The UK Government has just released its ten year UK Life Science Vision to make it a Life Science Superpower post-Brexit. In the foreword to the Vision document, Boris Johnson states:
“We will utilise the full breadth of our regulatory freedoms from Brexit to make the UK the best place in Europe to invest in a life-science business…”.
But is it possible that the UK is still riding the wave of its COVID vaccine taskforce success – can we truly compete with global superpowers in the field of Life Science?
Setting out the Vision
The Government Vision Report highlights seven key Life Science areas in which it wants to see growth:
- Accelerating the pace of studies into novel dementia treatment.
- Enabling early diagnosis and treatment, including immune therapies such as cancer vaccines.
- Sustaining the UK’s position in vaccine discovery, development and manufacturing.
- Treatment and prevention of cardiovascular diseases and its major risk factors, including obesity.
- Reducing mortality and morbidity from the respiratory disease in the UK and globally.
- Addressing the underlying biology of ageing.
- Increasing the understanding of mental health conditions, including work to redefine diseases and develop tools to address them.
The Vision will address each of these points by assigning a taskforce, responsible for the management and success within these areas.
Why haven’t we achieved this vision before now?
The Vision names the US as the UK’s key competitor and highlights the need for increased access to funding by UK Life Science companies. As an example of the gap to be bridged, between 2016 and 2020 US Venture Capital (VC)[EH1] investment for Life Science companies increased from an average £6.8 million to £20.5 million. By contrast, the UK only saw growth from £5.3 million to £8.8 million in the same period. This may mean UK companies are more likely to seek funding from the US with seepage of know-how and talent across the pond. This highlights the nature of the competition faced by the UK.
The Vision also highlights the public funding issues such as the 20-30% higher valuations seen on Nasdaq compared to the London Stock Exchange (LSE).
To reach the intended Superpower status and close the gap on the US, the Government plans to free up around £1 billion in funding for this initiative. 20% will come from the new Life Sciences Investment Program (LSIP) with the other 80% sourced from Mubadala, Abu Dhabi’s Investment Company. Mubadala will work closely with British Patient Capital (BCP) of the British Business Bank to identify the most effective investments in the seven Life Science markets.Additionally, further support will be given to Institutional investors and Pension Funds to invest into the Life Sciences Sector.
The four points where the Government highlights significant collaboration with the Life Science Sector are:
- Establishing a Life Science Scale Up Taskforce.
- Supporting the development of a world leading UK Life Sciences VC ecosystem.
- Successfully launching the £200m Life Sciences Investment Programme (LSIP).
- Strengthening the public markets ecosystem, building on Lord Hill’s UK Listing Review, to support more of the UK’s leading Life Sciences companies to list here.
What this could mean for the Life Science sector – in our opinion.
The commitment of £1 billion spread over seven different areas in the Life Sciences sector is not a lot of money – especially when set against the goal of becoming a Life Sciences Superpower.
In 2018 the business sector was the largest funder of Research and Development (R&D)[EH2] performed in the UK where it funded £20.3 billion (55%) of R&D. Public funding for R&D (government, research councils and the devolved higher education funding councils) was £9.6 billion in 2018, 26% of the total.
Alongside this, the government wishes to increase spending on R&D as a percentage of the UK’s GDP from 1.74% (2019) to 2.4% by 2027. However, this only takes it up to the Organisation for economic Cooperation and Development (OECD) average and behind countries like Germany (3.1%.)
The Government believes its plan shows a clear path to increasing opportunity within this sector for sustainable, long-term growth. Whether or not the UK will become the leading global Life Science Superpower will be determined by the actions of both private and public sectors and as a [EH3] confidence measure it is to be welcomed.
How much of this money makes its way to growth companies in this sector (rather than administration costs) and the difference it makes to them remains to be seen. But every bit helps, and this news will be welcomed broadly by those in the UK Life Science sector, a sector that supports 250,000 jobs and contributes £80bn to the UK economy each year. Not to forget the real-life benefits to patients across the world.
This latest announcement by the Government is a statement of intent to muscle the UK to the forefront of the sector, using the momentum of the COVID-19 pandemic and increased funding to achieve this[EH4] . The increased funding will allow exciting innovation and support those companies for sustainable growth.
Here at Haddletons, we are really excited by what this funding could mean for our R&D clients. We work with many businesses in the Life Science sector, both market leaders and start-ups, and know the profound impact this funding would potentially have on their business growth.
If you are interested to find out more about how Haddletons can help transform your Life Science business, particularly in response to COVID-19, please get in touch today.
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Author: Jacques Haddleton | firstname.lastname@example.org