Around one in five of the world’s leading 100 medicines were developed in the UK ¬ more than any country except the US. