTITUTES 19,000 MAIN CENTERS: BUDAPEST, LIFE SCIENCES PÉCS, SZEGED, STUDENTS IN TERTIARY DEBRECEN EDUCATION IN 2013/2014

"Hungary has the most developed pharmaceutical industry in the CEE region; 50% of all industrial R&D investments realised in the country derives from this highly innovation driven sector. Gov- Debrecen ernment incentives contribute to our operations, as well as the central geo- Budapest graphic location of Hungary. The globally acknowledged local expertise, state of the art technologies and favourable infra- structure provide a solid background Szeged for our research and for the production Pécs of medication of the highest quality." Dr. István Hodász, CEO, Egis Life Sciences in Hungary 27 2004 INNOVATION ADAM HERSHKO HUNGARIAN R&D CHEMISTRY NOBEL LAUREATES R&D POTENTIAL The discovery of ubiquitin- IN HUNGARIAN mediated protein degradation LIFE SCIENCES 1994 GEORGE ANDREW OLAH The scientific creativity of 1986 CHEMISTRY Hungarians is internationally JOHN CHARLES POLANYI Contributions to carbocation recognized, which is apparent from CHEMISTRY chemistry the large number of Nobel laureates Contributions to of Hungarian origin. This talent is carbocation chemistry particularly noticeable in the fields of natural, technical and medical 1971 sciences. Although biotechnology is 1963 DENNIS GABOR a relatively young science, its related EUGENE WIGNER PHYSICS industries and research fields have PHYSICS The invention and longstanding traditions in Hungary, Contributions to the theory development of holography giving companies access to a deep of the atomic nucleus and the knowledge-base. elementary particles 1961 GEORG VON BÉKÉSY MEDICINE 1943 The physical mechanism GEORGE DE HEVESY of stimulation within CHEMISTRY the cochlea The use of radioactive tracers in the study of biochemical processes 1925 ALBERT SZENT-GYÖRGYI MEDICINE 1925 Study on Vitamin C RICHARD ADOLF and cell respiration ZSIGMONDY CHEMISTRY Demonstration of the 1914 heterogeneous nature of ROBERT BÁRÁNY colloidal solutions MEDICINE Physiology and pathology of the vestibular 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 DEBRECEN University of Debrecen: BUDAPEST The newly established Life Science Centre for Semmelweis University: molecular medicine, biology and agricultural Widely recognized as one of Europe’s sciences. leading centres of medical and health sciences. Genomnanotech Regional Knowledge Centre: János Szentágothay Centre of Excellence: Targets cutting-edge technologies developed at Carries out immuno-genomic research, modi- the Debrecen University and its region, including fied tissue proliferation, common molecular genomics, nano- and biotechnologies. targets in endemics, info-bionomics in medi- Pharmapolis Innovative Pharmaceutical cine and neuroscientific research. Cluster: Cell Communication Knowledge Centre: A recently established regional biotechnology Involved in the development of new technolo- cluster. gies based on research of diseases caused by Research Centre of Molecular Medicine: impaired cell communication. Recognized as a “Centre of Excellence” by the Institute of Experimental Medicine of the European Union in 2004. Hungarian Academy of Sciences: Focuses on basic biomedical research, primarily in the field of neuroscience.

THE PHARMACEUTICAL INDUSTRY PROVIDED FOR 46.9% PÉCS SZEGED OF THE MANUFACTURING INDUSTRY’S University of Pécs: University of Szeged: R&D EXPENDITURES IN 2014. One of Hungary’s largest higher education Hungary’s second largest education and institutions. research centre. (source: HCSO) Science Building Research Institute: Szeged Neurobiological Knowledge Centre: Completed in 2012, a key objective of the Therapy-oriented neurobiological research project was to improve the basic research from molecules to the integrated functioning potential in the most progressive areas of of the nervous system. life sciences. Biotechnology and Pharmacology Innova- tion Cluster: A recently established, Szeged-based collabo- ration of SMEs involved in life sciences. Life Sciences in Hungary 31

