Life sciences: The UK needs to connect the dots

The recent Genesis conference in London, hosted a weighty debate around whether the UK ecosystem is conducive to a strong life sciences sector. It scoped out the science, industry, political environment and public policy, human talent, access to capital, and nurturing entrepreneurship.

A panel of life science industrialists and practitioners presented one case, a panel of politicos and infrastructural enablers presented another. And through the wizardry of wireless voting buttons, the audience could express an electronic show of hands – instantaneously projected to the screens.

So, is the UK ecosystem conducive to life sciences? Well, the audience was split down the middle, 50:50 (50.9:49.1 to be precise).

Hurdles to market entry

Kicking off the discussion and pointing to strengths in the UK, Shaun Grady – VP Strategic Partnering and Business Development at AstraZeneca (AZN) – highlighted government initiatives that have provided financial support for life sciences. These included Regional Growth Funds, patent and R&D tax incentives, and funding of research councils.

However, Shaun also noted that AZN (which invests £1.6bn in R&D in the UK) is looking globally for a competitive environment in which to operate. His particular concern with the UK is the reimbursement of new drugs, both on price and uptake. 

“When boards are making decisions about where to put their next research dollars, the general commercial climate, and how they feel that innovation is welcomed in a particular territory is key,” he said; adding that in the UK, having achieved regulatory approval and NICE recommendation, there is still no guarantee that a drug will be taken up in the NHS. 

Following on from this, Greer Deal, Global Regulatory Services (a consultancy specialising in product regulatory approval) pointed to the time taken for product approvals in the UK as another issue. “When you submit a dossier for approval, the MHRA [the UK drug approval body] must turn around their assessment in 210 days. However, if there is a question – the clock stops – so this takes regulatory approval in to years.” Speed is important and to be globally competitive, Greer believes this needs to be brought down to 12 – 18 months.

Healthy new shoots and strong roots

Despite these factors, Glen Crocker CEO of UK bioincubator network BioCity, believes the sector is growing fast. He notes that where Pharma has left the UK, the sites are rapidly filling with new, high-growth companies. Glen believes these small companies will be the future engines of the sector, with the role of big Pharma increasingly moving to late stage clinical trials, regulatory approval, and sales & marketing.

With Pharma companies needing to in-license products and technologies to fill their pipelines Lubor Gaal, Head of Europe Transactions at Bristol-Myers Squibb, said that it is excellent research that attracts the Pharma industry to a country. “At BMS, we are agnostic about country – we go wherever there is good medical research.” He noted that this year China has, for the first time, published the most peer-reviewed research in life sciences.

On the basis of research, the UK is exceptionally well-poised, as agreed by all parties; it is recognised globally as centre of research excellence. However, Lubor noted that he was not convinced that the UK systematically tracked all its research, and as such it is hard to know exactly what commercial potential is out there.

And this sentiment was re-enforced by David Phillips, a Partner at SROne, GlaxoSmithKline’s venture capital wing. “We have a whole team searching for disruptive technologies from the UK, but it’s a case man-power to track these down.” This means that exciting and commercially valuable technologies could easily be missed if small companies are not ensuring they are visible.

Building on the facets of UK expertise, Prof Sir Robert Lechler, Executive Director of King’s Health Partners, pitched that the UK is a very attractive place to conduct experimental medicine and early stage trials. Sir Robert also pointed out that alongside the world-beating clinical investigators, the NHS is an immense resource for identifying relevant patients for clinical trials. “We have great science and punch way above our weight in terms of biomedical research – we now also have fantastic experimental facilities in the UK.”

Such infrastructural faculties have not come about by chance. Indeed, Mark Treherne, from the Life Science Investment Organisation – part of the UKTI – said that the government has put forward £992m over recent years to support the infrastructure for clinical trials and experimental medicine.

Gone too far, or the wrong direction?

While acknowledging the success of government initiatives to create research excellence, the serial biotech entrepreneur Ken Powell noted there’s almost an excess of talented researchers.

“The government has invested vast sums in life sciences to create this research talent – but the bulk of the profits are going abroad,” he said. Ken then cited the example of Cambridge Antibody Technology, whose technology identified a candidate that went on to become the world’s biggest selling drug. Humira, which treats a wide variety of disorders related to the immune system, sold circa $4bn in the US over the last four quarters, but the profits went to Abbott Laboratories in the US.

Following on from this, Ken asked the question: “Where is the management?” In doing so he pointed to the fact that there are surprisingly few serial entrepreneurs that stay in the UK, thus there is a lack of commercial nous to establish the next waves of biotech companies.

Taking this thread further, Mike Ward, Editor-in-Chief of leading industry publication SCRIP Intelligence, noted that continental Europe and West Coast US is populated with serial entrepreneurs from the UK suggesting that these people clearly think the UK is hostile – or at least not the most favourable.

