How the UK’s Life Sciences can drive recovery

In recent months an important and interesting debate has started to take shape in Westminster around some key questions. How broken is the UK economic model? Can we build a sustainable recovery on the same sectors (Finance, Housing, Retail) which led to our over-reliance on debt? What are the products and services that the rest of the world will pay the UK to make and sell around the world in the next phase of global development? Where is the UK’s global usp in the markets of tomorrow? What is the appropriate role of Government in shaping and supporting growth? What is the right balance between deregulation and pro-active intervention? Do we want Government to do less or more? How can we turn the Government and public sector from being a non-productive distributor of wealth to being a catalyst for innovation, enterprise, and productivity?

This debate has started to take shape in Wesminster in the last few months, and not along predictable lines. Whilst New Labour figures like Peter Mandelson continue to defend the importance of wealth creation and an enterprise economy, meanwhile, and surprisingly to some, a new generation of ‘New Tories’ is urging radical thinking about what needs to be done to build a sustainable recovery, suggesting that the challenges of the debt crisis and globalisation demand a much more pro-active strategic vision from HMG of ‘economic reconstruction’, with Government actively identifying some key sectors in which the UK has the potential to provide products and services to the fast emerging world. In effect a ‘Business Plan’ for Britain – a vision for how we’re going to trade our way of the debt crisis brought on by a double decade debt-fuelled boom of consumerism.

This is isn’t about an “Industrial Strategy” to pick winners in some return of 1970s comparison. It’s about identifying sectors and technologies which can drive Britain’s recovery as a trading nation. I believe the UK ‘Life Science’ sector is one such sector with the potential to play a major part in helping the UK achieve a sustainable recovery. Applying our growing scientific understanding of the bio-chemical systems which underpin life to the major challenges facing human society (principally Food, Energy, Medicine)  the UK’s ‘Life Sciences’ are a potential ‘platform technology’ for the UK to  develop a myriad of new business opportunities.

Newly elected after a 15 year career in bioscience venturing, last year I was invited by the Prime Minister to help the Government think about how it could unlock this potential in our medical life sciences. Appointed Govnt Life Science Adviser in June 2011 I spent the second half of last year working closely with Ministers, officials and industry leaders on a deep think about what Government could and should be doing.

In December the Prime Minister launched the Government’s new UK Life Science Strategy to unlock the full value of the UK’s medical life science sector.  It sets out a 10-year vision of where the Government sees the UK sector’s real strengths based on understanding the structural pressures transforming the bio-pharma and healthcare sectors, a hard headed assessment of where the UK NHS and public sector is holding back the sector, and where the UK has real global usp’s. The strategy sets out a commitment to an ‘integrated healthcare economy’ in which the NHS and public sector has a clear responsbility to support a burdgeoning free-enterprise healthcare sector and new entrants developing new technologies, products and services.

The UK’s Life Science sector generates over £50 billion in turnover a year, accounts for 165,000 jobs and 4000 companies from GSK to a myriad of start-ups. At a time when we badly need sustainable growth, I believe our Life Science sector provides an unmissable opportunity for UK plc. Seismic changes in the pharmaceutical sector are changing the way medicines are discovered and developed.  Britain in recent years has started to lose its traditional advantage. The Prime Minister’s speech set out a real strategy prepared by the Department of Health, BIS and the Office of Life Sciences under David Willetts’ leadership to link together academic research,  NHS clinicians and industry to promote closer research collaboration in order to speed up the process of bringing innovation to commercialisation. Properly implemented the benefits will be felt by patients, businesses, Universities, the NHS, and Her Majesty’s Government alike.

We all know that the traditional ‘big pharma’ model of medicines discovery and development isn’t working. Over the last two decades the Pharma industry has seen big falls in the rate of new drugs discovered, despite huge increases in its spend on research. The time and costs of drug development are too high – c 15 years and £1billion to develop a new drug isn’t sustainable. At the same time, the more we know about diseases and genetics the more we discover that ‘one size fits all’ blockbuster medicines will work well for some but badly, not at all, or with unacceptable side effects for others. Across global biomedicine there is a concensus that we need to better inform medicines discovery by reference to the information we have on how and why different patient groups respond differently. Where it’s done best, real ‘Translational Medicine’ isn’t about one way lateral ‘bench to bedside’ ‘translation’; its about a two way, iterative process of collaborative biomedical discovery and development re-centred on patients, in which industry and academia and clinical disciplines work together to share insights and strengths on the clinical utility of biomedical discoveries much earlier in the process than has hitherto been the case.

