By Mike Cowley
As with the Northern powerhouse in which it is poised to play a key role, the booming life sciences sector in the North of England has need of a strong voice to represent the interests of the increasingly diverse range of companies to be found within the region.
The North today has a formidable line-up of approximately 500 life sciences companies, or 1,000 if you add in the supply chain. Numerically at least this makes it bigger than Cambridge – which has around 300 such companies – and on a par with Oxford and Cambridge combined. It even compares favourably with Basel at 320 and Munich at 370, and is on equal terms with pace-setter Singapore at 500. Only the US is much bigger in terms of life sciences, but even in that comparison the North of England is far from insignificant, be it in terms of size or big name players.
The much-needed voice of the Northern sector on the national and international stage is increasingly seen as being Bionow, the membership organisation that best reflects the rich diversity of the sector and represents a true cross-section of life sciences companies, from start-ups to the well-established corporate high-fliers. Working ever closer with its university sponsors – Durham, Lancaster, Leeds, Liverpool, Manchester, Newcastle and Sunderland – and as a strategic partner in United Life Sciences, the UK-wide body – Bionow has become a key lobbyist in the North. It helps to ensure, for example, investment in what are known as Precision Medical Catapult centres of excellence in both Manchester and Leeds.
Bionow and its partners are eyeing-up the £400 million Northern powerhouse fund as a potential pot for small life sciences businesses in the North. Of this, £50m relates to antimicrobial research, with £4m already allocated to establish an Antimicrobial Resistance Centre of Excellence in Research and Development at Alderley Park in Cheshire.
Bionow has also hosted a series of high profile sector events which have attracted 1,500 delegates from across the region, including the BioCap conference and investor dinner which saw the launch of the £45m Greater Manchester and Cheshire Life Sciences Fund. Also, working through United Life Sciences, Bionow was behind a recent appeal to the Chancellor, George Osborne, which saw 200 signatories to a letter published in the Financial Times, making the UK’s case for helping life sciences companies in the spending review.
Little wonder, then, that Bionow membership has grown to 270, and that the organisation is increasingly regarded as an integral part of the Northern powerhouse initiative. Indeed, this was the message that came out loud and clear from a specially convened Super North Forum on life sciences – itself an event held in association with Bionow – which attracted the largest-ever turnout in the ongoing series of high-profile business platforms for the North.
The Forum saw delegates call on Bionow to further establish itself as the lead voice of the Northern sector, in order to deliver the message of what was happening in life sciences in the region. Typical of these calls was that from Dr Neil Murray, chief executive of multiple award-winning drug development company Redx Pharma.
“It is all about getting the message out,” Dr Murray said. “There are lessons we can learn globally. If you go to Boston, the voice is huge and everyone in the sector buys in and really pushes the message of why you should be doing business with them.
“You’ve got the same for all the big clusters in the US. Here in the UK there is no space in Cambridge anymore, so companies should be looking at the North.” Mr Murray then turned to Dr Geoff Davison, the Bionow chief executive. “I think this is your job,” he said.
The Forum – hosted by Deloitte in its Manchester offices – was chaired by Alasdair Nimmo of Super North, and he had opened proceedings by asking what the sector needed. At this, inevitably, the subject turned to money – or rather the lack of it.
It was Dr Murray who took the lead. “In the UK funding really is the issue,” he said, “in that we don’t have the luxury of the US where they can go and raise £20m or £30m and properly capitalise the business. We have to get away from the mentality that we should be drip-feeding funding into early-stage companies and then being surprised when they fail due to a lack of capital.”
He went on to point out that the idea of giving a company £100,000 to write a business plan in the hope of getting another £500,000 – as happens now – “is something which holds back the sector not just in the North but across the UK”.
Dr Davison agreed that while funding remained the primary issue for small to medium-sized enterprises (SMEs), “it is probably not the bigger companies’ number one requirement”.
Jane Theaker, who represents QIAGEN – a global company with a large facility in Manchester – also saw this as being the case. “The bigger need for the bigger company is science infrastructure,” she said. “The ability to grow a business is reliant on finding excellent staff, and this is often a limiting factor. Then, of course, other sorts of services become important, such as expertise in tax and transport.”
Dr Fiona Marston, chief executive of one of the smaller companies on the panel, Absynth Biologics, noted that the infrastructure requirement was not just limited to the big firms. “These are our issues as well,” she said, “in particular staff recruitment. When you are at an early stage you need good laboratories that actually offer something, and you need reasonable access to equipment, facilities and staff.”
From the North East point of view, Dr Emma Banks of Datatrial said it was the retention of highly skilled people which was the main issue in her region. “Even though we’ve got four amazing universities and we do get incredible graduates, our problem lies in retaining them,” she said. “Keeping people in the North East and not having them head down south is our mission.”
Dr Sam Whitehouse, chief operating officer of the QuantuMDx group, argued that the answer to the skills shortage in the North East lay in a wider recruitment net rather than in hoping to recruit locally. “Bringing people in is a lot easier,” he said.
