UK biotech thriving – so don’t cut funding, government told

The UK government has been warned that any decision to cut funding support for the biotech sector could halt its growth.

A new report confirms that 2014 was the best year to date for investment in the UK bioscience sector, underpinned by government support in early-stage life sciences R&D, with the UK far outstripping other European nations in terms of funds raised.

The UK BioIndustry Association (BIA) and consultants EY have jointly produced the report, and say the government-funded Biomedical Catalyst (BMC) has played a crucial role in filling a structural gap in early-stage funding.

However the government announces its spending review statement on 25 November and must make further public spending cuts to meet deficit-reduction targets. Biotech leaders are urging Chancellor George Osborne to maintain support for the sector, or else undermine its growth.

Without this government-funded infrastructure, they say, private investment – which has boomed in the last year or so – could also drop off.

Building the Third Global Cluster: State of the Nation 2015 confirms that the UK now represents nearly a third (31 per cent) of all innovation capital raised in Europe. This year’s report also shows that the historical characteristic of ‘drip feed’ private financing is no longer holding back the UK industry, with larger round sizes for venture capital investments and US-like commitment to the most promising technologies.

“The UK bioscience ecosystem is thriving; we have a strong and supportive fiscal environment, with new patient capital pools and open public markets, we produce investable science and have effective translation capability,” said Steve Bates, Chief Executive Officer of the BIA.

Bates added that this strong base gave the UK the potential to build the ‘third global cluster’ – the first two being in the US, in New England (with Cambridge and Boston in Massachusetts being the epicentre) and the San Francisco Bay Area.

The San Diego area, just down the Pacific Coast Highway from San Francisco, raised about the same amount of capital as the UK in 2014, but the British biotech leaders believe they can overtake the region.

Steve Bates stated that the UK can only stay competitive with continued government help, saying, “Any decision by the Chancellor to cut government support to proven innovation policy measures, such as the Biomedical Catalyst, could halt economic growth in UK bioscience and, more importantly, prevent it creating wide-ranging health benefits and solutions to some of the key challenges of our time.”

Ian Oliver, Executive Director of Assurance at EY commented: “The level of activity we have seen in 2013/14 is unlikely to grow indefinitely, however new records have been set this year with Immunocore’s raising of £205 million becoming the largest European private round in history, demonstrating new levels of confidence in UK science. The nurturing of early-stage companies is still critical to the overall biotech ecosystem, allowing promising companies to reach critical mass and garner venture investment at these new levels.”

The report was launched today at the BIA’s UK Bioscience Forum, part of European Biotech week, which showcases 10 themes for change in the sector. Speakers include Life Sciences Minister George Freeman MP, Innovate UK Chief Executive Ruth McKernan and author of the Catapult Review Herman Hauser.

Recent weeks have also seen concerns among the US biotech sector that market valuations for listed companies have become over-inflated – with fears that this ‘bubble’ could burst. Many leading US biotech stocks took a hit in a recent scare, but have now recovered, while UK firms have been less affected.

Download the report: Building the third global cluster: State of the Nation 2015

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