Friday, January 23, 2009

UK Biotech: Shattered Dreams?

Back in 2003 a government-funded team of experts outlined its vision for UK biotech--one in which the sector occupied a leading place on the global stage, with a strong clinical trial infrastructure, early patient acess to innovative drugs, and all built around a critical mass of companies "in the mould of Amgen".

The dream hasn't come true, to say the least. This much was clear at the launch yesterday in London of a 'renew and refresh' of that original vision--encompassed in a report called Bioscience 2015. Sights are now considerably lower. Instead of building a sector "with a core of large profitable world-class companies", we're now settling, it seems, for "a sector which supports, on a sustainable basis, high value-added employment..." Even the email announcing the event was ominously entitled "Can we save the UK biotech sector?"

It's not difficult to see where this dose of... realism, defeatism, call it what you like... has come from. The UK has lost much of its lead in terms of products in development versus other European countries. Shire moved its headquarters to Ireland for tax reasons, Pfizer and others have shut down UK-based manufacturing, and the UK's stringent application of the European clinical trials directive means the proportion of European products in trials there has fallen from 46% in 2002 to 24% in 2007. Far from Amgen lookalikes, the sector appears to increasingly comprise low market-cap, illiquid companies, many fast running out (or run out) of cash. Biotech now comprises less than 0.2% of the total market capitalization on the London Stock Exchange; investors aren't interested.

Blame the financial crisis? Sure, but the problems pre-date it. And one of the big ones, said Sir David Cooksey, chairman of the Bioscience Innovation and Growth Team which produced the report, is NICE. That 'fourth hurdle' (ever notice how that expression isn't used so much now given how fashionable and inevitable HTA has become?) delays drug usage and creates uncertainty for companies--in particular when decisions are reversed or re-reviewed. And their processes aren't transparent, he argues, calling for an independent enquiry on NICE's impact on medicines uptake in the UK.

NICE would have a lot to say about that; it claims to be among the most transparent of cost-effectiveness bodies in Europe. But, hurdle or not, NICE is here to stay, if anything with ever-growing influence on drug usage (in fact, NICE and Health Technology Assessment in general is probably one area where the UK does have leading global status). And the economic crisis doesn't look as if it will go away soon either. Analyst numbers, already, said some, too low to offer all the UK companies the visibility they need, are dwindling fast.

So what's to be done? Well, many of the ideas in the original and the refreshed report are realistic and achievable. Like rewarding academia-industry collaborations, providing incentives for clinicians to move into research and strengthen the country's R&D base, extending tax credits, and improving NHS IT systems. Others, like the UK taking a lead in bringing together global regulators to adapt their approaches to embrace earlier (eg Phase II) drug access, wider use of biomarkers and simulation technologies (think FDA Critical Path) seem, if noble and sensible, somewhat blue-sky (unfortunately).

Sure, governments can and should help biotech, most usefully via tax breaks, funding for basic research, and appropriate, rather than burdensome, regulation. But they can't replace VCs or investors (remember what the German goverment's BioRegio program didn't do for German biotech). Far more valuable is is what UK entrepreneurs (yes, they exist) can do themselves: seek and find novel funding solutions and new biotech models that can exist and thrive in the tough but now familiar UK climate, just as others are doing elsewhere in Europe. Ideas, anyone?

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