We need this kind of collaboration not only to maintain the UKs position at the cutting edge of the medical research industry and to encourage investment, but also to respond quicker to the rise in drug demand created by the growing epidemics of western lifestyle diseases such as cancer, dementia and diabetes. These are diseases which will affect most of us at some point in our lives, and most exciting from the recent announcements will be the real benefits for NHS patients.

Much has been made in the press of the implications of this approach in terms of ‘sharing’ patient data, as if it represents some kind of breech of privacy. But the truth is that this isn’t about individual data being used without consent, it’s about large scale data sets of anonymous information already sitting in the NHS, being available for the NHS to use in research, subject to a patient’s right to opt out. Hundreds of thousands of patients are already happily consenting to their data being used in this way, especially in cancer research. ln this way patients can contribute to the global fight against disease, earlier access to innovative treatments and the opportunity to take part in clinical trials. We can finally stop the stories of cancer patients forced to fly overseas to take part in potentially life-saving trials and open up access to more innovative treatments here in the UK.

It is a method of research already being pioneered successfully by charities such as Cancer Research UK which currently has 42,000 patients per year, making up one in every six, involved in research. For some diseases like dementia, no single company is ever going to make the breakthrough we need. We need new collaborations such as that between The South London and Maudsley NHS Foundation Trust in collaboration with Kings College London which is developing a research hub to gather together 180,000 anonymised records, MRI scans and drug histories to help them understand current dementia treatments and drive new treatments. For the first time we are able to look at what happens to people with dementia over time before and after treatment.

With an integrated healthcare system, this type of ‘translational medicine’ is something the UK is uniquely well suited to leading the world in. Few places in the world can match our combination of world class University science, research hospitals, ethical framework and industry links. We want to make it easier for these kinds of innovations to be developed so that the UK can become again the world leading centre of biomedical research so patients can begin to access the benefits, and this involves helping the industry with measures such as the new £180 million Catalyst Fund, a streamlined regulatory framework to enable quicker entry to the market for new discoveries, and a whole range of reforms to make it easier for industry, universities and hospitals to work together on clinical research.

A truly integrated healthcare economy is a long way off.  But the vision and goal of a healthcare economy in which the private and public sectors support each other’s – very different – aims, is a radical one. I believe its one that our troubled times demand. I don’t believe we will tackle the crisis of productivity in our public health system without drawing on the leadership, innovation and technologies of a vibrant private sector and seeking to promote similar virtues in the public sector. And I don’t believe we will be able to maintain the full value of the UK Medical Life Science sector without an NHS which is more open to working with and helping the private sector develop and test its innovations.

I believe that this sort of deep thinking about how Government and Industry can work better together to support each other is key to a genuinely sustainable recovery for UK plc.

Written by George Freeman MP, Government Adviser on Life Sciences, May 2012

The One Nucleus blog is written by individuals and is not necessarily a reflection of the views held by One Nucleus.

Changing the Game for Tech Transfer Offices

Generating knowledge and transferring it to the world has been, and remains, the core mission of research universities across the globe. Daniel Nadis looks at how tech transfer offices can become more effective in this mission.

Since the Bayh-Dole Act, the ‘knowledge transfer’ mindset has been assailed with chronic doubts, and may be facing unanswerable questions. ‘Publish or perish’ does not sit easily with revenue maximisation, especially in the science and technology sphere. Inside the technology transfer unit, patent prosecution, licence/spin-off negotiations, and collaborative research deals compete for time and attention. Few technology transfer organisations (TTOs) are in a position to be self-funding from transaction revenues, but with dependence on the university for cash comes head count limitations and other operational constraints, especially in difficult economic times.

Does this litany sound familiar? Laments such as these have been told and retold, but no quick fix or sustainable solution seems possible. In the lab, when every direction seems to be a dead end, researchers seek an entirely new paradigm: to address the fundamental challenges of sharing knowledge, while making money from protecting value, all in the context of difficult economic circumstances. What might such a paradigm be?

