One of most eye-catching developments in UK biotech this year saw the start-up Ziylo acquired in a deal worth up to £623m by Novo Nordisk, a global leader in diabetes research.
Ziylo was founded at the University of Bristol by Dr Harry Destrecoix, then a PhD student, with Professor Anthony Davis and businessman Tom Smart. Speaking in the aftermath of the deal, Dr Destrecoix said the takeover would ultimately result in a better medicine getting to market quicker, but he also touched upon the historic lack of laboratory space that has held back scientific research.
He raises a key and sometimes neglected point: how is this country going to attract the investment to ensure it does not lag behind in terms of creating places to conduct world class scientific research? The UK has one of most productive health and life sciences sectors in the world. Health and life sciences are worth over £70bn to the economy and provide jobs for almost 241,000 people. But it operates in an increasingly competitive global market, where strong demand for drug discovery and healthcare innovation is driving a race to innovate.
In all this, the Ziylo deal serves as a timely reminder of the importance of research universities and the role of incubators in helping science and technology companies get established.
Universities are at the core of our ability as a nation to nurture the key ingredients of innovation: acquiring new knowledge, comparing ideas, seeking solutions and fostering inventiveness. The UK’s 24 leading research universities are represented by the Russell Group and collectively inject nearly £87bn into the national economy every year. Some 17 of the 24 universities are based outside the ‘Golden Triangle’ of London, Oxford and Cambridge. They are fundamental to how we take the life sciences economy forward, collectively providing the framework on which the UK can further develop a high-value, highly skilled economy.
Funding is of course a key component in the sector progressing. The Industrial Strategy set out the laudable objective of the government working with industry to boost spending on research and development to 2.4% of GDP by 2027. The context here is worth keeping in mind. According to World Bank figures, Korea (4.2%), Japan (3.3%), the United States (2.8%), Germany (2.8%), Switzerland (2.4%), France (2.2%) and China 2.07%) are already making a bigger commitment to R&D.
In my view supporting the growth of science and technology clusters in the UK regions needs to be a priority consideration. Ziylo, based at the Unit DX incubator unit in Bristol, received various forms of research and innovation support over the years from Innovate UK and the Engineering and Physical Sciences Research Council. No doubt all concerned are justly proud of their role in backing a company that seeks to develop the world’s first ‘smart’ insulin, capable of modulating its effectiveness depending on how much glucose is present in a patient’s bloodstream.
In 2015, the government announced regional Science and Innovation Audits (SIAs) in order to foster a new approach to regional economic development. We are seeing some progress here. Now in its third wave, SIAs are helping to galvanise sci-tech related enterprise across the country. But the message from the regions to central government needs to be loud and clear: we are not looking for handouts, but rather recognition of what can be achieved by building on our intellectual and entrepreneurial base across the country.
The potential in cities like Manchester, Liverpool, Leeds, Birmingham and elsewhere – all cities with fine universities – is palpable and was one of the drivers behind the creation of Bruntwood SciTech earlier this year. The new venture was formed by leading property company Bruntwood and Legal & General Capital, one of Europe’s major institutional investors. The business has nailed its colours to the mast of the regions and it started life as the owners of the UK’s largest portfolio of science and technology assets. It includes more than 500 science and technology businesses, ranging from digital start- ups to global life sciences companies. The two partners have invested £360m of capital, property and intellectual assets into the new venture, with a business plan supporting the creation of over 20,000 high-value jobs in the regions over the next ten years.
That portfolio includes Alderley Park in Cheshire, where I am the managing director and which is now home to a growing community of 65 SMEs and 150 start-ups. The ongoing programme of investment at the Park has supported the expansion and development of our ecosystem of high specification labs, offices, scientific services and a programme of specialist business support. Alderley Park also has two venture funds based here, one of which, the £42m Greater Manchester and Cheshire Life Science Fund, has already invested in 25 businesses across pharmaceuticals, biotech, diagnostics, CROs and medical devices.
The model here is about making sure we have genuinely world-class facilities for science and technology businesses at every stage of the life cycle, from start-up to large corporate within one location. The chances of any IP-based business succeeding are massively enhanced if it’s operating in an environment where you have the right elements – by bringing these elements together in clusters in regional cities we have seen how it can have a transformative effect. While we’re extremely proud of the work we do, we are adamant that we need more sites like ours across the country – both to spur us on and to improve the number of scientific breakthroughs generated throughout the UK.
The business is aligned to the broader notion of rebalancing the UK economy so that it is not overly reliant on London and the South East. That’s not about the old North v South rivalry, but rather fostering competition for the greater good. Initiatives such as the Northern Powerhouse and Midlands Engine have science and technology as a priority area. At the same time, through devolution and other key initiatives, the government has made a more determined effort to unleash potential.
In the post-Brexit era, greater collaboration within the UK – a more joined-up approach between North and South, and greater awareness in Westminster of the economic potential in the regions – will be essential. The UK is a small country, with distances between the respective science and tech clusters insignificant compared to, say, the USA or China. The last thing we need to do is underplay what’s on offer outside the traditional research hotspots.