At the Biotech and Money conference in London on 2 to 3 February industry executives were optimistic that the sector was en route towards building a diversified, self-standing sector. The success of Circassia in raising £202 million in a London IPO in 2014 and the expansion through acquisitions of Abzena, until recently a small service provider, are only two examples. The new wave of companies constitutes a broadly based, diversified life science sector, delegates were told.

“That Circassia could raise money for its own Phase 3 trial would have been unheard of five years ago,” said Sam Williams, head of biotech for the IP Group. Circassia is a development-stage allergy therapeutics company.

Darrin Disley, CEO of Horizon Discovery, said he was encouraged by the number of companies that are looking beyond their own operations to take an interest in the health of the sector as a whole. Horizon also had a successful IPO in London in 2014.

The reasons for the optimism can be traced to both money and people.

On the financial side, the number of individual investors ready to put risk capital into start-ups has increased with the introduction of the tax incentive schemes Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS). The two schemes lower the rate of tax for investors who provide capital to young enterprises. The risk to investors is further limited by a provision enabling them to claim relief if a company fails. In addition, the government has introduced a ‘patent box’ scheme setting a lower tax rate for companies that generate profits from intellectual property initially developed in the UK.

Added to this are the activities of Neil Woodford, a former Invesco Perpetual manager, who has emerged as one of the most active investors in British biotech. Mr Woodford heads up Woodford Patient Capital Trust Plc, which was listed in April 2015. The fund has already invested alongside Imperial Innovations in a number of UK companies, the most recent of which was Mission Therapeutics, a company developing enzyme inhibitors targeting difficult-to-treat cancers.

Woodford’s mandate is to support predominantly UK companies. The strategy is to provide ‘patient capital’ which is another term for longer-term capital. The point is to align the supply of capital with the drug development requirements of biotech.

“Woodford has done a fantastic job. Almost singlehandedly, he has transformed the sector,” said Jim Mellon, a serial entrepreneur and founder of Mann Bioinvest.

Another new element in the investment picture is the increasing interest of Big Pharma in collaborating with UK universities. A week before the conference, GlaxoSmithKline, AstraZeneca and Johnson & Johnson launched the Apollo Fund together with universities in London and Cambridge to invest in promising university research. Mene Pangalos of AstraZeneca, told the meeting that the new fund is an opportunity to “tap into the universities and access the best science.”

Meanwhile GSK is further broadening its network by setting up a unit within the company to host senior academic immunologists for what is essentially a sabbatical, Paul-Peter Tak, of GSK told the meeting.

On the other hand, delegates were told that the UK still has too few healthcare analysts and too few retail investors willing to invest in publicly listed life science companies.

Author: Victoria English, Editor at MedNous

Source: MedNous News

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