INNOVATION Highly CLINICAL RESEARCH motivated Higher and loyal incidence investigators Fast and of certain reliable patient disorders than recruitment in Western Europe Local study monitors and EU- ATTRACTIVE CROs are compliant more highly legislation LOCATION FOR CLINICAL skilled than the international RESEARCH average BENEFITS Wide High density of availability well-equipped OF CLINICAL of untreated HUNGARY HAS A Phase I study patient WORLDWIDE REPUTATION centres TRIALS populations FOR INTERNATIONAL Similarly to the health care system, IN HUNGARY CLINICAL TRIALS, WITH the national 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 Patients trust systems physicians 330 National Health Insurance Fund concentrate and Western offer a unique means of access to large numbers medicine SUCH TRIALS patient data. Such concentration of of patients REGISTERED EVERY YEAR. information 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 diagnostics equipment OF 10 MILLION. to support complex trials

"With a population of 10 million people, the highest standard of medical care and great investiga- tor and patient engagement, Hungary exempli- fies an excellent setting for global clinical research." Vlad Bogin, MD, FACP, CEO of Cromos(tm) Pharma Life Sciences in Hungary 33

HIPA OUR SERVICES

HOW DO WE SUPPORT YOUR LIFE SCIENCES PROJECT?

BEFORE AFTER YOU MAKE A DECISION YOU HAVE CHOSEN WE OFFER YOU… HUNGARY

…one-stop-shop …tailor-made incentive …location search We are open to your We support your management consultancy offers and information & evaluation feedback and offer further expansion services to address your packages on the + madiation between and plans. business needs. business environment, site visits. government and business labour market, tax based on your inputs. regulations, etc.

PLEASE CONTACT US

…meetings with HR & …reference visits …assistance with Address: 1055 Budapest, Honvéd utca 20. Real Estate agencies, at companies that are your incentive Customer service: [email protected] Law firms and other already established application. Telephone: +36 1 872 6520 consultants in Hungary. Web: www.hipa.hu based on your needs. Life Sciences in Hungary 35

HIPA Regional grants are the most typical forms of incentives for greenfield / brownfield investments INCENTIVES OVERVIEW or reinvestments. The maximum amount of regional incentive 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 regulations on incentive opportunities are exceeding €50 million, the maximum intensity ratio Ain compliance with EU regulations. One can be increased by 10% for medium-sized and by of Hungary’s competitive advantages over other 20% for small enterprises. countries in the region is the government’s strong commitment to increasing the competitiveness of SMEs and large enterprises in Hungary. CENTRAL HUNGARY Alongside the regulatory tools that contribute Budapest to the competitive business environment of local companies, Hungary offers a wide range of 0 / 20 / 35% Miskolc incentives to facilitate foreign direct investments and reinvestments by local enterprises. Subsidies NORTHERN 25 % % HUNGARY may be granted as regional aid or specific aid, such 35 as R&D subsidies. Győr Debrecen CENTRAL NORTHERN TRANSDANUBIA GREAT PLAIN Székesfehérvár 50 % WESTERN TRANS- SOUTHERN THESE INCENTIVES INCLUDE, BUT ARE NOT LIMITED TO DANUBIA SOUTHERN GREAT PLAIN TRANSDANUBIA Szeged

Pécs

CASH SUBSIDIES TAX INCENTIVES LOW-INTEREST SPECIAL for investments, reduction of LOANS INCENTIVES training, corporate tax, of the free job creation social tax, or for enterprise zones The maximum aid intensity available decreases if and R&D encouraging R&D the investment is a large investment (exceeding activities… €50 million): 50% of the maximum aid intensity shown in the regional aid map is available for investments between €50 and €100 million, with 34% of the maximum aid intensity for investments over €100 million. Special tax incentives and EU tenders For information on up-to-date and individual for R&D investments incentive packages, please contact HIPA directly.