Interview: Steve Bates, BIA

Over the last few years the relationship between the pharmaceutical industry and the biotechnology sector has been shifting. Pharma's well documented need for pipeline innovation, but growing appreciation of the environments in which it often best flourishes, has led the traditional partners, but at times somewhat uneasy bedfellows, to reappraise their views of each other.

Someone with a bird's eye view of the shifts occurring on the biotech side of the table is Steve Bates. He has worked in the sector, gaining a solid grounding in biotech at Genzyme, as well as at the highest levels of the UK government, for 15 years, and serves as chief executive of the UK's BioIndustry Association, a post he has held since July last year.

Consequently he's been at the heart of some of the most interesting recent developments within UK biotech, as the plans the government set out in December 2011 to make the UK a world-leading place for life sciences investment begin to pay off.

Bates is also well placed to appreciate the pharma view, with the BIA sharing an office building with its pharma industry counterpart the Association of the British Pharmaceutical Industry (ABPI). “I describe it as an ecosystem,” Bates says of the combined life sciences industry. “You can see there is a very significant proportion of pharma's pipeline that is biological in its derivation”.

We're lucky in the UK to have many people who formulated their basic ideas or learned their trade in pharma

The benefits of biotech are certainly on pharma's mind and can be seen in the recent creation of AbbVie as a standalone biopharmaceutical from the Abbott business. The way AbbVie sees itself, or wants to be seen – combining “the focus and passion of a leading-edge biotech with the expertise and structure of a long-established pharmaceutical leader” - is telling. “It's interesting to see that people see the value in going to a posture that's more biotech-like in terms of partnering and sharing,” Bates says of Abbott's decision.

To pick just one other example from the many available, it could also be seen when Sanofi CEO Chris Viehbacher looked to reassure the staff of Genzyme in 2011, promising not to 'Sanofise' the US biotech his company had just acquired.

But Bates acknowledges that the push and pull between pharma and biotech can still produce a relationship that is, at times, difficult. Partly this is because, while biotechs are looking for partners to help them advance their discoveries, they are also likely to want to retain a hold on their assets as far along the value chain as they possibly can. “Whereas at the same time their [pharma] partner is sitting on a degree of money and trying to work out whether it is best to in-license or acquire an asset,” Bates explains. “So there is a degree of tension … I think it was ever thus between buyers and sellers. But some of the historic cultural mistrust is breaking down, because the sectors are working more closely together.”

He sees evidence of this in the BIA's own membership, which includes such pharma companies as GlaxoSmithKline, Pfizer and AstraZeneca. “It's great for us, for instance, to have companies as big as GSK represented on the BIA board. I don't think that was happening a few years ago. So having someone like [GSK's SVP of worldwide business development and biopharmaceutical R&D] Ian Tomlinson really helps to build trust.”

Whether or not the relationship was occasionally problematic in the past, the biotech sector's close historic ties with the pharmaceutical industry have served it well, facilitating an exchange of ideas and personnel.

“We're lucky in the UK to have many people who formulated their basic ideas or learned their trade in pharma,” says Bates. “They adapt very well to a more biotech or entrepreneurial style culture, because they've got an understanding of what makes things fly.”

But for Bates, his role at the BIA is clearly far wider than just working with big pharma. In fact, on starting in his current role, he says that if anything came as a surprise it was the variety of the sector. “There is a really very broad section of different types of organisations within the membership of the BIA and that come to our events – everybody from people who are literally starting their company this very week with some intellectual property from a university, all the way up to the GSKs or the AstraZenecas of this world, who are struggling with the global challenges of the pharmaceutical industry.”

“What's also struck me is the passion of the people for the science, and the aspiration that that can be turned into things that make a practical difference for people. That's really invigorating and it makes for a very exciting group of people to work with.”

Biotech in the UK
The contribution these people make, together with the biotech landscape in the UK, give the sector a solid foundation, says Bates. “There is global respect for the UK science base. That's seen by any metric in terms of publications, citations, the emphasis on Nobel Prizes and is, perhaps, the bedrock on which engagement with the UK is based.

“I think people also understand the heritage of the UK in terms of developing and delivering globally important products.”

Part of this is the contribution made by the country's National Health Service (NHS) and the integration of the UK's science base and research and development culture into academia.

“The NHS gives a particular flavour to the ability to do research in a heterogeneous population, because of Britain's cultural mix. If you can get that to work properly it can give you deep reach and a good research capacity.”

Nevertheless, Bates acknowledges the challenges UK biotech faces from other countries. The rise of the Far East in biotech terms has been pronounced, especially when it comes to Singapore. The city-state has attracted big biotech manufacturing investments in recent months, with Novartis earmarking $500m for a new facility and Amgen planning a $200m plant.

“What you're seeing is the comparative rise of other parts of the globe,” says Bates. “But there is enough in the expanding global market for the UK to compete and, I believe, we can successfully compete for the right things and do them not only effectively for the UK, but for the globe.”

“Perhaps the thing we're less strong on is – having built successful biotech companies through to global strength, if you like – getting them to a size where they are able to stand on their own two feet. And that's really why getting the investment right for UK biotech is increasingly important.”

The investment issue
There have been significant moves towards addressing UK biotech's investment issue through the government's commitment to the Biomedical Catalyst. The £180m funding scheme for innovative small-to-medium size bioscience companies was a centrepiece of 2011's Life Sciences Strategy. Making it work for his organisation's members has been a big part of Bates' first few months as CEO of the BIA.

“One of the key things that we've been able to do is ensure that the sector fully understands the opportunity here. I think we've done a good job in making sure that the scheme delivers for the needs of the companies and also demonstrated the value of it back to government so that they feel confident that they've done the right thing.”

But access to finance remains a big challenge for the sector. The so-called “funding valley of death” for biotechs may be alleviated by the Biomedical Catalyst, but Bates still talks of a “nuclear winter of investment … stretching back to the original banking crisis or even prior to that for some biotechs”.

Looking to help further alleviate this situation, Bates hopes to persuade the government to implement a new type of innovative funding stream for companies that are 'pre-revenue' and has worked elsewhere in Europe.

"Citizens' Innovation Funds are a way to unlock the patriotic potential of the British people to invest in innovative things that we'll need in the future, of which biotech and the products that come from biotech investment are one.”

The Funds are based on a French idea called FCPI (fonds commun de placement dans l'innovation), which Bates says have brought around €6bn into innovative companies in France over the last decade. “We think that was a good reason to bring in a similar scheme in the UK.”

The aim would be to encourage 'crowd sourced' funding and could see people investing in funds based around a particular therapy area, such as cancer or Parkinson's disease. Research conducted by the BIA suggests the public is interested in the idea and the funds have been received positively by other innovative sectors in the UK, Bates said.

But there remain a number of challenges in terms of how the funds would work, who would sell them and how would they be managed and promoted. Crucially, or course, they would need government backing. “I think that they get the idea,” says Bates, “and I think that they can see why we think there is a piece of the jigsaw that they've missed in their existing support for business.”

Bates concludes: “The government is keenly aware of the need to deliver jobs and growth in the economy and is open to innovative ideas in a way that perhaps governments might not be if we weren't in a period of significant economic challenge.”