How the UK can compete with the US in biotech: Focus on the tech
In May, the UK Life Sciences Council, a biannual meeting between ministers and global life sciences industry leaders, met to discuss the sector’s economic potential and how to tackle the recent decline in investment. The main points of discussion centred around Lord James O’Shaughnessy’s independent review of clinical trials, as well as Dame Angela McLean’s review of the life sciences regulatory system in the UK, and it was later announced that the government will be investing £650 million in funding life sciences research.
Against this background, pharmaphorum connected with two leaders driving UK biotech forwards – Bob Burke, UK-based EMEA general manager at biotech cloud platform Benchling, and Jason Foster, CEO of cell and gene therapy company Ori Biotech – and discussed in detail how the UK can compete with the US in biotech, if it focuses on tech.
After all, the UK has all the right ingredients to be a biotech leader: world-class talent, legacy pharma players, and access to early-stage funding. The government’s commitment of £650 million for investment into speeding up clinical trials, freeing up lab space, and improving connections between life sciences hubs are steps in the right direction. Still, a true 21st century mindset is needed to take science forward into the future.
The importance of tech foundations and expanding access to personalised medicine
Before Benchling, Burke spent almost 10 years as a global head of IT for a vaccine-focused biotech in the San Francisco Bay Area, then spent a period with Okta, a cloud-based identity and access management solution.
“I come into this conversation as someone who's passionate about technology,” Burke explained. “Whilst I'm not a scientist, [I] have spent […] enough time in this industry to be won over by the power of working for an organisation that feels like it's really contributing something positive to the world, and that's a very meaningful way to wake up and go about your day.”
“I'm on the other side of the spectrum from Bob,” Foster said. “I've spent 25 years in pharma and life sciences and building businesses in that area. That's what brought me to the UK in 2010. I've been working in the UK life sciences ecosystem for 13 years, after spending about the same amount of time in the US. I think the notion of being able to make a big impact through life sciences is… [Well,] right now I work in cell and gene therapy, and in cell therapy it's an incredible new modality where we have personalised living medicines that often offer curative potential for cancer and rare diseases.”
“The big problem that we're trying to solve is. ‘How do we get these to patients?’,” Foster explained. “Ultimately, we currently have cures for cancer that patients can't get access to, really. Only 2% of the patients that could benefit can do so. That's obviously an unacceptable outcome, and then the reason why myself and my colleagues get up out of bed every morning to try and solve this problem. I think it also ties nicely into the question of the day, which is, ‘How does the UK really capitalise on some of these trends and really build our leadership and expertise in this area?’ Because it's a very different market, both commercially and scientifically, than the US.”
The US versus the UK: The need for investment
It’s clear that a tech-enabled scientific infrastructure needs to be built first: science is constantly evolving, and today is more tech-focused than ever. Such a tech-enabled infrastructure is critical for R&D, enabling acceleration of time to market, and driving innovation and collaboration more effectively.
“When you think about world-class universities, like Oxford and Cambridge, and you think about big pharma with, obviously, the likes of GSK and AstraZeneca, and a really healthy ecosystem of young start-up biotechs often coming out of those university systems – I think the UK is generating more biotech start-ups every year than any other country in Europe,” Burke said.
“I think that the core ingredients are there, which has made the UK a global player in this space for decades,” he continued. “I think the challenge is […] if you look over the last 10 years, we can see that the level of investment that's been coming out of the UK has dropped by somewhere on the order of 20%, and that's across both public and private investment.”
“Where it was once was really a shining example of a country that was leading at the forefront globally, it's slipping,” Burke explained. “That's the problem; it’s that it's falling behind. How do we, especially now in this post-COVID world, drive forward greater innovation in the UK? I think that's the concern from all parties.”
Foster, in agreement with Burke’s premise, highlighted a couple of points of distinction that separate the two countries at opposite sides of the Atlantic.
“I think the UK starts out on an equal footing per capita, certainly to the US,” Foster said. “I think we generate lots of interesting science. We generate lots of talented people that are going to potentially have leadership roles. The early-stage funding is there, [but] I would argue there are two points of distinction […] one, tech transfer in the UK is extremely difficult.”
“TTO offices, universities, generally, take a different approach than US universities,” he explained. “They try and take quite a large equity share of these businesses, which often causes them to struggle after they spin out of universities. That's been a major topic of discussion in the tech bio and life sciences ecosystem, early-stage ecosystem, and fighting with tech transfer offices to make sure that the business is investable when it comes out of universities.”
