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European Biopharmaceutical Review

Strategy for UK Life Sciences

The Government’s recent Strategy for UK Life Sciences initiative offers solutions that hope to address funding difficulties for SME biotechs, and foster further R&D in the UK. Ensuring these policies are fully implemented will be key to the industry’s continued success, and could be further aided by adopting Citizen Innovation Funds and broader strategies for technology transfer.

2011 was a landmark year for the life sciences sector in the UK. Not only did the Government take signifi cant action to help secure the future of the sector, but there was also intensive corporate activity.

In December, the Prime Minister David Cameron launched the Government’s Strategy for UK Life Sciences. This is the first time that the UK has had such a strategy that sets out a long-term plan, which could provide the foundation for a successful and sustainable future for the bioscience sector in the UK. Additionally, throughout 2011, there was positive activity from companies in the sector, including strong exits, a continued flow of venture capital into the sector, new companies being founded and products being approved.

The Strategy for UK Life Sciences is the result of a continued engagement with Government by companies in the life sciences sector through their trade associations. The Government’s strategy includes measures to improve the funding environment for companies, as well as to ensure that innovative medicines reach the patients that need them as soon as possible. There are a number of measures that are of particular signifi cance to small and medium-sized enterprises (SMEs), and the effective implementation of these policies will form an important piece of work for trade associations and advocacy groups in the coming year.

Funding Foundations

The Government plans to invest £180 million over the next three years in a Biomedical Catalyst Fund, which will be jointly managed by the Medical Research Council and the Technology Strategy Board. The fund will nurture innovative technologies from the academic and commercial sectors through to companies with products or technology platforms in order to attract private equity. Over the last three years, several reports have pointed to the fact that early-stage companies struggle to find funding in their early phases of research to develop their products and bridge the so called ‘valley of death’ (1). If the new Biomedical Catalyst Fund is to help companies to access much needed funding to prove their technology and attract private finance, it must be offered in a company friendly way with rolling open calls, which are not too prescriptive, to maximise the potential benefits of the fund.

The Government also announced that early in 2012 the Medicines and Healthcare products Regulatory Agency (MHRA) will bring forward for consultation proposals for an ‘early access scheme’. The scheme would typically be available for drugs prior to authorisation but at the end of Phase 3 trials. However, where supported by suitable evidence of patient benefi t and safety, the scheme could be extended to drugs at an earlier stage of development. Products that are eligible for the scheme will be determined by a specific opinion that: the likely clinical benefits outweigh the risks identified to date where there is a high unmet clinical need; NHS funding for products must be cost-effective; and the UK economy should benefit from the scheme.

It will be important for this early access scheme to be focused on the right point of development – that is, Phase 2 – to ensure its relevance to bioscience SMEs. If this can be achieved, this policy could be incredibly helpful to bioscience companies developing novel medicines in the UK by reducing the clinical development timelines and de-risking investment. Additionally, the introduction of an early access scheme will provide an extra incentive to fund projects in the UK if there is the potential for early reimbursement.

Forging Connections Between the NHS and Clinical Trials

The Government decreed it would create a vital role for the NHS in supporting patients who wish to be involved in clinical research. It has long been recognised that the NHS provides a valuable resource to the UK and that the streamlined and wellregulated use of patient records could significantly benefit medical research in a number of ways. Plans to further examine this area were announced by the Government in its plan for growth; this should be welcomed as it holds the potential to greatly improve the attractiveness of the UK as a location for conducting clinical trials and development activity.

For small companies undertaking vital biomedical research, being able to access the information that allows researchers to develop medicines more rapidly will be a massive boost for the sector and ultimately for the patients themselves. It will allow medicines to be better targeted, available more quickly and will allow long term medical trends to be identified more accurately. Patient recruitment in trials is also likely to be positively affected. It is essential that patient confidentiality will be preserved through the system, and it is understood that patients will have a choice whether or not to participate in research. Patients support research within the NHS and a recent pilot project by the Health Research Support Service that will form the basis of the new patient record service demonstrated significant patient enthusiasm and a willingness to be involved in the process.

During 2012 the Government is expected to include its previously announced Patent Box legislation in its Finance Bill. The Patent Box will allow companies to elect to apply a 10 per cent rate of corporation tax from 1 April 2013 to all profits attributable to qualifying intellectual property (IP). This is a welcome move by the Government to expand the scope of the patent box criteria rules so more income can fall within the 10 per cent corporation tax rate, so that the benefits will apply further up the development pipeline.

Further Action Needed There is more to be done and it is important to highlight issues of concern to the Government and make new proposals to help ensure that companies in the bioscience sector can thrive. Two areas that are of particular concern are the flow of finance and IP into the sector. The main priority is to ensure that companies in the sector are sufficiently financed. One proposal is that the Government introduce Citizens Innovation Funds (CIFs). The CIFs would be a UK version of the French Fonds Comunes de Placements dans l’Innovation (FCPI) scheme. They would be a tax-free retail investment product allowing up to £15,000 per person per year to be invested in funds which are exclusively targeted at innovative SMEs.

In France the FCPI scheme has been hugely successful. Since the launch in 1997, a total of €5.5 billion has been raised by over 300 FCPI funds run by nearly 40 asset management companies. These funds have invested in more than 1,000 companies.

CIFs would provide finance for innovative companies by: offering a simple vehicle for the general public to invest modest amounts in high growth, innovative sectors, tapping into philanthropic investments currently only open to the very wealthy; supporting small, privately owned companies; helping the UK start more new innovative SMEs to exploit the discoveries coming from the world class research base; and providing the public with a greater understanding of the needs and risks of research intensive industries. The introduction of a CIF scheme in the UK would make the Government an enabler, rather than a provider, of much-needed investment in this sector.

Fostering Technology Transfer

Another area of importance is technology transfer from universities to industry. Life science and biotech companies have indicated that a key barrier to increasing the commercialisation of innovation is the structure that facilitates the flow of IP from its initial development in universities to an environment where it can be commercially exploited and turned into marketable products. The Government could provide strategic help by improving the way technology transfer takes place in the UK. While there are significant good practices, the current system of technology transfer offices represents in some cases an inharmonious and fragmented environment for collaboration between universities and industry.

One proposal for consideration is to create a centralised portal, which would signpost assets for industry and investors looking for new technologies and patents, to help catalogue assets and make IP more easily available to potential industrial partners. Some Technology Transfer Officers in the UK are using a model like this. Government should examine the technology transfer landscape in order to unleash the flow of IP between industry and universities. This would help ensure that the UK remains a world leader in the commercialisation of research.

While the Government’s Life Sciences Strategy, and the large number of actions it contains within it, is welcome, there is a considerable amount of work to do to ensure the successful implementation of these policies so that companies in the bioscience sector can benefit. Trade associations and advocacy groups will play a key role in making SMEs’ voices heard. We have had considerable success in our engagement with Government over the years and should continue to work constructively with Government to ensure that it delivers the best possible environment for innovative bioscience companies to succeed and prosper.

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Glyn Edwards is Interim Chief Executive of the BioIndustry Association. Glyn was previously Chief Executive Officer of Antisoma from 1998 to 2011. Prior to joining Antisoma he worked in a variety of business development roles in the biotech and healthcare industries. He was also a member of the BIA Board. Glyn has a BSc in Biochemistry from Bristol University and an MSc in Economics from the London Business School.

Glyn Edwards
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