What if one views the TTO not as a small piece of a university culture, but as a small piece of a commercial marketplace? Today, the TTO operates as a tiny element of a not-for-profit-organisation, whose motivations rarely intersect across the entire range of university endeavour. In most cases, university revenues from technology commercialisation are less than 1 percent of total annual budgetary requirements. Indeed, revenues from selling branded mugs and sweatshirts may actually exceed tech transfer income. From a commercial perspective, such a unit would look like a child’s lemonade stand across the street from an 80-storey office tower. To survive and flourish, the TTO’s primary interactions need to be horizontal—across TTOs, across geographic markets, across technologies—and not simply vertical within the university. Looked at from this perspective, TTOs can radically change workloads associated with generating revenue while collaborating to create more valuable transactions.

As standalone businesses, most TTOs today would have unacceptably high risks:

• Sole source supply chain (university IP) Every other business works hard to avoid this situation—they fear being bought by their supplier, being unable to work with competitive suppliers, or being limited from sales because of their unique identification. Ultimately, of course, the sole source supplier can also effectively shut them down for reasons unrelated to their own imperatives.

• Lack of human resources flexibility Suppose a gold-plated opportunity to triple revenue came along? With a strong story, getting more people would be a no-brainer in the business world. In TTO-land however, the university, as shareholder, rarely supports additional resources for such one-shot opportunities and the deal disappears.

• Poor visibility: suppliers Which TTO can see even half of the possible ‘wares’ of its supplier? What TTO knows far enough in advance of coming ‘products’ so as to create a profit-maximising ‘auction’ environment? How can a proactive TTO look for necessary complementary IP in its own portfolio among the myriad academic silos maintained by hyper-specialised researchers?

• Poorer visibility: customers The most difficult challenge of all is finding the profit-maximising customer for the technology that does surface. There are no universally agreed valuation methodologies, few exact ‘comparables’ at such an early stage, and little idea of what exactly a potential buyer wants to buy, and how much that buyer may be prepared to pay.

Let’s now look at this as a horizontally organised industry. The greatest challenge—figuring out how to be a ‘for profit’ business among academics—becomes the greatest advantage because a pure return on investment-driven metric is not required. Instead, TTOs can demonstrate all of the other traditional success metrics, including revenue generation, by sharing resources with their competitors and customers as is done everywhere else.

In a horizontal model, resources are shared on an ad hoc basis among an entire network of people in a common operational context, on a shared but secure platform. Better information is available to more people, and at a faster pace. Transaction values are improved as customer needs are better understood. Commercial evaluation is speeded by access to a range of ‘on-stream’ experts, and collaborative research contracts can be concluded more rapidly among pools of researchers.

So much for the fantasy. How about the reality? The remarkable fact is that all of the tools currently used in the industry to create this horizontal model have been in use for a number of years. For-profit businesses know that information movement, transparency, and expertise-sharing are the sine qua non of increased productivity and increased profit. Can these techniques be applied in the tech transfer world as well?

With the coming of age of cloud computing, a number of companies have created ‘virtual’ marketplaces. Supply chain managers have adopted these techniques to link raw materials to finished goods to retailers. Google and Amazon have clouds for information storage and sharing. This level of pure information-sharing is well advanced. Sharing data in this way, however, doesn’t add the truly critical resource —human decision-making—to the process. What the tech transfer world needs is ‘Collaboration 2.0’: the virtual business created in a market space by all participants. For tech transfer, what might this world look like?

• TTOs will operate as standalone businesses for their university shareholders, much as they do today. Accordingly, participants in the horizontal ‘virtual’ organisation must remain able to run their own businesses in their own way.

• In a dense mix of peers, productivity gains will be easy to spot and crucial to maintain. Legacy data management platforms, specifically designed for technology transfer, are not the same as business management software. In today’s world, data are entered once, are instantly available to any team member, and can be manipulated by anyone without needing an IT or finance expert’s assistance. If the TTO is not operating in this manner, it is missing the single largest tool in delivering its key performance indicators while gaining net resources (people time) for further success.

• Intelligent collaboration platforms deliver more than just a huge pile of unmanageable data. They will:

• Allow each participant to order information in a meaningful way;

• Exchange information with different people applying different levels of security/confidentiality simultaneously;

• Create ad hoc, ‘deal-specific’ groupings, assembled (and disassembled) in minutes; and

• Allow stakeholders direct access to data they require without distracting the business.