“That's something that we could do quite easily, mirroring what universities like MIT or Stanford do, something like 10% to 15% ownership for the university is pretty standard,” he continued. “In the UK, you see as high as 80% ownership by the university. That's an anomaly, but I think it is that stark of a contrast.”
The second issue is a struggle with later-phase growth funding.
“I think programmes like EIS,SEIAS, and Innovate UK grants really do a great job at funding those very early spin-outs, that first round of funding that a company needs to get off the ground,” Foster said. “Where we struggle is [...] growth funding: $100 million series As are quite common for therapeutics companies in the US, but they're much, much harder to come by in the UK.”
“Growth funding, the funding that takes them from the clinic into a commercial path, or takes us to take them to market, is very hard to come by in the UK and Europe in general,” he continued. “I think there are parts of the funding ecosystem and pathway that are better supported than others. Again, that's a relatively easy thing to fix, but it's a question of risk tolerance. It's a question of expectations.”
And other challenges, of course, include reimbursement and manufacturing issues.
“There are more and more […] products that aren't making the leap into Europe because they can't get appropriately funded to make them available,” Foster explained. “Patients in Europe don't get the benefits of these incredible therapies […] Actually, eight out of the 24 approved gene therapies have been withdrawn from Europe for commercial reasons, not for clinical reasons. They were approved clinically as being effective, but couldn't make the numbers work.”
Following the money, querying economic models
When asked to comment on the intentions put forward by the government and the UK Life Sciences Council, there was a hesitancy from both Burke and Foster, stemming from a feeling of having been in the same situation before – and yet, positivity remained.
“There are reasons to be optimistic that Government is really behind these messages and the intentions of what they're trying to drive in the market,” Burke said. “I think there's hope, as well, that, when government organisations make significant investments in a space, private money will follow that as well, that that will be an indicator that there will be opportunity for investors, with that secure feeling that Government is backing much of this.”
“I think the proof will be in the pudding and we'll need to see if Government really puts their money where their mouth is,” he continued. “These are intentional statements and, of course, sometimes they're not always followed through on.”
Foster, meanwhile, noted that other countries have pledged similar support for the industry, including France.
“We're in a competition, we're in a race for talent, we're in a race for how we cultivate the next generation of businesses,” Foster explained. “£650 million is a lot – it's a great start – but I think there’s a whole kind of alignment of incentives and policies that need to be put into place.”
“It’s giving with one hand and taking away with the other, which doesn’t really help for start-ups,” he said. “The other thing I would suggest is an opportunity, which is a lesson coming out of COVID, that one of the things we’re trying to prevent is the brain drain of companies leaving the UK and going to the US for market opportunities and, usually, for liquidity.”
“If companies are going to list, certainly in biotech, they’re going to list on Nasdaq 99% of the time, and if we want to keep and retain those companies, we need to make the UK an attractive commercial market for these companies to launch their products,” Foster continued. “The NHS is an incredibly hard customer for a lot of these businesses, and the NICE reimbursement process, the levels of reimbursement, and the level of capital available to be spent on the newest drug innovations – it's just really not there.”
“The problem with the way we do it today is that the company has to spend $1 billion or $2 billion,” he said. “Then, they have to come over to the reimbursement authority saying, ‘Will you please reimburse our product?’ They'll say, ‘No.’ They'll say, ‘We want to charge a hundred,’ and they'll say, ‘No, you have to charge 50.’ They'll say, ‘Well, we can't afford 50,’ then there's back and forth and we'll say, ‘Okay, well, it's just too hard. We'll go to the US.’ The US funds 90% of the pharma spend in the world.”
Accessing 21st century science, utilising (advanced) tech
To work with such technologies as the cloud, AI, and machine learning, UK biotech organisations must also get their data strategy and tech foundations in place. Furthermore, embedding tech leadership from day one is crucial – rather than waiting until a business is of a size >50 and then diving into technical hires, the better option is to get tech talent on board from the outset, creating through leadership a tech culture compatible with a science culture.
