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IN HUNGARYLIFE SCIENCES
FOR YOUR INVESTMENTOPENING DOORS
CONTENT
LIFE SCIENCES IN HUNGARY
LABOUR FORCE
INNOVATION
ABOUT HUNGARY
HUNGARIAN INVESTMENTPROMOTION AGENCY (HIPA)
6
12
22
26
32
Published by the Hungarian Investment Promotion Agency, HIPAAll rights reserved © HIPA, 2016
www.hipa.hu
Life Sciences in Hungary 5
LIFE SCIENCES
78%
65%57%
41% 40%
27%
HUNGARY Source: wiiw FDI Database, 2016
POLAND ROMANIA SLOVENIACZECHREPUBLIC
SLOVAKIA
Inward FDI stock in 2014 (percentage of GDP)
HUNGARY
(Source: *HCSO = Hungarian Central Statistical Office)
AREA
93,030 km2
FORM OF GOVERMENT
PARLIAMENTARY REPUBLIC
TIME ZONEGMT + 1 HOUR
CURRENCYFORINT
(HUF)
GDP (PPP)€ 183,989 MILLION
(2014)
UNEMPLOYMENTRATE6.8 %
(2015, HCSO)
INFLATION-0.1%
(2015, HCSO*)
MEMBERSHIP IN INTERNATIONAL ORGANISATIONS
EU, UN, OECD, WTO, NATO, IMF, ECEU member: since 2004
CLIMATETEMPERATE
(similar to the rest of the continental zone)
RISK OF NATURALDISASTERSVERY LOW
OTHER MAJOR CITIES
Debrecen (203,506)Szeged (162,593)Miskolc (159,554)Pécs (145,985)Győr (129,372)
CAPITALBUDAPEST
1,757,618(as of January 2015)
POPULATION
9,855,571(as of January 2015)
ABOUT HUNGARYMAIN FIGURES
Life Sciences in Hungary 7
INV
ESTM
ENTS
IN F
OCU
S
…created one of the most competitive FLEXIBLE LABOUR
CODEs in Europe(in favour of employers).
…has reduced the CORPORATE TAX RATE
to the lowest level in the CEE region.
…has introduceda FOREIGN-TRADE
FOCUSED foreign policyto attract FDI.
IN ORDERTO IMPROVE THE
BUSINESS CLIMATE, THE HUNGARIAN GOVERNMENT…
…has doubled the amount of
financial support forR&D ACTIVITIES in the 2016-2020
period.
…has reduced the PERSONAL
INCOME TAX
to 15%
…introduced a new act on a practice based DUAL TRAINING
in favour of business needs.
…has entered intoSTRATEGIC PARTNERSHIP
AGREEMENTSwith numerous companies,
giving fast access to the government via workshops and
regular consultations.
ABOUT HUNGARYBUSINESS ENVIRONMENT
Life Sciences in Hungary 9
EXPATS LIKE HUNGARYBudapest is a city full of surprises and wonder, with its lively centre, pretty parks, majestic river, tall church spires, and lavish spas. One of the most exciting cities 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 option.According to Trip Advisor, Budapest is offering the best price-value ratio in the world. Accord-ing to Condé Nast Traveler readers, Budapest is the second best city on Earth.
INTERNATIONAL SCHOOLSExpatriates looking to stick with the curricula of their home countries can choose from a range of private international schools for their children. 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.
EXPLORE THE COUNTRYSIDEHungary’s diverse countryside offers a wide range of outdoor activities: 11,000 kilometres of hiking routes; more than 2,500 kilometres of bicycle paths; 17 golf courses; ten national parks; and an abundance of protected nature reserves for the lovers of fresh air. The protected Puszta-region, the Great Plains, the romantic Danube Bend with its historic sites, and pretty baroque towns such as Eger attract visitors all over the year. Lake Balaton, the largest fresh water lake in Central Europe, is a perfect holiday resort.
THERMAL WATER Hungary is blessed with an abundance of thermal water, and its bathing culture is sup-ported by excellent facilities. The world’s largest thermal lake suitable for bathing is in the Western Hungarian town of Hévíz; the water temperature never drops below a tepid 79°F/26°C, so a dip is possible at any time of year!
