The UK biotech sector was out in force last week in San Francisco for a week of key healthcare investor conferences, including the JP Morgan Annual Healthcare Conference and the Biotech Showcase. Sector headlines have been dominated by the vast number of announcements made over the last week, setting expectations of what’s to come in 2015. Biotech is flying high, with strong stock performance, an active M&A market and a sense that small companies are more than ever driving innovation in the industry. There’s a strong consensus that the bullishness will continue into 2015 and beyond.
Following my update last Monday, Liverpool-based BIA member, RedX Pharma, announced their intention to float on AIM – great news for the sector and hopefully the first of many UK life science IPOs in 2015. Combined with last week’s big trade deals – Biogen Idec buying Cambridge-based Convergence, and Shire (originating from the UK and also listed here) making its biggest ever acquisition in US company, NPS Pharmaceuticals – there’s plenty of buzz around the UK biotech ecosystem. This was further demonstrated over the weekend, as new data reported in the Sunday Telegraph revealed that venture capital backing for UK life science companies rose 41% last year to £527 million. Europe is still seen as an under-valued and under-capitalised market, but there is universal recognition that Europe has high-quality science and companies and represents a great opportunity for the future.
There was plenty of discussion around reimbursement. The example of the Gilead/AbbVie HCV drugs shows that delivering highly efficacious and safe therapies can command high prices. The hottest area in biotech continues to be gene and cell therapy, promising transformational efficacy in cancers and rare genetic diseases. There is an emerging debate about how these one-time treatments will be priced to capture long-term benefit.
Big pharma and big biotech were very much in evidence at the conference, with large partnering teams engaging with potential small company partners. The JP Morgan ‘fringe’ is still the most compelling partnering event of the biotechnology calendar.
Last Wednesday the Royal Society hosted the annual CaSE (Campaign for Science and Engineering) debate between the science spokespeople for the three main political parties – the Conservatives’ Universities and Science Minister Greg Clark, Liberal Democrat Cambridge MP Julian Huppert, and Labour’s Shadow Minister for Universities, Science and Skills, Liam Byrne. The policy debate provided an opportunity for the MPs to demonstrate their commitment to the sector, and covered questions on topics including investment, diversity, immigration rules and education. Greg Clark stood by the government’s recent Science and Innovation Strategy and stated that ‘the future of our country depends on science succeeding’. Liam Byrne and Julian Huppert meanwhile argued for change; Byrne emphasised that now is the time to strengthen rather than question the UK’s relationship with Europe and Huppert called for reform of immigration policy amongst steps to develop and retain a highly skilled workforce. Read more on our blog and feel free to feed in your thoughts.
In other news, and a key win for the BIA, the government has launched a consultation on improving the accessibility of R&D tax credits for small companies. This was originally announced as part of the Autumn Statement towards the end of last year, and is something the BIA has been calling for on behalf of our members. The consultation will focus on the four main areas that drive claims to the relief: awareness; design; understanding; and administration. You can find out more about the consultation here. The BIA will be submitting a response, so if you would like to get involved please contact Pamela Learmonth by the end of January.