Two years ago, a McKinsey & Company report hailed the UK as Europe’s leading biotech hub. In recent months, however, funding has dried up for the start-ups that are responsible for many of the industry’s greatest innovations, and we need action now to get investment flowing again.
Start-ups are essential to the drug discovery ecosystem because they do much of the initial research and development that is eventually acquired by big pharmaceuticals companies when it begins to show real results. They are at the very heart of UK pharma innovation.
There are several possible reasons for the malaise in the sector, including the general economic conditions and the UK’s long-standing difficulty when it comes to translating academic research into commercial products. And of course, there’s our post-Brexit withdrawal from the £81bn Horizon Europe initiative. Whatever the cause, we have begun to see a flow of talent from the UK to European companies.
Biotech professionals are looking abroad
In recent years the UK has led Europe in the number of companies developing advanced therapies and immunotherapies, and in focusing on challenging therapeutic areas, such as oncology and the central nervous system. But companies from Germany, Switzerland and Denmark have lately begun approaching professionals and snapping up UK expertise.
A worrying number are being tempted away because of a lack of UK opportunities. We are seeing many start-ups unable to get off the ground and a lot of projects being abandoned. The rates that contractors are being offered have fallen and many are now looking further afield for work.
Some of these experts are already overseas working on essential drug discovery projects in other countries and many others, in less lab-based or engineering roles, are working remotely in the UK for European companies.
And while some critical talent is currently moving abroad, many in the existing UK workforce are nearing retirement age. The UK’s universities have so far struggled to turn out graduates with the biotech skills needed to replace those who are leaving. So, while we remain a global leader, a lack of funding and the drain on talent presents a real threat.
More patents are needed
The UK is home to several biotech hubs, such as the Golden Triangle of London, Oxford and Cambridge, as well as Bristol and Stevenage, and we have one of the world’s most significant biotech workforces with a wide range of skills to offer.
In 2020, at the height of the pandemic, UK biotech companies raised £2.8 billion in funding and among larger companies share prices shot up by an average of 32%, surpassing those in Europe (22%) and the US (2%), and only trailing China’s 99%.
The following year the McKinsey & Company report, The UK biotech sector, the path to global leadership, proclaimed: “The United Kingdom leads Europe in discovery research and life-science start-up funding.” But since then, the flow of investment has slowed to a trickle.
It’s a worrying turnaround for a country with a reputation for scientific excellence. The UK produces 29% of European Scientific journal publications and ranks fourth on the Global Innovation Index. McKinsey pointed out that the UK lagged behind other countries in the number of patents granted between 2015 and 2020.
While in China, 72 patents were granted per 1,000 publications and in Switzerland 70 were granted, the UK only granted eight patents per thousand publications. The McKinsey report said, “A critical first step in maintaining a strong UK biotech pipeline is ensuring that discoveries are patented” and this is certainly an area where we should be focusing our efforts.
Streamlining processes
I’m certainly optimistic that the sector will shake off its malaise, not least because of the UK’s decision to rejoin the Horizon Europe project, which is, after all, the world’s largest scientific collaboration.
Horizon will be a huge shot in the arm for biotech start-ups but if UK biotech is to remain a world leader it must also forge ahead with its digital transformation. Greater use of technology, and in particular, artificial intelligence can streamline the way things are done but this has been hampered by strict regulation in the sector, which remains a long way behind more tech-enabled industries such as automotive.
But the pandemic shone a light on the long approval processes for drugs and many larger companies are currently improving processes to cut the time between research, approval and delivery of therapies.
Big Tech companies such as Amazon, Microsoft, Apple, and Alphabet (Google’s parent company) are also making moves into the pharmaceutical industry, thanks to the explosion in healthcare data and use cases for AI. They plan to streamline drug discovery, clinical trials, manufacturing and supply chain, remote patient monitoring and health records.
As I’ve said, I’m optimistic. The UK’s biotech sector is one of the best in the world but we must reverse the flow of talent that is currently leaving the country for better opportunities elsewhere. Rejoining Horizon will certainly help but we must get to grips with a range of other issues too, from the streamlining of processes to the rapid patenting and approval of new therapies – if we don’t, you can be sure that others will.
About the author
Ruby Horsfall
Ruby is a Recruitment Consultant based in Real Staffing's Leeds office. She focuses on the pharma and biotech sector and specialises in connecting highly sought-after contractors with dynamic employers across the life science sector.
