The Brexit debate: As the U.K. prepares to leave the EU, what will happen to research?

BIA CEO Steve Bates talks Brexit with FierceBiotech Senior Editor Ben Adams. (FierceBiotech)

Perhaps nothing is more divisive in Britain today than Brexit. The country is gearing up to leave next March, though it will likely go through a transition period before cutting the cord completely.

There are still many known unknowns, and just unknowns: Will there be a deal with the EU, or will the U.K. "crash out" with a No Deal Brexit, which in translation means that there would be no formal agreement reached from the protracted negotiations between the U.K. and the EU. This would have major implications for visas, tariffs, regulations and funding and is a nightmare scenario for many businesses, but the will among many who voted to leave back in 2016.

It’s a political and emotional debate that has in the public domain typically focused on immigration and "taking back control" from Europe, but often, industries can be forgotten, and the basis of what makes them—which in the life science sector is research and development—overlooked. We looked to put that front and center at this year’s FierceBiotech Executive Summit: London.  

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To prove just how divisive Brexit is, people from many publicly funded companies said they didn’t want to speak at the event, or any other Brexit panel, having been told by their PR handlers to back away; I was told by many that whatever they said on Brexit, it was hitting their share price, and silence was quite literally a better price to pay.

An ominous start; but on our first panel, with speakers from Alderley Park (a biotech hub in the north of England and former home of AstraZeneca), the AMR Centre (focused on work to help defeat antimicrobial resistance) and the Cell and Gene Therapy Catapult (CGTC, a service organization to help companies working on cell and gene therapies), as well as Dr Munna Choudhury, independent consultant, affiliated with Accenture and Alacramed, the mood was surprisingly optimistic.

I say surprisingly, because much talk in the U.K. has been doom and gloom, but in fact, since the summer of 2016, there has been little gloom and much boom in funding for British life science plc.

Matthew Durdy, chief business officer at CGTC, said: “When the vote first happened, I thought: Oh my God, what a nightmare. In our model, a third of our income is supposed to come from grant funding, and a big chunk of that is set to come from collaborations with Europe, such as the Horizon 2020 fund.

“So, I thought, as the person responsible for business development: This is it, we’re never going to hit our [funding] numbers ever again. But, actually, it really hasn’t worked out that way. Now, I’m not saying it won’t [get worse], but it hasn’t worked out like that so far. The fundamentals of scientific collaborations are so strong that we still see a lot of discussion with universities going on across Europe who want to work with us.

“Then the question comes: Well, how does that get funded? At the moment, as the U.K. government has said if you go into something now, we’ll honor that obligation, people have believed that, have stood by it, and we’ve actually increased our number of collaborations, and of higher value, than we did before the Brexit vote [in 2016].”

Durdy said it did, however, make them think beyond Europe more for future collaborations. The CGTC now has deals with China and Canada, and a deal on the cards in the U.S., and he adds that it has made them more open to the rest of the world, which has been “a real positive for us.”

Peter Jackson, Ph.D., executive director at The AMR Centre, echoed Durdy’s optimism: “In our field, developing antibiotics, the first three programs we are working on, well two of those are funded by CARB-X, a joint U.K.-U.S. government based out of Boston. So, very much in our world, we’re looking to the West, rather than to Europe.

“I think by concentrating too much on what we’re missing [in Europe], we’re in danger of missing out on the opportunities that might be out there, if only we were to look and get engaged.”

Chris Doherty, Ph.D., managing director at Alderley Park, said: “The [life science] sector still seems pretty buoyant; we’re still seeing record levels of investment coming in, and the country has one of the largest clinical trial portfolios in Europe, so on the macro level, everything still seems to be doing OK.

“On our level, and we work with around 200 life science companies, they all seem to be doing quite well; they’re expanding and forming: We’ve seen 93 companies form in the last four years [at Alderley Park] and they are growing. Funding has always been an issue, and will always be an issue, but they are finding it.

