The U.K.'s Bioscience Innovation and Growth Team has released a new edition of its report 'Bioscience 2015: Improving National Health, Increasing National Wealth." The group says a number of changes have been made since the policy review was originally presented in 2003, including more support for the bioprocessing sector and medical research funding, as well as effective legislation to tackle animal rights extremism. The new "Refresh and Review" edition focuses on tax incentives to encourage pharma investments in biotech, which has decreased dramatically in recent years; a closer relationship between the UK regulatory agency and agencies in other countries; as well as a review of NICE's long-term impact.
The financial outlook of the UK's biotech sector is much more grim than it was in 2003. In 2007, U.K. 's own execs said the biotech sector was in "dire shape." Last year, many investors warned of a "collapse in confidence" due to high risk and fast cash burn. Currently, one third of the U.K.'s publicly owned biotechs have less than six months cash on hand, and biotechs represent a mere 0.2 percent of the companies listed on the London Stock Exchange, PharmaExec reports.
"Biotech companies have not given good enough returns to investors to make them want to come back. Private sector angels, venture capitalists, and public markets have all turned away," BIGT Chair Sir David Cooksey tells PharmaExec. "We need to make it more attractive, and then I have no doubt that as the extra funding is rolled out we will get the situation where there is more participation in terms of the public sector."
According to Cooksey, the biotech sector's risk-benefit profile just doesn't attract investors. Especially given the hurdles posed by agencies such as NICE and the EU clinical trials directive, which tend to apply policies much more stringently than in other countries. NICE's tendency to reject new more costly drugs that it believes doesn't offer significant advantages over older, low cost drugs has become a burden for pharma. Several Big Pharma companies--including Pfizer, Roche and Merck Serono--have cutback on clinical research programs in the U.K., citing difficulty testing experimental therapies due to the the limited use of drugs already on the market.
Many have predicted that the U.K.'s biotech sector may lag for another four or five years, but Cooksey says policy changes can turn things around. Rather than a large cash injection from the government, as some have called for, Cooksey says what's really needed is changes in the regulatory environment (both at the FDA and EMEA) and R&D tax credits. Such changes would encourage pharma companies to invest in the biotech sector and thus give investors more confidence in the industry.
"We are looking for real support from government to put a regulatory environment in place that will be effective in the longer term," he explains. "We need to look at how to change the drug development pathway, use modern techniques to make it cheaper, faster and safer-it's currently unnecessarily expensive. We are in danger of it no longer being worth a company's while [to get into drug discovery] as they will never get to be able to sell a product at the price they need and which is also acceptable [to the payers]."
- read an overview from BIGT
- view the full report (.pdf)
- check out the article