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.

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About onenucleus

The One Nucleus blog is written by individuals and is not necessarily a reflection of the views held by One Nucleus.
This entry was posted in November 2011. Bookmark the permalink.

One Response to London or San Francisco?

  1. Lots of interesting points here.

    In the end, though it comes down to people: the finance is available for the right team, with the right idea wherever they are located. Maybe there aren’t enough of the ‘right teams’ in the UK, who have been through a successful cycle and have the experience and capabilities to repeat that success. There are few, of course, (look at Bicycle Therapeutics and Mission Therapeutics, both on a single science park near Cambridge, founded by biotech entrepreneurs who have been there and won the gold medal) – but many less than in California. The Babraham Bioscience Campus (where both these two companies happen to be based) is also an example of facilities providers ‘investing’ in the growth of the sector: they may not be in Dagenham or Canary Wharf, but the kind of facilities Keith rightly wants to see more of certainly do exist.

    I dont agree that the ‘problem’ is compounded because UK biotechs sell out early for cash, whereas US enterprises ‘grow’ into proper businesses. Yes, that expands the SIZE of the US biotech sector, but it diminishes their efficiency measured as return on investment (http://www.tcpinnovations.com/drugbaron/?p=152). Bigger is most definitely not better. As we noted last month, this obsession with size over efficiency is leading to high profile casualties, such as Prospect Venture Partners who failed to raise a new fund to build these bigger biotechs in the US (http://www.tcpinnovations.com/drugbaron/?p=157).

    So I would take a much more positive view of the UK biotech scene: yes, its DIFFERENT from California. Yes, its SMALLER than California. But we definitely should not look to the California model as the only, or the ideal, way to do biotech. There are great teams in the UK. There are great facilities in which to do biotech business in the UK. There is enough capital available to those teams in the UK. Im not saying it wouldn’t be good for there to be MORE lean, successful, capital efficient asset-centric biotechs in the UK – the more the merrier – but certainly I wouldn’t want to us to look enviously at, or copy, the Californian model, where size is everything!

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