Using this Collaboration 2.0 paradigm, all of the key TTO metrics can be harmonised with shareholder (university) drivers.

• Knowledge transfer is maximised, whether for reputation, revenue, or the ‘greater good’.

• More packages of IP are assessed faster, more accurately, and more consistently, for protection or publication.

• Collaborating market participants—whether inside or outside the particular TTO—add their value without significant time cost.

• TTO activities are transparent to their shareholders, reducing paperwork and demonstrating value.

• No IT involvement is required, no new hardware or software is purchased, and every member of the university knowledge transfer community is connected with one click.

Using a horizontal market and Collaboration 2.0 paradigm, TTOs can shift from overworked and underappreciated academics to self-directed, successful participants in the burgeoning marketplace of knowledge transfer. The Association of University Technology Managers (AUTM) Global Technology Platform is a step in the right direction. More broadly, inexpensive software meeting these challenges is now available. Just look out, not up—your peers are there waiting for you.

Written by Daniel Nadis, CEO and Founder, Occams Resources, April 2012

nadis@dircon.co.uk

www.occamsresources.com

The One Nucleus blog is written by individuals and is not necessarily a reflection of the views held by One Nucleus.

Life’s a Journey, Pain is Temporary, but Failure is Forever

We were delighted that Sir Christopher Evans, often described as the ‘founding father’ of the Cambridge biotech cluster, opened Bench to Boardroom this month.

He had (as you would expect) bags of enthusiasm, motivation and drive and he left the auditorium gasping with his insights and revelations about what it takes to get ‘From Bench to Billions’.

Here are his key themes:

The UK Life Science industry

Some of the British science base, I think we have some brilliant basic science and brilliant ideas coming through, but there is so little money in the science base. If I hear about anyone thinking of cutting the science base or restricting its budget, I get depressed and think, “Jesus, now is the time when we should really step up the investment in British science because it’s this science that leads to enterprise, enterprise to small businesses, small businesses to the growth of the economy, jobs, revenues, profits, cash, value and excitement.

But whilst Britain has got some fabulous basic science and brilliant breakthrough ideas, they are not making it into new spin outs and start ups because they can’t as there isn’t the cash to back them.  Also there is a real dearth of management, really good smart entrepreneurial management. And actually we don’t have the American flair, that’s always been an issue for us for exploiting those British scientific ideas.

The British life science industry is thwarted by lack of financial investment with a slow regulatory process which is impeding its development. If you are doing clinical developmental work rather than research (the research is fine, we are quite good at regulating research), when you start clinically developing something serious from that research, you run into a new raft of regulations.

Britain is slow at interpreting these regulations, we are just too slow. We get in the way of exploiting the novel things and it costs money to be held up all the time. So all these new companies, year after year they spend spend spend, and then waiting, waiting, waiting for some mandarin or some do-gooders who think they know it all to make the wrong decision.  They don’t always listen to logic or see the bigger picture.

The UK versus the USA

When asked about comparisons between opportunities in the United States and Britain, Sir Christopher explained “At the moment when they create young companies,  and I often get shown the very young companies, they are far more advanced, the young companies have got a lot more stuff in them, the scientific proofs of principle have gone through a lot more phases than in the UK labs by the time they are offered to you, and that’s why a lot more venture capitalists keep piling in to the American companies while they are not considering the British companies. It seems to me that the Americans have far more cash in the university system, well they have, we know that for a fact. They have learned to take things secretly and quietly a lot further in the laboratory and then bang, they create ‘Go-faster Inc’, and they show it, it’s very impressive to investors looking for real evidence of a breakthrough.

The Right Team

The key attributes for an entrepreneur, according to Sir Christopher, are intuition, commercial sense, opportunism, risk taking, persuasiveness and leadership – all skills and characteristics which you cannot teach, but are inherent.

Sir Christopher’s advice is to ignore glossy CVs when considering your Management Team. Employ energy, intelligence and enthusiasm, that’s something I have learned, not people with great CVs, who may have a fantastic background but are boring dullards. If they are smart, they can do anything, if they are energetic, they will do anything, if they are enthusiastic, they set fire to everything and everyone around them, and that is what makes things exciting in a business.