IS THE 2. BEST CITYBUDAPEST
ON EARTH
(Condé Nast Traveler, 2015)
Life Sciences in Hungary 11
ABOUT HUNGARYQUALITY OF LIFE
LIFE SCIENCES IN HUNGARYSTRONG POSITION
1
5b
4
1
2
5a
3
TOP 5 CITIES IN LIFE SCIENCES: 1. Budapest, Hungary2. Skopje, Macedonia3. Istanbul, Turkey4. Moscow, Russia5/a Athens, Greece5/b Warsaw, Poland
Budapest was the most attractive city of the Eastern European and Central Asian 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 infor-mation technology and communications and achieved second place in the field of business and financial services.
NR. 1 IN LIFE SCIENCESThe 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 popu-lation above 500,000 people.
Budapest
Budapest is displayed as one of the most dynamic hotspots of Central Europe, supported by the diversity of the city.
Life Sciences in Hungary 13
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.
A STRONG PHARMACEUTICAL INDUSTRY WITH A CENTURY-OLD TRADITION
LIFE SCIENCES IN HUNGARYBUILDING ON RICH TRADITIONS
Throughout the 20th century, Hungary was the most important supplier of medicine for Eastern Europe and remained at the 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.
Building on its rich traditions, today the Hungarian phar-maceutical industry contributes to the health of people in almost 80 countries around the world.
Ground-breaking contributions to life sciences were made, such as the first syn-thesis and mass production of Vitamin C, led by Nobel laureate Hungarian scien-tist, Albert Szent-Györgyi.
"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 pharmaceutical multinational based in Hungary, the solid operating of its research and development activity 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 international presence."Erik Bogsch, Managing Director, Gedeon Richter Plc.
Life Sciences in Hungary 15
LIFE SCIENCES IN HUNGARYREFERENCES
Hungary’s pharmaceutical traditions and internationally acknowledged achievements in chemistry and
biology serve as the basis of its healthy biotechnology sector.Today, the country has over 85 core biotechnology companies of various sizes focused on biotech R&D and manufacturing. The majority were established in 2005-2007, and market their products and services worldwide. Hungary has a proven track record in R&D and is a net contributor to the global biotech industry.
HEALTHY BIOTECH SECTOR
"With regards to innovation in the pharma sector Hungary is an attractive place and is among the top 10 countries in Europe in terms of the number of conducted clinical trials, bringing 300 million Euros of investment to the country every year."Pierre Faury, General Manager, Sanofi Hungary
GEDEON RICHTERThe nation’s first large-scale phar- maceutical producer, Richter was established in 1901 and remains the national flagship manufacturer. The largest independent drug maker in CEE, the company operates a highly regarded R&D centre, employing 950 people. Richter runs joint research programs with more than 30 leading university faculties and academic research institutes. The company is also active in original research, which is mainly focused on diseases of the central nervous system.
GLAXOSMITHKLINEIn 2002, UK-based multinational GSK acquired a vaccine production facility near Budapest making a strategic investment of over EUR 130 million. The plant produ- ces antigens for paediatric combination vaccines. The facility employs 220 people.
SANOFIIn 1991, France’s Sanofi acquired ownership of the traditional Hungarian pharmaceutical manufacturer, Chinoin. The French parent has three manufacturing sites in Hungary and also a regional distribution centre, from which products are shipped to 45 countries. Sanofi’s Hungarian activity also includes drug development. The company’s headcount in Hungary is around 2,100.
TEVAGlobal generics leader Teva Pharma- ceuticals acquired the Hungarian phar- maceutical company Biogal in 1995. Today the plant in Debrecen (Eastern Hungary) is the company’s main centre of manufacturing for the region and markets outside Europe. The company supplies products to 44 countries. Teva Group’s European generics R&D centre was inaugurated in 2009 in Debrecen. In Hungary, Teva operates three production sites and a packaging plant, employing 3,000 people.
EGIS (SERVIER)Established in 1912, Egis is one of the most prominent companies in the history of Hungarian pharmaceutical manufacturing. Now owned by France’s Servier, Egis is active in the pharmaceutical value chain from manufacturing through R&D to marketing. The company continues to build on the skills, talents and creativity of Hungarian scientists while focusing its R&D on cardiovascular diseases and disorders of the central nervous system. Servier employs a staff of 3,000 in Hungary.
