A new wave of biotechs takes shape in the U.K.
Over the past few days I've met with dozens of people in the U.K.'s biotech industry, getting a crash course on the state of affairs here while getting a chance to offer a few opinions of my own on global drug development trends at a One Nucleus gathering at Canada House.
A few years ago, I covered several prominent biotech companies in the country. Then Antisoma and Renovo and others hit the wall and disintegrated, leaving investors soured on the prospects of such companies at a time a new wave of biotechs was beginning to take form.
If I had to put it all in a nutshell, I'd say that the country's extraordinary scientific reputation founded in Oxford, Cambridge, as well as the major London institutions, has continued to thrive, helped by new initiatives at the Wellcome Trust and other groups avid to foster early-stage research and do more on the translation side of drug development. And of course GlaxoSmithKline ($GSK) and AstraZeneca ($AZN) on the other end of the spectrum are extraordinarily high profile pharmas, whose R&D advances and setbacks continue to enthrall.
But the middle section of that picture, where biotechs should have been making news with new fundraising, interesting mid-stage work and a growing pipeline, remained fuzzy to me. In part, that's because raising money here and in the rest of Europe remains difficult--at best. The traditional VCs that do much of the heavy financial lifting in the U.S. are far less prominent here. High net worth individuals, corporate venture arms and non-profit funds have lent a hand, but can't fill that kind of void--particularly if you consider the kind of science that's here waiting to be exploited by up-and-coming ventures.
As a result, the BioIndustry Association's new CEO, Steve Bates, hit the ground running with a proposal to create new crowdsourced funds, which would offer small investors a chance to wager some of their money in a tax-advantaged way. Coupled with some new initiatives aimed at sustaining the industry, most prominently the catalyst fund to support early-stage work, the idea was that companies would have a new source of capital to compete for as they worked to obtain proof-of-concept data, pushing them to the point where viable products could take shape, deals could be negotiated with pharma and the next generation of prominent players could emerge.
At a dinner meeting with Bates last night I also suggested that if he's successful, some of the more active venture funds in the U.S. might be persuaded to start scouting future syndications. There's by no means an overabundance of venture capital in the U.S., but the companies here are eager to find ways to plug themselves more directly into the U.S. scene, which drug developers see as a crucial playing field. VC's American connections would be very valuable. And a surge of funding would put the VCs into play around the time that assets are nearing important development stages, offering a shot at some reasonably timed exits.
This will all play out over the next few weeks as the government prepares its next budget. We'll be watching to see how the initiative performs, but if my enthusiastic reception in London is any indication, one way or another we'll be seeing a new group of developers step into the spotlight. -- John Carroll, Editor-in-Chief. Follow me on Twitter and LinkedIn.