Report: U.K. academic R&D alliances are expensive but worth it

A report commissioned by the United Kingdom government has found data to corroborate a widely held belief: R&D collaborations with British universities are expensive. Yet with such institutions performing world-class science--and tax breaks and funding schemes offsetting the upfront costs--Big Pharma is lining up to strike deals. Just ask Pfizer ($PFE).

The authors of the report persuaded some companies to open up parts of their financial data to show whether it costs more to collaborate with universities in the U.K. than overseas. While the sample size is small, the data that are available show the U.K. is among the most expensive places to run collaborative research projects. Funding schemes and tax breaks can offset some of the cost--the report recommends the simplification and promotion of such initiatives--but nobody is arguing the U.K. is cheap. Plenty of people think it represents good value, though.

Pfizer, the bogeyman of U.K. life sciences, topped a list compiled in the report of the most prolific foreign partners of British academic institutions. In its protracted attempt to buy AstraZeneca ($AZN), Pfizer was portrayed as the bane of British life sciences, a malevolent force that would rampage through the R&D ecosystem leaving a trail of unemployed scientists in its wake. Yet the situation was always more nuanced than the one presented in that highly polarized time--and now Pfizer has the data to prove it.

New York City-based Pfizer has more alliances with British universities than any other foreign business in any industry. The data show Pfizer has more than 100 collaborative research projects with more than 20 academic institutions, putting it comfortably ahead of the next most prolific foreign company, Airbus. Novartis ($NVS), Bayer, Eli Lilly ($LLY) and a clutch of other overseas businesses are even further behind. Out of all the other non-U.K. drugmakers, only Novartis has more than 50 collaborative projects.

The picture that emerges from the report has Pfizer standing nearly shoulder-to-shoulder with the stalwarts of British biopharma when it comes to collaborating with universities in the region. When collaborations at AstraZeneca and its subsidiary MedImmune are pooled, the company has slightly more projects than Pfizer. GlaxoSmithKline ($GSK) is out alone at the front of the pack with more than 150 collaborative projects, a figure that no business in any industry comes close to. GSK's collaborations involve 30 universities, the same number as AstraZeneca is working with.

Such breadth and depth of initiatives reflects well on the U.K. In an R&D ecosystem in which big in-house facilities have been phased out in favor of collaborations with third parties, Pfizer's links to U.K. universities are an important--but hard to quantify--contribution to the life sciences sector. For many though, the company blotted its copybook by reducing its presence in Sandwich, a decision that left thousands of people facing redundancy at a time when the industry as a whole was on the ropes. The cuts were repeatedly used as a stick with which to beat Pfizer during its pursuit of AstraZeneca.

- read the FT's article
- here's the review (PDF)
- and FierceBiotech's take