THOSE WHO HAVE CHOSEN HUNGARY
Life Sciences in Hungary 17
"Highly educated professionals, an advantageous geographic setting and a supportive environment for investment have been the key drivers to make this development in Hungary."Claire Roger, General Manager, GlaxoSmithKline Ltd.
LIFE SCIENCES IN HUNGARYSUCCESS STORIES
RECENT SUCCESS STORIES AND DEVELOPMENTS
November, 2014 – French animal
healthcare company Ceva announced it would increase its
Hungarian production capacity by 40%. The company declared that further expansion of its poultry
vaccine manufacturing facility in Budapest was
expected in the years to come.
January, 2016 – GlaxoSmithKline has a
cutting edge vaccine manufacturing site in Gödöllő. The site was acquired by
GSK which then invested heavily to upgrade the facilities and technologies to bring new facilities
online in 2008. This site has a key role producing purified Diphtheria and Tetanus antigens which are
used in vaccines containing DT all over the world. An ongoing technology transfer project on the site has
now entered the implementation phase: as a result of this project, additional phases of the manufacturing
process of tetanus and diphtheria vaccines will be located in the Hungarian facility. GMP
operations are expected to commence in the first
half of 2016.
November, 2015 – US-based BD Biosciences, a
world leading provider of diagnostic and research tools for life scientists
celebrated the foundation of its new facility 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.
October, 2012 –Global generics leader
Teva Pharmaceuticals opened a new EUR 65 million sterile plant near Budapest, creating 260 new
jobs. The facility is one of the biggest of its type in Europe and will operate
with an annual production capacity of 160-200 million units. The new plant will supply
patients in more than 70 countries.
July, 2013 – Hungarian drug maker
Egis, owned by France’s Servier, announced an EUR 16
million investment to strengthen its research and development capacity. The expansion will
create new R&D jobs at the company’s
Budapest site.
Life Sciences in Hungary 19
BUILDING ON HISTORY- VETERINARY SCIENCES
LIFE SCIENCES IN HUNGARYVETERINARY SCIENCES
1905
"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 launched numerous vaccines including the best sellers CevacTransmune IBD, Cevac IBD L, Coglavax, Cogla-pest, Coglapix and Coxevac just to name a few."Thierry Le Flohic, General Manager, Ceva-Phylaxia
Veterinary sciences also have deep roots
in Hungary, with the beginnings of veterinary serum production dating back to the early
1900s.
In 1912, the Phylaxia Serum Producing
Company was established to develop and produce the
classical swine fever serum.
From the 1920s, new vaccines were produced, targeting
anthrax, swine erysipelas and
poultry cholera.
In 1948, all Hungarian biological
production laboratories were reorganized into a single company.
In the 1970s, the company became
a national and international centre
of innovation for veterinary sciences
with more than 2,000 employees and 200
different products manufactured.
In 1999, the company became
a subsidiary of Ceva.
Scientists at Ceva-Phylaxia continue to build on the knowledge-base of their
predecessors. The company’s largest biological R&D centre is in Budapest with a staff of 120.
In July 2014, Ceva-Phylaxia celebrated the 50 billionth
poultry vaccine manufactured in Hungary.
1900s 1912 1920s 1948 1970s 1999 TODAY
Life Sciences in Hungary 21
1561Health service
manager
1340Chemical engineer
1399Chemist
961Biologist, botanist,
zoologist and related professional
1112General
practitioner
1182Pharmacist, specialized pharmacist
786Chemical
engineering technician
473Dental
technician
765Other human
health care related
professional
918Basic chemicals
and chemical products machine operator
1044Pharmaceutical
products machine operator
LABOUR FORCEPRODUCTIVITY
The Hungarian labour force is well qualified and cost effective, which increases the country’s international competitiveness. The large number of high quality research institutions are 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.
