Promoting UK biotech’s voice and mission
pharmafile | June 8, 2011 | Feature | Research and Development | ERBI, One Nucleus, biotech
One Nucleus is a new organisation formed from the merger of two of England’s regional networks – ERBI (Eastern Region Biotechnology Initiative) and LBN (London Biotechnology Network).
The industry landscape we work in has changed dramatically in a relatively short amount of time. The investment climate has moved from domination by venture finance to a combination of public and corporate venture funding, forcing the life sciences sector to change the way they do raise money and do business. In this new environment, the pressure for small-to-medium life sciences companies to demonstrate capital efficiency, forge deals, bring in investment and knowledge has never been greater.
UK’s strengths and weaknesses in biotech
The UK is still an exceptional place to do business, and the life sciences industry is world beating. We regularly hear bad news stories about big pharma cuts, biotech funding being scarce, and good companies going under.
Yet the UK is a compelling location internationally with a highly skilled workforce; we have exceptional entrepreneurs, researchers, academics and commercial minds, an effective regulatory environment, groundbreaking discoveries and expanding research parks.
In terms of the biotech sector, the UK remains a leading global player in many areas – such as stem cell research and personalised medicine. It is home to 40% of Europe’s public companies and remains Europe’s most popular location for investment, with a strong track record in encouraging start-ups and bringing ‘products’ to market.
For an example of how the UK is considered reputationally internationally, you only have to look at the deals One Nucleus has done with the four major life science clusters in the US.
In the last 18 months we have signed Memoranda of Understanding (MOU’s) with the following: MassBIO, MassMedic, BIOCOM and BayBIO. This has built an exceptional platform for unprecedented two way trade.
The benefits for members on both sides of the pond are the same – to be treated as if they were members of the other organisation – with discounts on events and opportunities to speak at each others’ conferences.
Perhaps most importantly, the MOU’s mean that our members are offered a ‘soft landing’ by the US organisation when they are looking to penetrate that market, and vice versa.
Whether it be introductions to potential partners or investors or just hot-desking whilst in-market, One Nucleus and their US counterparts are collaborating for the good of their collective – and global – membership.
These collaborations would not have been possible if our membership, and the UK, were not a credible critical mass to do business with.
Recession, government, spending review
Progress is difficult to assess when the governance framework on many of the key fronts is very much in debate. The key recognition in BIGTR2 – that momentum in making the NHS a champion for the development and uptake of innovative medicines was far lower than hoped – resulted in the recommendation to support the ‘therapeutic cluster’ concept to attract business to the UK.
This has retained moral support from the new government and stakeholders continue to engage, but it is not widely apparent what progress is actually being made and what the longer term future looks like for this initiative.
Access to finance remains a major barrier to our life science sector growth. The new government has protected the science budget to a good degree which should be celebrated, but the introduction of tax incentives such as consortium relief and the patent box credit, whilst welcome, are likely to be of limited influence in a global pharma re-organisation.
The potential to not only protect, but to increase the R&D tax credit benefits is of real interest to emerging life science companies, and the government’s taking note of not only BIGTR2, but also the Dyson report is to be welcomed. The retention of a world-leading skills base will be critical to success, but this can only be realistically achieved if the sector is financially viable and incentivised. Rationalising the Sector Skills Council activity into Cogent for the industry seems to be a step in the right direction.
The availability of comprehensive and accurate data on the sector in the UK remains elusive, however, and this must be seen as key to enabling UK Trade & Investment to enhance their attraction of global businesses to invest, as well as informing policymakers when developing market interventions.
The development of such a vital knowledge resource was very slow before the economic downturn and change in government, and it appears almost absent since.
UK biotechs doing well
Against a backdrop of changing pharma activity, scarcity of risk capital and a difficult route to market, there are still cases to celebrate.
Astex Therapeutics, Polytherics and Stabilitech are three good examples of doing what entrepreneur-led businesses do well – adapt. These companies have all continued growing and their success at least in part has been due to their foresight in accessing non-dilutive capital from charity, EU or US government source, respectively. Leveraging such funding has always been a major, yet hardly talked about, activity in successful clusters on the east and west coasts of the US.
Strategic use of such funding streams, ensuring the relationships do not detract from the company’s primary focus is an effective means to create value and these companies have done that. Companies such as Chroma Therapeutics and Absynth Biologics have continued in the relatively more traditional ‘deal making with big pharma mould’ to further their value with GSK and MorphoSys, respectively.
Pharma venture funds are continuing to fund successful pharma spin-outs such as Convergence and great technology plays such as Bicycle Therapeutics, bringing a much needed longer-term approach to private company financing.
At the top of the scale, we have seen Shire post remarkable results in 2010, breaking through the $3 billion mark for the first time with increased sales from their products for ADHD and rare diseases, demonstrating that a global market can be achieved from the UK.
UK biotech from now on
There is no doubt the sector faces a very challenging environment, yet the underlying strengths of the sector in research, clinical practice, entrepreneurialism and financial management have not decreased.
New business models are emerging that are more collaborative in the earlier stages.
These collaborations are often aimed at lowering the capital requirement to create value, even if this means sharing the benefits later.
Collaborations announced between AstraZeneca and MRC Technology for example, to open up the pharma compound libraries bode well for translational research in the UK.
Greater collaboration and a global outlook will be key to UK biotech success and through its relationships with the premier life science clusters of the US.
Looking further forward, the demands on the UK biotech sector will remain as they always have been to ensure continued success: deliver healthy returns to investors.
It just may be the set of investors has shifted irreversibly from venture capital fund to NGOs, corporate venture funds and patient demand.
One Nucleus: A not-for-profit, membership organisation, One Nucleus has more than 450 members include pharmaceutical, biotech, medical device and diagnostic companies and associated technical and commercial service providers.
One Nucleus has a good relationship with, for example, BioNow, Nexxus and indeed the national trade associations including ABHI, BIA, CCRA and GAMBICA. We undertake activities only if there is a clear benefit for our members who are from far and wide – including a growing number based overseas.
One Nucleus is sponsored by MedImmune, as Corporate Patron, and Corporate Sponsors Barclays Corporate, Deloitte, London First, Taylor Wessing, UCB and World Courier. For more information visit: www.onenucleus.com
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