The next Big Challenge

He concluded “I’m always looking for a  big challenge, I always tell people you need a bit of vision. I have to have some for myself and I have set myself a big vision for this year, a huge project which I am not going to tell you about – maybe next year if it is successful. I’m really going for it, I have to raise a huge amount of money to back up a huge array of research projects all at the same time and try and take this entire machine forward. I will apply all my rules best I can, assuming I can raise all of the cash, which is the biggest amount of cash that I or anyone like me has ever raised for a start-up but I am going for it. I’ve built companies worth £10m, £100m and £1bn but never built anything for ten billion, and very few people in the biotech world have actually, and nobody in Britain has ever built a biotech company from nothing to ten billion; for me that’s a pretty big challenge!

Who’s the Rising Star?

When asked to name a “rising star” company in Cambridge, Sir Christopher’s answer was Abcam. The most exciting company, the  best business that I am not involved in is Abcam, a fantastic company it will go on to be worth billions. It is run by smart people and that is a business I would loved to have set up with them. I think they could grow that into a very, very big, a very profitable company. That is my number one business around here.

This article has been produced by Ellee Seymour (of Ellee Seymour ProActive PR) with the expressed permission of Professor Sir Christopher Evans

elleeseymour.com

The One Nucleus blog is written by individuals and is not necessarily a reflection of the views held by One Nucleus.

The NHS – Virgin Territory?

This is the title of the workshop which I will be presenting on behalf of Global Regulatory Services (GRS) at the One Nucleus Bench-to-Boardroom event on 6^th  March 2012.  I did toy with the title of “Opportunities in the ‘New Look’ NHS – Part 2” as a follow on from last year’s roundtable discussion.  If you were there, you’d know why!  To clarify: it was oversubscribed, caused much heated debate (so much so that I hardly got past page one of the hand-out) and ran over time.  In fact, it could have taken up the whole day very easily!

The lesson I took away from this experience is that the NHS touches everyone in a very personal and emotive way.  Somewhat naively I had assumed that commercial personnel would have a more objective view point.   I was soon proved very wrong and I realised that it is impossible to divorce personal feelings and experiences of the NHS from the business side of things.  The NHS is an integral part of our lives, whether we like it or not.

So you may be wondering why I’m having another go.  On reflection, I realised that just because the NHS is a sensitive subject it shouldn’t be avoided.  It should be openly discussed and not end up being another one of those Victorian taboos.  For Bench-to-Boardroom 2012, however, my focus will be on research within the NHS.  Time and time again, I have spoken to people who have no idea about the possibility or mechanisms for conducting studies within the NHS, particularly in Primary Care.  Hence the title for the workshop “The NHS – Virgin Territory?”  The workshop will provide some background information as well as case studies to demonstrate how the private sector can work with the public sector.

At Global Regulatory Services (GRS) we aim to be thought provoking.  We love to facilitate discussion and debate.  Why?  Because from this, people get a deeper understanding of the issue in question (and of each other) and the bonus is that often you get the greatest ideas and solutions.  After all, we must never forget that what we are doing in our industry is going to have an impact on people’s lives whether they be a patient, carer, family member or a friend.  The NHS is here, it is undergoing massive change so now is the time to grab the opportunity to get involved and make a difference.

It’ll be great to see a few friendly faces at this workshop.  Hopefully, this time, I’ll get beyond page one!

Written by Greer Deal, Director, Global Regulatory Services, February 2012

www.globalregulatoryservices.com

The One Nucleus blog is written by individuals and is not necessarily a reflection of the views held by One Nucleus.

What is the Future for Drug Discovery in the UK?

The pharmaceutical industry has made important contributions to quality of life, longevity, economic growth and education at all levels, and is a key component of the government’s growth strategy.  However, the industry is now under considerable pressure as the number of NCEs has not increased over the past decade, and there have been significant revenue losses as important drugs lost patent protection. Consequently, the sector has experienced major reductions in R&D budgets, closure of research sites and the loss of thousands of skilled jobs. A new and sustainable funding model with public sector participation is urgently required for world class UK scientists to invent and develop innovative medicines that meet the medical needs of the 21^st Century, and contribute to economic growth. This perspective considers how these objectives might be achieved, and aims to stimulate discussion.