(Source: National Employment Service, 2014)
Life Sciences in Hungary 23
GLOBALLYRELY ACKNOWLEDGED HUMAN CAPITAL AT A REASONABLE COST
AVERAGE GROSS WAGES IN 2014 (EUR)
LABOUR FORCEEDUCATION
"Hungary has the most developed phar-maceutical industry in the CEE region; 50% of all industrial R&D investments realised in the country derives from this highly innovation driven sector. Gov-ernment incentives contribute to our operations, as well as the central geo-graphic location of Hungary. The globally acknowledged local expertise, state of the art technologies and favourable infra-structure provide a solid background for our research and for the production of medication of the highest quality."Dr. István Hodász, CEO, Egis
Life Sciences in Hungary 25
MORE THAN
19,000 LIFE SCIENCES STUDENTS IN
TERTIARY EDUCATION
IN 2013/2014
250BIOTECH-RELATED
RESEARCH AND EDUCATIONAL
INSTITUTES MAIN CENTERS:
BUDAPEST, PÉCS, SZEGED,
DEBRECEN
SzegedPécs
Budapest
Debrecen
INNOVATIONR&D POTENTIAL
1925ALBERT SZENT-GYÖRGYI MEDICINEStudy on Vitamin C and cell respiration
1961GEORG VON BÉKÉSYMEDICINEThe physical mechanism of stimulation within the cochlea
1971DENNIS GABOR PHYSICSThe invention and development of holography
1994GEORGE ANDREW OLAH CHEMISTRYContributions to carbocation chemistry
1914ROBERT BÁRÁNY MEDICINEPhysiology and pathology of the vestibular apparatus
1905FÜLÖP VON LÉNÁRD
PHYSICSCathode ray
1925RICHARD ADOLF
ZSIGMONDYCHEMISTRY
Demonstration of the heterogeneous nature of
colloidal solutions
1943GEORGE DE HEVESY
CHEMISTRYThe use of radioactive tracers
in the study of biochemical processes
1963EUGENE WIGNER
PHYSICSContributions to the theory
of the atomic nucleus and the elementary particles
1986JOHN CHARLES POLANYI
CHEMISTRYContributions to
carbocation chemistry
2004ADAM HERSHKO
CHEMISTRYThe discovery of ubiquitin-
mediated protein degradation
The scientific creativity of Hungarians is internationally recognized, which is apparent from the large number of Nobel laureates of Hungarian origin. This talent is particularly noticeable in the fields of natural, technical and medical sciences. Although biotechnology is a relatively young science, its related industries and research fields have longstanding traditions in Hungary, giving companies access to a deep knowledge-base.
R&D IN HUNGARIANLIFE SCIENCES
HUNGARIAN NOBEL LAUREATES
Life Sciences in Hungary 27
INNOVATIONUNIVERSITY CAPABILITIES
SZEGEDUniversity of Szeged:Hungary’s second largest education and research centre.Szeged Neurobiological Knowledge Centre:Therapy-oriented neurobiological research from molecules to the integrated functioning of the nervous system.Biotechnology and Pharmacology Innova-tion Cluster:A recently established, Szeged-based collabo- ration of SMEs involved in life sciences.
BUDAPESTSemmelweis University:Widely recognized as one of Europe’s leading centres of medical and health sciences. János Szentágothay Centre of Excellence:Carries out immuno-genomic research, modi- fied tissue proliferation, common molecular targets in endemics, info-bionomics in medi- cine and neuroscientific research. Cell Communication Knowledge Centre: Involved in the development of new technolo-gies based on research of diseases caused by impaired cell communication. Institute of Experimental Medicine of the Hungarian Academy of Sciences:Focuses on basic biomedical research, primarily in the field of neuroscience.
DEBRECENUniversity of Debrecen:The newly established Life Science Centre for molecular medicine, biology and agricultural sciences.Genomnanotech Regional Knowledge Centre:Targets cutting-edge technologies developed at the Debrecen University and its region, including genomics, nano- and biotechnologies.Pharmapolis Innovative Pharmaceutical Cluster: A recently established regional biotechnology cluster.Research Centre of Molecular Medicine:Recognized as a “Centre of Excellence” by the European Union in 2004.
PÉCSUniversity of Pécs:One of Hungary’s largest higher education institutions.Science Building Research Institute:Completed in 2012, a key objective of the project was to improve the basic research potential in the most progressive areas of life sciences.