The potential fix

Andrew Pulkrabek of UK/US venture capital firm LifeScience Ventures asked the cutting question: “Is the UK operating in silos?”

Describing the ecosystem in such US life science hotspots as Boston, San Francisco, Research Triangle Park, Andrew noted that there is a highly connected ecosystem, from leading edge research and technology development with angel investors, seed stage and later stage investors. Additionally, there is infrastructure, management, and mentors who have been through the process before.

He concluded: “I don’t get the impression that all the elements don’t exist here, it’s just that they are not necessarily connected.”

And here I believe our US cousin has struck the nail on the head. There can be no doubt about the UK having the essential elements to make life sciences flourish in the UK – world-class research, a supportive government, premier capital markets, and the deep-rooted pharmaceutical industry. However, individual regions within the UK have forever battled to be the best in the country – North vs. South, Scotland vs. England, or the age old varsity match between Oxford and Cambridge – rather than present a single, unified face.

If you take Route 101, the scenic coast road, from San Francisco to San Diego, you’ll cover around 550 miles. That stretch of California is the world’s biggest biotech hub. The run from the UK’s most northern university in Aberdeen, down to the most southerly, Plymouth, is just shy of 600 miles – so, on a global scale, the UK is a single place that would benefit from a little more cohesion.

You can watch the plenary debate in full here.  

Adam

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Sachs Forum European Life Science CEO Forum for Partnering & Investing

March 2012 - Zurich
Adam Michael and Jamie Hooper represented the Abchurch Life Sciences practice by attending the first Sachs Biotech Investment Forum of the New Year in Zurich. As always the event was excellently attended with both private and listed biotech companies, a broad spectrum of the finance community, representatives from the medical profession and the occasional PR practitioner.

The format of the Sachs Forum gives attendees the best possible chance to maximise their time in Zurich with an efficient one-to-one meeting system, themed panel discussions, and networking facilities throughout the day. With over 200 companies attending, and a strong contingent of European life science investors, delegates at Sachs were kept very busy.

The panel sessions stimulated quality debate for both the day and evening networking (over a glass wine and canapés), covering such topics as; the resurgence of platforms technologies over products; the latest interactions between big pharma and biotech; and the current popularity of the French biotech industry with investors.

The one-to-one meeting system enables delegates to pre-arrange meetings with potential collaborators and investors, or to just help increase someone’s knowledge on a particular technology. Frequently compared to speed dating the platform gives attendees a fast, sharp opportunity to interact with numerous delegates in a more structured setting than the networking hall. The half hour sessions keep meetings to the point.

While times are still tough in life sciences, with capital hard to raise, and public markets shying away from life sciences, events like the Sachs CEO Forum give companies in the sector a real opportunity to present their case to investors and partners and maintain momentum across the industry.

One thing is for certain: the Swiss venue for the conference continues to garner strong support from both the vibrant and sophisticated finance community, and the local, world-leading, pharmaceutical industry.

Jamie Hooper

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F-star – a shining example of biotech and drug discovery

The ingredients for a successful biotech company are actually much like any other early-stage business: a good product with customer interest, management skilled to commercialise the product, and the financial backing to make the project a reality. It’s the simple, TV Dragons Den formula.

The difference with biotech is in assessing the quality and robustness of the technology, finding suitably experienced management, and sourcing the weighty investment necessary to succeed---pharmaceutical companies still quote $500m per drug to market, although good biotech companies should slash these costs.

I’ve been tracking F-star (www.f-star.com) since late 2009, just before it raised €8million in an extended series A, drawing in the venture wings of two pharmaceutical plays: MerckSerono and Mitsubishi Tanabe Pharma. Yesterday (September 7th 2011) the company announced that from the early investment from MerckSerono, a product development deal had evolved worth just shy of €500m. MerckSerono is providing three drug targets in inflammatory disease to which F-star is creating antibody drug candidates through its Modular Antibody technology.

Between these two events with MerckSerono, the company has also struck a deal with Boehringer Ingelheim worth up to up to €180m for each of seven targets, and closed an additional financing round of €15m, led by SR-one, GlaxoSmithKline’s venture wing. Other investors in the business include Novo Ventures, the venture arm of Danish pharma group Novo, and a purse of established life science venture capitalists.

These events have all fallen under the leadership of Kevin FitzGerald, who took to the CEO seat just seven months before closing the €8m financing in January 2010. Along the way the company has also managed to attract the likes of Sir Greg Winter, arguably the world’s leading academic on antibodies, to head the scientific advisory board.

So, a great product with significant pharma interest; a management team that is actively (and rapidly) progressing the company’s potential; and all healthily financed in a way few biotechs are in the current cycle. F-star is fulfilling a simple business formula. It’s now probably too hot for even the fieriest of Dragons, but are there deep-pocketed investors in life science that will recognise, buy into, and further progress the F-star proposition? I sense so.


Adam Michael


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