First, we should build a consensus of expert stakeholders with the common objective of informing and influencing future development of world class healthcare innovation in the UK. Learned societies and professional bodies have obviously contributed to the recent life sciences review, but we now need to work together to ensure proper focus on drug discovery. The government has stated a firm commitment to life sciences as a catalyst for growth, but emphasis appears to be on clinical trials, biologics and cell therapies rather than on cost effective and orally delivered small molecules that are the bedrock of any healthcare system.

Second, future R&D should focus on therapeutic areas of significant medical need where transformative new drugs will improve quality of life, and bring economic benefit. For example, a recent survey showed that 38% of Europeans suffered from mental disorders with depression being the single greatest burden of all human diseases. Brain disorders cost Europe almost Eur800bn per year which is more than cancer, cardiovascular and diabetes combined, and yet Pharma is withdrawing from neuroscience research. To encourage investment in such challenging areas, it will be important to define efficacy/safety criteria early in drug discovery programmes so that effective new agents can expect fair reimbursement and an acceptable return. This would minimise negative regulatory decisions currently taken after at least 10 years investment in discovery and development, and would have a positive impact on costs.

Third, we must address attrition as current failure rates during discovery and development are driving escalating R&D costs that are simply unsustainable. One approach would be to expand pre-competitive collaborations between industry/academia to focus on target selection/validation, predictive toxicology and to identify patient sub-groups that respond to agents with novel mechanisms of action. These initiatives would reduce risk, simplify clinical trails and lower costs which would make the sector more attractive for investment, and would also deter parallel and wasteful pursuit of non-validated targets. Companies would create IP through innovative, but distinctive, medicinal chemistry programmes.

Fourth, as Pharma contracts in the UK and Biotech struggles for new investment we must consider new models of drug discovery that capitalise on our outstanding record of innovation and productivity. A network of Therapeutic Centres of Excellence should be established where expert medicinal chemists released by industry can work within multidisciplinary environments to exploit innovative biology emerging from significant investments in UK biomedical research. Unused assets from Pharma could be included, and a flow of spin-outs would revitalise the biotech sector. Education and training of next generations of research scientists would also be delivered, and new jobs created.

Fifth, experienced industrial scientists should be also embedded in world class biomedical centres by creating new chairs in medicinal chemistry since chemists play a pivotal role in transforming biological discoveries into innovative new medicines. There is also a pressing need to invest in fundamental new chemistries to address challenging biological targets such as protein/protein and protein/nucleotide interactions that are currently beyond traditional drug templates. It is important to realise that the majority of medicinal chemistry “muscle” was located in Pharma and the significant expertise recently released should be re-captured within Therapeutic Centres of Excellence, or similar initiatives. If world class Pharma/Biotech talent is allowed to fade away, it will be extremely difficult to re-build quality in the future.

Finally, any new funding model may require reallocation of current budgets rather than new monies considering current deficit constraints. Encouragingly, the EU has recently announced “Horizon 2020” where investment of Eur80bn in R&D is aimed to improve long term competitiveness, and Eur8bn has been ring fenced for health care, which is considered to be a “major concern” Public private partnerships involving universities, research centres, and industry will play a key role, and Therapeutic Centres of Excellence make a natural and synergistic fit. Government, Funding Councils and Charities should now invest for future growth, as economic benefits will largely depend on a strong UK drug discovery capability that invents new medicines for world wide commercialisation. Lack of investment in translational medicinal chemistry will see UK biology discoveries exploited by the rest of the world which would be inconsistent with the government’s commitment to life sciences, and would be a major economic loss.

The positive benefits of such exciting initiatives would include:- UK discoveries would help meet the healthcare challenges of the 21^st Century; quality of life would be improved within constrained healthcare budgets; important diseases areas abandoned by Pharma would receive proper attention with consequent patient benefits; assets not being pursued by Pharma would be revived and developed; economic benefits would flow as UK innovations enter world markets; the UK science base would be strengthened with exciting career opportunities for world class scientists to reap the benefits of our internationally competitive science education; new biology emerging from UK laboratories would be expertly exploited by world class medicinal chemists; the biotech sector would be revitalised as an additional source of innovation/discovery with a sustainable return on investment.

Written by Simon Campbell, Kingsdown, December 2011

The One Nucleus blog is written by individuals and is not necessarily a reflection of the views held by One Nucleus.

