The meeting focused on harnessing the value of innovation and new models for collaboration. No small task. It had a strong UK focus but addressed issues familiar to many across the EU. Here is how it went.
The EU doesn’t have an Amgen – but we still have plenty to celebrate
Creating global beasts such as Genentech and Biogen and a furnace for start-ups in Boston certainly gives the US biotech sector plenty to be pleased about. The UK and Mainland Europe have not succeeded in replicating this model – neither in risk-taking investment nor commercially minded academia BUT despite much navel gazing but this should not be seen as failure.
Yes, there are still those who agonise about our inability to recreate Kendall Square in Europe but it’s time to recognise what the region is good at – and to stop beating ourselves up. Creativity and innovation UK/EU-style build value, add jobs and help patients. Companies grow and may be sold or move forward with licensing deals. Both bring money back into the sector for reinvestment and further development into new innovation. Both create growth and more jobs and create new therapies for patients. The UK in particular is recognised as a creative nation and our science is amongst the best in the world with 30% of EU biotech funding running through the City of London so let’s play to those strengths.
Necessity breeds invention in fundraising
In a twist that turns convention on its head, biotech can be seen as ‘low risk’ compared to other sectors such as tech. Barriers to entry in biotech are higher than for a software company for example. It’s relatively easy to develop software but will anyone buy it? Once you have developed a drug, your market is more assured: Interesting food for thought from one serial investor at the conference.
The courage needed to be a biotech entrepreneur and the difficulties of raising funds are catalysts for financial innovation. Crowdfunding is moving into the mainstream as providers develop models that give retail investors more information and confidence. Government cash is also available to the surprise of some. In diagnostics for example winning a government supply contract can be a massive milestone for a company’s value. Even the NIH has some cash for businesses. Charities of all shapes and sizes recognise the benefit they can bring to patients with expertise and money as well as bringing patients into research. Finally knowledgeable Angels recognise that they can get a better return by smart biotech investment than putting their money into more traditional opportunities.
Every type of investor agreed on one thing. Its people who make companies investable as much as the assets. People + technology + plan = investable proposition.
Relationships and collaboration
Reinventing the relationships between industry and academia is still fertile ground and there is more work to do. However some new models did emerge. For example, research teams are being invited to move from their academic homes to big pharma for a year. Once in the big pharma space they have access to cross-disciplinary tools and experts in a move that helps them to grow out of their silos. They are treated as one of the larger team and work formally and informally with people across the company. Cross-fertilisation of ideas enables creativity to flourish. After a year they move back and new people move in. The success factors are built around having shared goals and alignment, transparency on both sides and good personal relationships, relationships which endure post-assignment and encourage further collaboration. At least one big pharma portfolios is now 50% internal and 50% externally sourced and this kind of model will only accelerate the in-licensing of academic innovation to couple with industrial process and resources.
Quality over quantity in the competition for talent
From academia to investors, from SMEs to (at least midsize) pharma, innovation in every aspect of the biotech business is thriving. The shortage of talent in the sector continues but the quality of the people and their ability to adapt to every challenge is winning through.