“Historically, there’s been a real lack of technology investment across the life sciences industry, and you can quite easily understand why. When you're an early-stage business and you've got limited capital and you're trying to figure out where best to put it, it often goes into people and human resources, and then whatever tools and space you need to start to develop your technology,” Burke explained. “But it's often not in things like systems, and even senior technology leaders inside of those organisations to chart out a strategy.”
“The tech component has often been kind of an afterthought that gets wedged in,” he continued. “Historically, you've got people that are walking around laboratories with pens and paper, or, best case, maybe a USB drive that they're saving some documents on. What that's created over time is an environment where the biotech and the pharma world [have] gotten a huge amount of data. I mean, by most measurements, [by] 2025, the life sciences industry will have the world's largest data set bar none, but it is incredibly siloed and almost lost, to some extent, in notebooks withering away on people's desks or on these lost little thumb drives somewhere in a desk drawer, or in an email that's been fired off that only two people received.”
Foster, meanwhile, is particularly excited about AI and other advanced technologies available for healthcare.
“What is the purpose of technology?” Foster queried. “The purpose of technology is to make [HCPs] more efficient, to help them be able to treat more patients more effectively in shorter times, with a more efficient delivery system. Those are the basics.”
“Can we get records off paper?” he continued. “Can we get tools that help manage patients at home or help patients self-diagnose and then triage to the lowest cost avenue for treatment? That, for me, is the importance of tech. Every other industry has moved from analogue to digital, except for healthcare.”
“Healthcare is still languishing in this kind of weird middle ground where we're sort of digitised, but not really, and it's all not very well connected,” Foster said. “If we put investment there, you wouldn't need another 250,000 healthcare workers. You might only need 100,000 or 150,000 or whatever, and you might have some more budget to pay doctors more.”
Technology first, harnessing the power of biology
From a behaviour shift and mindset change, to implementing the basics at a foundational level in order to fully benefit from today’s available technology – Ori Biotech itself is a UK-based tech-first biotech, supporting other such companies with a similar directional motion. The company is leading with technology and applying that to biology: applying the disciplines of software, hardware, data science, and engineering, and attempting to harness the power of biology and cellular medicines.
“We have built a manufacturing platform that allows us to make living personalised medicines, this new generation of cell and gene therapies, more efficiently, much less expensively, and therefore [potentially] much more widely available for patients,” Foster explained. “These products, on average, cost somewhere between $500,000 to $4 million each. We can understand how it's very difficult for them to be first-line therapy. We want to make them much less expensive.”
And how does the work of Benchling, a cloud-based platform for biotech R&D, sit alongside that?
“Benchling's vision is to unlock the power of biotechnology,” Burke explained. “We have a purely native cloud-based platform that is designed to solve the challenges that we [have been] speaking about, around the management and collection, the de-siloing of data, if you will, across scientific organisations, which then unlocks the ability to collaborate and drive improved time to market, time to milestone, and time to value for life sciences organisations.”
“The interesting thing is that, as there's been a shift in the science of biotechnology in particular, with heavy emphasis on the bio over the last 20 or 30 years, the revolution of going from small molecule chemistry-based, let's say, medicines development to what we're seeing today, which is a stronger approach to biologics, which we believe has the ability to unlock even greater solutions and everything that Ori Biotech is about – is focused in cell and gene therapy, is all about unlocking that new modality, if you will; our software is purely designed for those sorts of businesses,” he said.
A positive, tech- and investment-directed future life sciences vision
Overall, Burke believes that there is much to be optimistic about.
“If we can bring the right level of investment in technology to the focus of how we're trying to solve things like cancer or issues of climate change – or there are lots of different applications here in terms of how we produce our food, how we scale; lots of different sorts of markets that apply into the ag space, as well. It’s very compelling,” Burke noted.
“The point is there are a lot of big challenges that the world is facing and trying to solve,” he continued. “If we can harness this collaboration, this partnership between technology and science, there are real reasons to give people a sense that these are problems that we actually have the ability to address if we just bring the right emphasis.”
“I've heard a lot of policy statements and a lot of positive intent,” Foster added. “I think the time for half measures is over. Let's go all in […] Doing it halfway and doing everything a little bit hasn't really proven to be an effective strategy.”
“We're competing with the US, with other European countries who have the same ambition, and doing it as a halfway won't succeed,” he concluded. “We've got some critical problems in healthcare and healthcare delivery in the UK. We have the opportunity to fix it, but now's the time.”
Image by Tung Nguyen from Pixabay.