Medicines research in the UK: the need for a bold, imaginative and long-term strategy

The primary objective of the pharmaceutical industry is to deliver long lasting benefits to both patients and the wider public. The industry is made up of large (Big Pharma), medium (Biopharma) and small (Biotech) companies. In the UK, the sector makes a positive contribution to our trade balance, generates and maintains high value jobs, and makes a significant contribution to public health. This country has a long history of successful medicines research that has made a significant impact on both global health and local wealth. Thus, 25 of the current 100 top selling drugs were discovered and developed here and in 2007 pharmaceutical exports totalled over £14.6 billion.  However, since then, the fortunes of this sector in the UK have tumbled.

Major divestment has led to the loss of thousands of jobs with the closure of major research facilities, including those at Harlow (both GlaxoSmithKline and Merck), Loughborough (AstraZeneca), Newhouse (Merck) and Sandwich (Pfizer). This is in response to the stark economic realities of the 21^st century.

Big Pharma is no longer delivering double digit growth. According to a recent study by Deloitte and Thomson Reuters, the average internal rate of return from R & D at the world’s 12 largest Big Pharmas has dropped from 11.8% to 8.4% over the past year. A major contributing factor is the expiration of patents for numerous blockbuster drugs. On top of this, the ensuing emergence of generic medicines has raised the cost/benefit bar for subsequent drug candidates.

Alongside problems at Big Pharma, there has been a near complete market failure in the Biotech sector, with the flow of finance to emerging Biotech companies reduced to a trickle. This is largely because investors (particularly venture capital companies) are no longer realising handsome returns on their investments. This, together with the substantial loss of the market capitalisation of a number of the UK’s major Biotech companies, has undermined confidence in the sector. However, these dark clouds may have a silver lining as the corporate venture arms of Big Pharma have now moved into this space.

In the past, the Biotech model was to make shares liquid by listing on public markets. However, this door is now firmly closed so a trade sale has become the major exit strategy. The notable exception is drug discovery companies that have a revenue stream through the provision of contract research services.

In spite of current challenges, the fundamentals of the medicines research sector remain good: the Global market for pharmaceuticals is expected to increase to $1 trillion in 2014.  Growth is expected to continue as medical need increases, largely because of the marked increase in the number of people aged over 65 in the decades ahead and the continued rise in the incidence of obesity.  Although the number of biologic drugs continues to rise, most medicines are small molecules.

The process of small molecule drug discovery depends on a unique partnership between chemistry and biology, which serves to optimise the pharmacological properties of lead molecules in order to identify drug candidates. It is on the basis of the synthesis of optimised new molecular entities (NMEs) that patent applications are filed, which, if granted, provide a period of market exclusivity. Thus, without the generation of NMEs, the potential for subsequent commercialisation diminishes substantially.

With drug discovery research moving offshore (Big Pharma) or being starved of cash (Biotech), this sector of the UK economy is now under serious threat as world-class knowledge and expertise is lost.

Large amounts of government capital have rightly funded University-led research, but very few  university spin-outs that have gone on to become substantial commercial enterprises; Oxford BioMedica is one of the rare examples. It may be more fruitful to provide direct funding to Biotech companies engaged in medicines research through competitive grants; the Technology Strategy Board provides a good example of this approach. However, the fragmented nature of research funding in this country stifles (rather than supports) innovative medicines research. On top of this, the public sector contribution to health-related research in the UK is dwarfed by that of the US National Institutes of Health (NIH), which has an annual budget of $30 billion. The US is also very good at funding and coordinating public and private research, and bringing together scientific knowledge through the creation of centres of excellence. In short, the US excels in directing taxpayers dollars towards medical need.

Many of the beneficial aspects of health-related research in the US are now being employed in the emerging economies. For example, China recently announced very ambitious plans to generate a million new Biotech jobs by the end of 2015, supported by $308 billion of hard cash for science and technology. This bold commitment to science is even underpinned at school level: In the latest OECD comparative review of 15 year olds around the Globe. China-Shanghai came top in maths (the UK came 28^th), with similar results for science. Therefore, the UK is off the World pace and so needs to sharpen up if it is to continue to compete effectively in the medicines research arena.

It is essential that taxpayer’s money effectively supports innovation in medicines research and facilitates its translation into new medicines or novel medical devices. The same is true for medical research charities. However, the UK lags behind the USA in this area also.

