Following on from his account on Tuesday of BioMoti’s experience with the Biomedical Catalyst, here CEO Davidson Ateh relays his personal thoughts on how the scheme could be re-targeted to specifically support early-stage companies.
It is no secret that finance is not easy to come by in early stage biotech. Yet I am of the view that biotech is the most appropriate vehicle to transition new discoveries from the university to large pharma. I believe we need to face reality and acknowledge that significant government funding is required for a vibrant early stage biotech sector. ‘The Entrepreneurial State’, by Mariana Mazzucato, elegantly showcases that the state is at the root of most innovations in society, providing capital at the earliest and riskiest stages. We need to be bolder in advocating for formal government support so that a scheme like the Biomedical Catalyst comes to be viewed as a permanent funding fixture for early biotech albeit with the requirement for matched risk capital to ensure genuine commercial need; a public-private hybrid approach that safeguards initial government investment into the science base. Multiplying early stage ideas leaving university will increase failures but ultimately underpin a sustainable and mature UK biotech industry with more ideas de-risked. I think the Biomedical Catalyst’s yearly budget should be increased 10-fold and relaunched with major changes:
- Exclusively for early (preclinical) stage biotechs yet to raise significant investment
I feel that early stage companies like BioMoti stand little chance competing against extensive data packs from our excellent clinical stage biotechs who have already raised £20 million in risk capital or are GSK spinouts. Ironically, the grant funding is in fact required for us to develop to that level. Otherwise, the grant is simply a ‘nice to have’ for the elite and does not bring in genuinely new investment or grow a diversity of opportunities. It could be argued that if this does not change, early companies should be dissuaded from applying.
- The major awards committee’s role and composition should be revised
In our experience we have seen a major awards committee dominated by leading academics and career pharma expert types with little experience of new capital-efficient virtual models of biotech. I suggest that successful early stage entrepreneurs, investors and relevant clinicians ought to dominate, in order to avoid the committee resembling a typical risk-adverse panel where awards are made to sure bets (see first point above).
The MAC currently overrules the full stage review, and make up their mind based on a 30-minute interview, so a good score like ours may count for little. Instead, the panel should only test the odd case of a dishonest or clueless team; by the time you reach that stage of the competition, the effort is such that a much higher success rate should occur. The emphasis should be on a strong post-award monitoring schedule, whereby projects that do not deliver on milestones without remediation, are pulled, ensuring sanctity of public funds.
- There should be a low value feasibility award linked to a higher value award
There is currently no link between receiving a low value Biomedical Catalyst feasibility award (up to £150,000), how that project progressed, and, your chances of receiving a higher value follow-on award (up to £2.4 million). I suggest a revised Biomedical Catalyst should require all projects to start from the feasibility point and – subject to performance – be eligible for a single larger award per company that enables them to de-risk their lead asset at early clinical trials. Companies should be able to independently raise further investment by that stage without recourse to more public funds.
I cannot help but be optimistic as an entrepreneur and there are already signs the industry is entering a new era with a handful of great stories emerging. I believe that, if we nurture our earliest and most vulnerable companies, the whole UK community will benefit from a diversified and increasingly sustainable biotech ecosystem. The larger investors and players will have to restrain themselves from the natural desire to take all now but will no doubt be rewarded for their patience by a diverse abundance of future quality opportunities. There may be a case for government intervention at later stages of development but that should be away from the Biomedical Catalyst, in a for profit growth fund for example.
I have been extremely impressed by the attitude of the medicines and healthcare team at Innovate UK, who are very open to new ideas and are engaging deeply with the UK biotech community to ensure the Ipsos MORI review collects all opinions and informs the right solution. I would strongly encourage you to participate.
These are Davidson’s own suggestions; we’d love to know what you think – contact the BIA policy team.