When Britain produced a Covid-19 vaccine that saved millions of lives, it showed the nation was a world leader in life sciences, according to Chancellor of the Exchequer Jeremy Hunt.
(Bloomberg) — When Britain produced a Covid-19 vaccine that saved millions of lives, it showed the nation was a world leader in life sciences, according to Chancellor of the Exchequer Jeremy Hunt.
Delivering his 2023 budget to Parliament on Wednesday, Hunt boasted that the UK attracted more inward investment into life sciences than anywhere in Europe last year. He also announced plans to speed up access to the newest drugs and revealed tax credits for research and development.
But less than three years after its breakthrough on the Covid-19 shot, critics say that Britain is still far away from its ambition of becoming a global science and technology superpower by 2030, capable of attracting the best talent while bringing novel drugs and technologies to the market quickly.
“We got a big lift from Covid because it enshrined the importance of life sciences for the country,” said John Bell, regius professor of medicine at the University of Oxford and a long-standing adviser to the UK government, in an interview. However, when it comes to the commercial environment the UK is trailing badly.
“We’re so far back in the pack we can’t even see the pack,” said Bell.
Post-Brexit, experts say Britain is struggling to stay competitive with falling access to scientific research funding and talent from overseas. Cautious investors are limiting commercialization prospects, while the UK’s National Health Service is still reeling from the havoc wreaked by the pandemic.
Lacking Talent
Researchers are less interested in studying in the UK today than in the past, according to Manchester-based physicist and Nobel Prize winner Andre Geim. Some PhD students believe their living standards will decline as result of higher costs and lower salaries in Britain.
“They can’t sustain the same quality of life in the UK,” Geim said in an interview. “It’s pathetic.”
Years of stagnant investment in research and development is also affecting the search for talent. An independent review found that domestic R&D funded by the UK government was just 0.46% of gross domestic product, ranking it 27th out of the 36 OECD nations. South Korea, Germany and the US all spend considerably more on R&D, according to a review carried out by Paul Nurse, a Nobel Prize winner and director of the Francis Crick Institute, a biomedical research center.
British scientists are also waiting to see how Prime Minister Rishi Sunak’s recent deal with the European Union will restore access to the bloc’s multibillion euro Horizon research program.
“The UK will find it extremely difficult to be an effective research power if it stands alone and is not part of the European research network,” Nurse said.
Hunt said the UK was still the best place in Europe for businesses to invest and grow, particularly for smaller “research-intensive” companies that can potentially claim a new R&D credit worth £27 for every £100 they spend. This means an eligible cancer drug firm spending £2 million on R&D will receive over £500,000 to help develop breakthrough treatments, he said.
This decision “is a shot in the arm” to oncology startups, said Tony Hickson, chief business officer for Cancer Research UK and Cancer Research Horizons.
Capital Needed
Securing investment for research is one thing, but Britain also needs the right infrastructure to help bring new drugs and treatments to market. This is particularly important for the country’s startup sector where access to capital can dictate where a new product is commercialized.
“There hasn’t been a culture in the UK to build something to last,” said Mark Kotter, founder and chief executive officer of synthetic biology company Bit.bio. This means many early-stage British companies usually end up turning to the US, the global juggernaut of life sciences innovation.
“I do see a lot of young startup CEOs who actually want to build something that lasts and not flip, but the investors also need to raise their game,” Kotter said.
Pension funds in the UK, which could be a deep source of capital, have generally steered clear of early-stage companies. The Department for Work and Pensions in January unveiled proposals to make it easier for pension funds to invest in startups.
“The reality is that the investment appetite from the public market investors has not been fantastic, especially within therapeutics,” said Maina Bhaman, partner at Sofinnova Partners Capital Strategy. “I think it will require quite a concerted effort to create that.”
UK-listed startup success stories are also fairly few and far between. DNA-sequencing company Oxford Nanopore Technologies Plc had one of the best-ever debuts with a £3.4 billion flotation on the London Stock Exchange in 2021. Since then biotech firm Abcam Plc, once the biggest company on the London Stock Exchange’s junior market, delisted from there in December though it continues to trade on Nasdaq. Technology giant Arm Ltd. has decided against listing in London to focus solely on New York later this year. Drug developer Immunocore Holdings Plc also skipped London and went straight to Nasdaq when it went public in 2021.
Big Opportunity
GSK Plc welcomed Hunt’s proposals Wednesday, particularly his move to accelerate regulatory approvals for new drugs, and said Britain still had a big opportunity in life sciences. Archrival AstraZeneca Plc said the budget was a “step in the right direction” but warned that the government still needs to resolve the issue of levies on innovative medicines used by the NHS.
Read More: Britain’s Health Watchdog to Speed Up Drug Approvals
For Geim not all is lost. He says the current government is pragmatic, adding that if ministers finally start looking at how to increase long-term investment in UK science “it would be a great thing.”
–With assistance from Sabah Meddings and Eamon Akil Farhat.
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