The US has many charities and foundations that make a significant impact on human health by directly supporting medicines research. Notable examples include the Bill and Melinda Gates Foundation, the Michael J. Fox Foundation for Parkinson’s Research and the Huntington’s disease Society of America. In the UK, medical charities account for one third of all public expenditure on medical and health research. However, the majority of these charities exclude medicines research companies from applying for funding. This questions the ability and intent of such charities to meet their charitable objectives. They are rejecting the very organisations with the know-how and expertise to translate research into tangible benefits to patients. Important exceptions are the Wellcome Trust, Medical Research Council Technologies and Cancer Research Technology. These World-leading organisations illustrate what can be achieved outside of traditional pharmaceutical business constructs, particularly in early stage translation.

To counter the erosion of medicines research in the UK, a bold, long-term strategy is urgently needed. An important start has been made with Government support of the Francis Crick Institute in London, and funding of science parks, particularly the Stevenage Bioscience Catalyst (in association with GSK) and the Babraham Research Campus. In addition, this week the Government launched its Life Sciences Strategy, which includes a £180 million BioMedical Catalyst Fund. This is very welcome, but it may not be sufficient.  What is needed is a vision for how medicines research in the UK can be re-energised and re-imagined.

Change brings opportunity and so there is now a great opening for the creation of new business constructs to combine bioscience knowledge creation and medicines discovery for the benefit of patients, healthcare providers and scientists.

Written by Alan M. Palmer

The One Nucleus blog is written by individuals and is not necessarily a reflection of the views held by One Nucleus.

London or San Francisco?

The economies of California and the UK are similar, the university networks can also be compared, why then does California boast the most successful Biotechnology companies and the UK no significant success?

San Francisco

Tuesday Day weather

Sunny Intervals

28°C 82°F Max. Day

Westerly4mph 6km/h

37% 1013mb Very good

It is not all about the weather, baseball or cricket, Shiraz or Fuller’s Best…Driving up Sandhill Road from Palo Alto to the freeway I-280 one notices HP and Lawyers but also many venture capital offices, built to service the ideas coming from Stanford and the Biotech community from Palo Alto to Downtown San Francisco.

London

Thursday Day weather

Heavy Rain Shower

17°C 63°F Max. Day

West South Westerly6mph 10km/h

78% 1009mb Moderate

Sadly the M4 corridor does not have the same concentration of venture finance.

Interestingly, the Biotech community in the Bay area does not just form around Stanford, but also around UCSF and around the existing biotech “superpowers”; Genentech, Biogen-Idec etc.   In short there is a community established and successful in the Bay area, there is not in London.

This means that the development of biotech in the Bay area is supported by experienced investors, management and scientists; over time experience from the likes of Amgen gets ploughed into Biotechs of a new generation – this is not true in London, largely because any successful UK start up is quickly converted into cash through a trade sale rather than developing as a company.  While it is possible for each of the interest groups to blame the other – Universities to bemoan the lack of finance; investors to moan about the lack of experienced management and management the lack of support,  this is not helpful, we need to be joined in an effort to establish the London area as a powerhouse of biotechnology.  In the London area I include Oxford and Cambridge.  We need that level of critical mass to ensure the ideas and the finance come together with a supportive environment, with facilities being key to help move ideas fast from conception to delivery into the hands of doctors for the benefit of patients.

Go in the opposite direction from Palo Alto to highway 101 one notices many areas where laboratory space and facilities are available to rent at rents less than 10% of the cost in the London area.  The community extends to developers and facility providers, giving the scientific concepts support in the most practical way.  Driving out of London on the A13 we see Canary Wharf and shopping centres and further out Dagenham, but where are those cheap and efficient developments to provide the core base?

Biotechnology provides more than 250,000 jobs in the Californian economy, a rough figure for the UK would be 20% of that.  Yet we have the skill base and we have the financial base to do better.  Each job for a skilled biotechnology worker is estimated to create almost two jobs in the less skilled parts of the local ecomomy.

Let us see a focus on the triangle between London, Oxford and Cambridge, real determination to support companies with high growth potential and a determination to see a little more sunshine in an industry with tremendous growth prospects.

Written by Keith Powell

The One Nucleus blog is written by individuals and is not necessarily a reflection of the views held by One Nucleus.