We need a bottom up approach to realising the UK Gov’s Life Science Strategy.
The last time I walked the the echoey corridors of the Palace of Westminster (UK parliament), I was a wee 12 year old, on a mission to push forward legislation to prevent the newly privatised water companies pouring raw sewage into cornish water. Not an unreasonable demand I thought at the time, but still one that went ignored until the EU came to the rescue a few years later.
Earlier this month I was back, this time by request. To my surprise I was invited to comment on the the Government’s Life Science Industrial Strategy. There were representatives from Schroders, who manage £450bn of floated assets, the renowned VC Albion Capital who manage just over £1bn, 20 lords and ladies… and me representing our 1 year old Deep Science Ventures 😵.
The principal aim of the Life Science Strategy is to generate 4 biotech companies worth more than £20bn in the next 10 years. It focuses on increasing the science research base, fixing the scale up issue (or more the early exit to US companies issue), continuing to close the gap between life science research, translation, and fluid paths in and out of industry, creating efficiencies in the NHS, and probably most timely, ensuring that the doors stay open to european and global scientific talent. Tangible progress has already been made towards implementation, with GSK, J&J, MSD and Roche all announcing new initiatives and investments in the last couple of weeks.
All of these announcements are great to see, however they are all very traditional later stage investments in partnerships and relocating R&D. Oddly the only mention of driving venture creation from the ground up is one paragraph right at the back of the report. If we’re really going to create 4x £20bn life science companies we’re going to need a lot more entrepreneurial scientists with the space to create, derisk and grow. The point of this piece is that I would love to hear from other groups or people passionate driving venture creation in life science, both with ideas and criticism. Together let’s bring together a coherent plan that can influence policy and find better ways to drive the creation of scalable biotech ventures from the ground up. The bullets below are some suggested starting points.
- Gung-ho capital. This was the phrase used by one of the Lords to describe the difference between the US attitude and the UK attitude. A phrase that I think captures it perfectly. This isn’t the problem of the lack of growth funds (which is addressed in the report and in the Budget), but rather the willingness of early stage investors to think big in the first place. That is, to go after the one in a thousand chance that a given company might dominate an entire sector, over a one in one hundred chance that it might return capital via consolidation of acqui-hire in 3 years. It’s hard to see how we’ll ever attract serious growth money when the opportunities are shaped for early exit from day one. SEIS/EIS has helped to drive venture creation in many ways, but from what I can see it a) drives this push even more towards early exit and b) has very little impact in high-tech ventures (due to the expertise required to assess the technical and market risk). Given how much money is being put to work in truly ambitious companies by US investors and the likes of mega funds such as Softbank, combined with the increasing opportunity for early investor liquidity (see Seedcamp and Park Walk fund sales), now is the time to create a mechanism that bridges the gap. Potentially, some form of stimulus such as government backed pot run by Innovate UK or component of the British Business Bank’s VC allocation, focused specifically on the most ambitious plans from the earliest stages would really help to drive long term change.
- A space to think outside of academia. Academia is a wonderful place, however, good researchers are laser focused on pushing the boundaries of knowledge forward and getting the next paper out of the door. Or more likely months of fighting the evil monster of disagreeable peer-reviewers. The incentives, structures and culture just isn’t focused on taking discoveries to the point of application. TTOs and university investment funds do a good job of taking research derived IP forward but it is a long, hard journey to retrofit research into application. This leaves any sort of entrepreneurial focus to the enterprise training, programmes such as YES Biotech (where I got my start, thanks guys). These are a fantastic first step but in my experience the majority of participants see them as training, with a view to really doing once they have the last paper out of the way and have time to focus. Only problem, that time never happens, once you’re done you need to pack up your desk and earn. What’s needed is a place where you can think about science, interface closely with academia and industry, but in the context of rapidly moving towards a product without any of the other distractions.
- Far greater emphasis on convergence and full stack approaches. The next 10 years will be defined by the convergence of different technologies, particularly a data led approach across everything from life sciences to materials. However, both public and private sources of funds still view opportunities with a very traditional mindset and these new approaches fall through the gap. Most universities are beginning to set up multidisciplinary institutes, but this takes years and unimaginable politics. In the meantime most collaborations start in the pub, driven by complete serendipity. Why not take a more directed and global approach by creating a space (physical and digital) where people from any scientific discipline, can come together in an applied context and see what’s possible at the interface. This is one of the things we aim to do at DSV, albeit on a small scale, we’d like to see the UK government really get behind this opportunity.
In summary it’s been fascinating to see a proactive focus on driving the UK’s life science industry forward. However, to have a hope of creating 4 x £20bn companies a lot more needs to be done at the earliest stages to create the pipeline that will one day, hopefully feed the late stage funds, industry and stock markets that were represented alongside me on the panel. I’d love to hear your thoughts, email or comment below.
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