“They may have to look further afield, but generally in the cluster we have, we’re still seeing that organic growth of companies. And we’re attracting from further afield, too: We have a group of Americans in the cluster, our first Indian company coming to the U.K., so we haven’t seen a halting of funding or people coming to the U.K., and we can only hope that will continue.”

RELATED: As U.K. politicians fret Brexit will ‘decimate medical research,’ AstraZeneca sticks to R&D plan

Keeping the lights on

So, things have been going well since the vote, with no catastrophes or blowups as a result. But this does not mean all is rosy: There remain deep concerns over the future of research in the U.K. post-Brexit, with a No Deal the biggest uncertainty.

The biggest issues are regulation—as the EMA moves house from London to Amsterdam, will this cause delays in trials or approvals—and talent, especially for SMEs, which typically rely on getting scientists for their startups from across Europe.

For our Fireside Chat, I sat down with Steve Bates, CEO of the BioIndustry Association (BIA), the trade group for British biotechs, who talks regularly with the British government about his members’ needs.

Bates says that he’s been doing this job for six years now and thinks the industry is in better spirits now than it was when he first took over at the BIA in 2012. “I take a long view with Brexit,” he said. “You remember when Kissinger went to China and asked them about what they thought of the French Revolution, and they said: ‘Too early to tell,’ I have the same view about Brexit.

“If you look at big events like the French Revolution, half of things change, and half stay the same. And the half that stay the same are, I think, the most important. For life science, that’s scientific and technological innovation, which transcends time, borders, and Brexit. The things that won’t change for us is the fundamental strength of British biotech, and its endeavor.”

But Bates acknowledges the big issues. “There are serious sector concerns,” he says. One of these is uncertainty, which he says the government is trying to minimize, but there is of course the major elephant in the room, which is a No Deal Brexit that the sector simply can’t control or have foreknowledge of.

“I can’t mitigate against that,” Bates explains. “All I can do is try to explain and help as best I can as that changes on a monthly, or weekly, basis. But uncertainty here remains a core risk, and businesses abhor this uncertainty.”

He said it also breaks down as to where a biotech company is in terms of development. There is of course a range at the BIA, from the very early preclinical to later and commercial stage. For the latter, which are selling drugs, there will be “big changes” to how that is done operationally in Europe, given the regulatory changes, and there is a “lack of sight on what the trade risks are, as well as the border risks. So, this is about continued supply; essentially, disentangling a market which has grown as a single market, and we don’t yet know how that process will go, or what we’ll face afterwards.”

It’s tough to plan for a No Deal, but Bates says that he sees a series of “no deal deals” that will cut through these issues. “I can’t say what that would look like, but it would at the very least keep the lights on.”

During the Q&A, it became clear that there is also what we’d call a soft issue: culture. Outside of the possible visa issues, there is concern as to whether European scientists, who have to consider the effects of bringing their families and lives into the U.K., will feel wanted in a country that has rejected the Union. This is difficult to gauge and quantify, but it was certainly an issue that kept arising in my discussions with European biotech leaders after the event.

Brexit has proven to be a difficult beast to tame; it has caused political earthquakes that toppled one prime minister and may yet swallow up another. There is still raw anger on every side of the debate: some are concerned that there is a bubbling "betrayal" of the 2016 referendum, with others wanting a so-called People’s Vote to try to nullify the first, and still more who want a hybrid out-but-still-sort-of-in-the-EU deal.

Many businesses have publicly expressed concerns about Brexit, especially under a No Deal, but some industries will naturally cope better than others. Life sciences, as ever, has to take the long view: Research is a long-sighted game that requires decades of planning and huge amounts of capital; a lot of specialists often from around the globe; and, perhaps most importantly, a consistent, incentive-driven environment in which to seed and grow.

Brexit, whether with a deal, or without, will undoubtedly cause difficulties for some, but the biotech industry is hard-wired for success against the odds and maximizing the opportunities.

Check out the audio from the first panel: