LIFE SCIENCES
IN
HUNGARY
OPENING DOORS
FOR YOUR INVESTMENT
Life Sciences in Hungary
LIFE SCIENCES
CONTENT
Published by the Hungarian Investment
Promotion Agency, HIPA
All rights reserved © HIPA, 2016
www.hipa.hu
6
ABOUT HUNGARY
12
LIFE SCIENCES IN
HUNGARY
22
LABOUR FORCE
26
INNOVATION
32
HUNGARIAN INVESTMENT
PROMOTION AGENCY (HIPA)
5
Life Sciences in Hungary
7
ABOUT HUNGARY
MAIN FIGURES
FORM OF
GOVERMENT
PARLIAMENTARY
REPUBLIC
AREA
93,030 km
2
CURRENCY
FORINT
(HUF)
GDP (PPP)
€ 183,989
MILLION
(2014)
INFLATION
-0.1%
(2015, HCSO*)
TIME ZONE
GMT + 1 HOUR
UNEMPLOYMENT
RATE
6.8 %
(2015, HCSO)
HUNGARY
9,855,571
(as of January 2015)
OTHER MAJOR CITIES
CAPITAL
BUDAPEST
1,757,618
POPULATION
Debrecen (203,506)
Szeged (162,593)
Miskolc (159,554)
Pécs (145,985)
Győr (129,372)
(as of January 2015)
78%
65%
CLIMATE
TEMPERATE
57%
41%
(similar to the rest of
the continental zone)
40%
RISK OF NATURAL
DISASTERS
VERY LOW
27%
Inward FDI stock in 2014
(percentage of GDP)
HUNGARY
CZECH SLOVAKIA POLAND ROMANIA SLOVENIA
REPUBLIC
Source: wiiw FDI
Database, 2016
MEMBERSHIP IN INTERNATIONAL
ORGANISATIONS
EU, UN, OECD, WTO, NATO, IMF, EC
EU member: since 2004
(Source: *HCSO
= Hungarian Central Statistical Office)
Life Sciences in Hungary
ABOUT HUNGARY
…has reduced the
CORPORATE TAX RATE
to the lowest level
in the CEE region.
INVESTMENTS IN FOCUS
BUSINESS ENVIRONMENT
IN ORDER
TO IMPROVE THE
BUSINESS CLIMATE,
THE HUNGARIAN
GOVERNMENT…
9
…introduced a new act
on a practice based
DUAL TRAINING
in favour of business
needs.
…has reduced the
PERSONAL
INCOME TAX
to 15%
…created one of
the most competitive
FLEXIBLE LABOUR
CODEs in Europe
(in favour of
employers).
…has entered into
STRATEGIC PARTNERSHIP
AGREEMENTS
with numerous companies,
giving fast access to the
government via workshops and
regular consultations.
…has doubled
the amount of
financial support for
R&D ACTIVITIES
in the 2016-2020
period.
…has introduced
a FOREIGN-TRADE
FOCUSED foreign policy
to attract FDI.
Life Sciences in Hungary
EXPATS LIKE HUNGARY
ABOUT HUNGARY
Budapest 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. According to Condé Nast Traveler readers, Budapest
is the second best city on Earth.
QUALITY OF LIFE
EXPLORE THE COUNTRYSIDE
Hungary’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.
2.
BUDAPEST
IS THE
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
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!
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INTERNATIONAL SCHOOLS
Expatriates 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.
Life Sciences in Hungary
LIFE SCIENCES IN HUNGARY
STRONG POSITION
NR. 1 IN LIFE SCIENCES
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TOP 5 CITIES IN LIFE SCIENCES:
1. Budapest, Hungary
2. Skopje, Macedonia
3. Istanbul, Turkey
4. Moscow, Russia
5/a Athens, Greece
5/b Warsaw, Poland
The Conway group – a company providing
comprehensive corporate investment consulting – 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
5b
1
Budapest
is displayed
as one of the most dynamic
hotspots of Central Europe,
supported by the diversity of
the city.
1
Budapest
2
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 information technology and communications
and achieved second place in the field of
business and financial services.
3
5a
Life Sciences in Hungary
LIFE SCIENCES IN HUNGARY
BUILDING ON RICH TRADITIONS
A STRONG
PHARMACEUTICAL
INDUSTRY WITH
A CENTURY-OLD
TRADITION
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 pharmaceutical industry contributes to the health of people
in almost 80 countries around the world.
Hungary’s modern pharmaceutical industry was established in 1901 by Gedeon Richter who began industrialscale manufacturing in his Budapest pharmacy laboratory. During the 1910s and 1920s, the foundations were
laid down for one of Hungary’s most successful and globally-renowned industrial sectors.
Ground-breaking contributions to life
sciences were made, such as the first synthesis and mass production of Vitamin C,
led by Nobel laureate Hungarian scientist, 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.
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Life Sciences in Hungary
17
LIFE SCIENCES IN HUNGARY
REFERENCES
TEVA
GLAXOSMITHKLINE
In 2002, UK-based multinational GSK
acquired a vaccine production facility near
Budapest making a strategic investment
of over EUR 130 million. The plant produces antigens for paediatric combination
vaccines. The facility employs 220
people.
HEALTHY
BIOTECH
SECTOR
H
ungary’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.
GEDEON RICHTER
THOSE
WHO HAVE
CHOSEN HUNGARY
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.
The nation’s first large-scale pharmaceutical 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.
Global generics leader Teva Pharmaceuticals acquired the Hungarian pharmaceutical 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.
SANOFI
In 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.
"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
Life Sciences in Hungary
LIFE SCIENCES IN HUNGARY
"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.
SUCCESS STORIES
RECENT
SUCCESS
STORIES AND
DEVELOPMENTS
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.
19
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.
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.
Life Sciences in Hungary
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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
launched numerous vaccines including the best sellers
CevacTransmune IBD, Cevac IBD L, Coglavax, Coglapest, Coglapix and Coxevac just to name a few."
Thierry Le Flohic, General Manager, Ceva-Phylaxia
BUILDING
ON HISTORYVETERINARY
SCIENCES
1900s
Veterinary sciences
also have deep roots
in Hungary, with
the beginnings of
veterinary serum
production dating
back to the early
1900s.
1912
1920s
1948
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.
1970s
1905
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.
1999
In 1999, the
company became
a subsidiary of
Ceva.
TODAY
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.
Life Sciences in Hungary
LABOUR FORCE
PRODUCTIVITY
23
GLOBALLYRELY
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
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.
AVERAGE GROSS WAGES
IN 2014 (EUR)
1561
Health service
manager
1340
Chemical
engineer
1182 786
Pharmacist,
specialized
pharmacist
Chemical
engineering
technician
1399
473
Dental
technician
Chemist
765
961
Biologist, botanist,
zoologist and
related professional
Other human
health care
related
professional
918
Basic chemicals
and chemical
products
machine
operator
1112
General
practitioner
1044
Pharmaceutical
products
machine
operator
(Source: National Employment Service, 2014)
Life Sciences in Hungary
25
LABOUR FORCE
EDUCATION
250
BIOTECH-RELATED
RESEARCH AND
EDUCATIONAL
INSTITUTES
MORE THAN
19,000
MAIN CENTERS:
BUDAPEST,
PÉCS, SZEGED,
DEBRECEN
LIFE SCIENCES
STUDENTS IN
TERTIARY
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. Government incentives contribute to our
operations, as well as the central geographic location of Hungary. The globally
acknowledged local expertise, state of the
art technologies and favourable infrastructure provide a solid background
for our research and for the production
of medication of the highest quality."
Dr. István Hodász, CEO, Egis
Debrecen
Budapest
Pécs
Szeged
Life Sciences in Hungary
INNOVATION
R&D POTENTIAL
R&D
IN HUNGARIAN
LIFE SCIENCES
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.
2004
ADAM HERSHKO
CHEMISTRY
The discovery of ubiquitinmediated protein degradation
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HUNGARIAN
NOBEL LAUREATES
1994
1986
JOHN CHARLES POLANYI
CHEMISTRY
Contributions to
carbocation chemistry
1963
EUGENE WIGNER
PHYSICS
Contributions to the theory
of the atomic nucleus and the
elementary particles
1943
GEORGE DE HEVESY
CHEMISTRY
The use of radioactive tracers
in the study of biochemical
processes
1925
RICHARD ADOLF
ZSIGMONDY
CHEMISTRY
Demonstration of the
heterogeneous nature of
colloidal solutions
1905
FÜLÖP VON LÉNÁRD
PHYSICS
Cathode ray
GEORGE ANDREW OLAH
CHEMISTRY
Contributions to carbocation
chemistry
1971
DENNIS GABOR
PHYSICS
The invention and
development of holography
1961
GEORG VON BÉKÉSY
MEDICINE
The physical mechanism
of stimulation within
the cochlea
1925
ALBERT SZENT-GYÖRGYI
MEDICINE
Study on Vitamin C
and cell respiration
1914
ROBERT BÁRÁNY
MEDICINE
Physiology and pathology
of the vestibular apparatus
Life Sciences in Hungary
INNOVATION
UNIVERSITY CAPABILITIES
LIFE SCIENCES R&D IS
CONCENTRATED
AROUND FOUR MAJOR
CITIES IN HUNGARY
BUDAPEST
Semmelweis 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, modified tissue proliferation, common molecular
targets in endemics, info-bionomics in medicine and neuroscientific research.