Life Sciences in Hungary 29
THE PHARMACEUTICAL INDUSTRY PROVIDED FOR
46.9%OF THE MANUFACTURING INDUSTRY’S
R&D EXPENDITURES IN 2014. (source: HCSO)
LIFE SCIENCES R&D IS CONCENTRATED AROUND FOUR MAJOR CITIES IN HUNGARY
INNOVATIONCLINICAL RESEARCH
BENEFITS OF CLINICAL
TRIALS IN HUNGARY
Highly motivated and loyal
investigators Fast and reliable patient
recruitment
EU-compliant legislation
Wide availability
of untreated patient
populations
Patients trust physicians
and Western medicine
Outstanding data qualityModern
hospital and diagnostics equipment to support
complex trials
Excellent English
language skills
Centralized health care
systems concentrate
large numbers of patients
High density of well-equipped Phase I study
centres
Local study monitors and
CROs are more highly
skilled than the international
average
Higher incidence of certain
disorders than in Western
Europe
"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 31
Similarly to the health care system, the national health insurance scheme is also centralized in Hungary. Being the sole health insurance provider in the country, the databases of the National Health Insurance Fund offer a unique means of access to patient data. Such concentration of information makes Hungary an even more favourable choice for companies engaged in clinical research.
HUNGARY HAS A WORLDWIDE REPUTATION
FOR INTERNATIONAL CLINICAL TRIALS, WITH
MORE THAN
SUCH TRIALS REGISTERED EVERY YEAR.THIS IS AN OUTSTANDING
NUMBER CONSIDERING HUNGARY’S POPULATION
OF 10 MILLION.
ATTRACTIVE LOCATION FOR CLINICAL RESEARCH
330
HOW DO WE SUPPORT YOUR LIFE SCIENCES PROJECT?
AFTER YOU HAVE CHOSEN
HUNGARY
PLEASE CONTACT US
Address: 1055 Budapest, Honvéd utca 20. Customer service: investment@hipa.hu
Telephone: +36 1 872 6520Web: www.hipa.hu
We are open to your feedback and offer madiation between
government and business based on your inputs.
We support your further expansion
and plans.
BEFORE YOU MAKE A DECISION
WE OFFER YOU…
…one-stop-shop management consultancy services to address your
business needs.
…meetings with HR & Real Estate agencies, Law firms and other
consultants based on your needs.
…tailor-made incentive offers and information
packages on the business environment,
labour market, tax regulations, etc.
…reference visits at companies that are
already established in Hungary.
…location search & evaluation
+site visits.
…assistance with your incentive
application.
Life Sciences in Hungary 33
HIPAOUR SERVICES
As a member of the European Union, Hungary’s regulations on incentive opportunities are in compliance with EU regulations. One
of Hungary’s competitive advantages over other countries in the region is the government’s strong commitment to increasing the competitiveness of SMEs and large enterprises in Hungary.Alongside the regulatory tools that contribute to the competitive business environment of local companies, Hungary offers a wide range of incentives to facilitate foreign direct investments and reinvestments by local enterprises. Subsidies may be granted as regional aid or specific aid, such as R&D subsidies.
Special tax incentives and EU tenders for R&D investments
GOVERNMENT INCENTIVES
CASH SUBSIDIESfor investments,
training, job creation
and R&D
TAX INCENTIVESreduction of
corporate tax, social tax, or for
encouraging R&D activities…
LOW-INTEREST LOANS
SPECIAL INCENTIVES
of the free enterprise zones
THESE INCENTIVES INCLUDE, BUT ARE NOT LIMITED TO
HIPAINCENTIVES OVERVIEW
Regional grants are the most typical forms of incentives for greenfield / brownfield investments or reinvestments. The maximum amount of regional incentive is shown in the regional aid intensity map. The map below illustrates that, depending on the region, regional aid available for investment by a large enterprise may be up to 50% of the eligible costs of the investment. For investments not exceeding €50 million, the maximum intensity ratio can be increased by 10% for medium-sized and by 20% for small enterprises.
The maximum aid intensity available decreases if 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 34% of the maximum aid intensity for investments over €100 million.For information on up-to-date and individual incentive packages, please contact HIPA directly.
SOUTHERNTRANSDANUBIA
CENTRALTRANSDANUBIA
WESTERNTRANS-
DANUBIASOUTHERN
GREAT PLAIN
NORTHERNGREAT PLAIN
NORTHERNHUNGARY
CENTRAL HUNGARYBudapest
Szeged
Debrecen
Miskolc
Győr
Székesfehérvár
25% 35%
Pécs
0 / 20 / 35%
50%
Life Sciences in Hungary 35
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