He also took issue with the claim that there was not enough investment for the sector. “It is very easy to sit here and say there isn’t enough investment available. There needs to be an international focus when it comes to fundraising.”
Paul Maddison of Deloitte also saw financial benefits in looking abroad, particularly when marketing the North to the US. “There are a lot of opportunities around San Francisco, Chicago and Boston,” he told the Forum. “At Deloitte, we are well aware of the potential for attracting investment from the US, especially at the moment with the strong dollar.”
Dr Stephen Little, chief executive of Premaitha Health, then took a contrary view of the traditional areas of funding, stating his preference for tax credits over large injections of capital. “If I was given the choice between an extra £100m or an extra 5 per cent tax credit,” he said, “I’d take the tax every time because I’d know exactly what to do with it.”
It fell to Dr Davison to counter the popular notion that it was easier to raise money in the “golden triangle” of Cambridge, Oxford and London than it was in the North. “I think there is a perception,” he said, “that all those dinners going on down there end up with people going to the Government and getting millions of pounds, but that’s not what people in Cambridge and Oxford tell us – they say it’s the same all over.”
Neil Murray also took up the perception theme. “When people talk about the ‘golden triangle’,” he said, “they regard it as the cradle of life sciences, everything that is good about biotech in the UK. When people talk about biotech in the rest of the UK – apart from certain standout companies – it is in the context of disaster. You are always on the back foot trying to get across the story of the North being an exciting prospect.”
There was agreement from John Nicholson, chairman and chief executive of Gentronix. “If people from the US were going to set up in Europe,” he said, “their initial reaction would be to set up somewhere in the ‘golden triangle’. That’s why it is key to get the message out about what is happening in the North.”
Dr Peter Simpson, director of the N8 Research Partnership, added that if the North wished to be a serious player then “it needs to work together more than Oxford needs to work with Cambridge, because the situation is different. It is about the North having the confidence to do something different.”
The need for collaboration across the North was another theme running through the Forum, although it was tempered by references to continuing problems of “localism”, with competition between Manchester and Liverpool being cited as the prime example.
The only dissenter in terms of the need for collaboration was Dr Little. “I don’t think collaboration counts,” he said. “I simply want a lot of businesses like mine so they can nick me or I can lure their staff. One of the problems is that there just isn’t enough opportunity at the moment to do this.”
Collaboration generally being seen as the way forward brought the discussion back to the need for a strong central voice as a means of letting the world know what is happening in life sciences in the North. The bottomline problem – as reiterated by the panellists – was lack of publicity, as this limited the opportunities to promote the region.
“We need good promotion and good PR,” Fiona Marston said. Addressing Geoff Davison, she added: “and because you represent so many of us, this [Bionow] is a good place to start.”
The last word thus went to the man from the organisation on which the panellists appeared to be pinning many of their hopes. “We manufacture the majority of the UK’s pharmaceutical products,” Dr Davison said. “We’ve got the businesses, we’ve got the big names, and we’ve got a real opportunity.”
‘Completely different’ view of support flow
The controversial issue of the change of approach by the Government agency Innovate UK, previously a primary investment source for leading life sciences companies, became a significant issue during the Forum discussion. The austerity drive has meant that Innovate UK is likely to become a source of loans or “non-grant products”, rather than a grant provider.
“The Government doesn’t really understand the issue of funding round the life sciences sector,” said Dr Emma Banks of Datatrial, “and that’s been highlighted by the fact that they are pushing for Innovate UK to provide loans, not grants.
“This will turn Innovate UK into an investment group and not a body as it is at the moment. Innovate UK has been very successful for us, so it’s a scary time.”
Dr Fiona Marston of Absynth Biologics suggested that although the Government once seemed to understand life sciences, “if this is the way they are going then we’ve lost that at the moment”. She continued: “There’s a short amount of time for us to lobby about this, but as the North, we need to be actively lobbying.”
Dr Mike Raxworthy of Neotherix believed, however, that there was a glimmer of hope, as the result of the Government’s Spending Review was better than he had anticipated. “I was with the Innovate UK people last month,” he said, “and they weren’t even sure they would exist after the Spending Review. They exist and have funding, but we’ve got to do other things with it.
“We’ve had millions of pounds from Innovate UK – and, without a doubt, some of us wouldn’t be here without their funding.” Dr Marston then noted that “We’ve had £2 million from Innovate UK.”
Dr Peter Simpson of the N8 Research Partnership entered the debate by saying he saw this as an opportunity for the sector to make sure its needs were included in the bids. “These bids will be led by Local Enterprise Partnerships,” he said, “so those from the North should reflect what we want the Government to know about the strengths of life sciences in the region.”
It was left to Dr Geoff Davison of Bionow to wrap up discussion of the potential impact of changes at Innovate UK. “A grant is an asset you can leverage,” he said, “and that is versus a loan which looks like a liability. It’s a completely different way of doing things, one which is going to be difficult for businesses in this sector to deal with.”