Cell Communication Knowledge Centre:
Involved in the development of new technologies 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.
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DEBRECEN
University 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.
THE PHARMACEUTICAL INDUSTRY
PROVIDED FOR
46.9%
OF THE MANUFACTURING INDUSTRY’S
R&D EXPENDITURES IN 2014.
(source: HCSO)
PÉCS
University 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.
SZEGED
University 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 Innovation Cluster:
A recently established, Szeged-based collaboration of SMEs involved in life sciences.
Life Sciences in Hungary
INNOVATION
CLINICAL RESEARCH
ATTRACTIVE
LOCATION FOR CLINICAL
RESEARCH
HUNGARY HAS A
WORLDWIDE REPUTATION
FOR INTERNATIONAL
CLINICAL TRIALS, WITH
MORE THAN
330
SUCH TRIALS
REGISTERED EVERY YEAR.
THIS IS AN OUTSTANDING
NUMBER CONSIDERING
HUNGARY’S POPULATION
OF 10 MILLION.
Higher
incidence
of certain
disorders than
in Western
Europe
Fast and
reliable patient
recruitment
Local study
monitors and
CROs are
more highly
skilled than the
international
average
EUcompliant
legislation
BENEFITS
OF CLINICAL
TRIALS
IN HUNGARY
High density of
well-equipped
Phase I study
centres
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.
Highly
motivated
and loyal
investigators
31
Centralized
health care
systems
concentrate
large numbers
of patients
Wide
availability
of untreated
patient
populations
Patients trust
physicians
and Western
medicine
Excellent
English
language
skills
Modern
hospital and
diagnostics
equipment
to support
complex trials
Outstanding
data quality
"With a population of 10 million people, the highest
standard of medical care and great investigator and patient engagement, Hungary exemplifies an excellent setting for global clinical research."
Vlad Bogin, MD, FACP, CEO of Cromos(tm) Pharma
Life Sciences in Hungary
HIPA
OUR SERVICES
HOW DO WE SUPPORT YOUR
LIFE SCIENCES PROJECT?
BEFORE
YOU MAKE A DECISION
WE OFFER YOU…
…one-stop-shop
management consultancy
services to address your
business needs.
…tailor-made incentive
offers and information
packages on the
business environment,
labour market, tax
regulations, etc.
AFTER
YOU HAVE CHOSEN
HUNGARY
…location search
& evaluation
+
site visits.
We are open to your
feedback and offer
madiation between
government and business
based on your inputs.
We support your
further expansion
and plans.
PLEASE CONTACT US
…meetings with HR &
Real Estate agencies,
Law firms and other
consultants
based on your needs.
…reference visits
at companies that are
already established
in Hungary.
…assistance with
your incentive
application.
Address: 1055 Budapest, Honvéd utca 20.
Customer service: [email protected]
Telephone: +36 1 872 6520
Web: www.hipa.hu
33
Life Sciences in Hungary
HIPA
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.
INCENTIVES OVERVIEW
GOVERNMENT INCENTIVES
A
s 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.
CENTRAL HUNGARY
Budapest
25%
0 / 20 / 35%
35%
Miskolc
NORTHERN
HUNGARY
Debrecen
Győr
NORTHERN
GREAT PLAIN
CENTRAL
TRANSDANUBIA
Székesfehérvár
THESE INCENTIVES INCLUDE, BUT ARE NOT LIMITED TO
WESTERN
TRANSDANUBIA
SOUTHERN
TRANSDANUBIA
SOUTHERN
GREAT PLAIN
Szeged
Pécs
CASH SUBSIDIES
for investments,
training,
job creation
and R&D
TAX INCENTIVES
reduction of
corporate tax,
social tax, or for
encouraging R&D
activities…
LOW-INTEREST
LOANS
Special tax incentives and EU tenders
for R&D investments
SPECIAL
INCENTIVES
of the free
enterprise zones
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.
50%
35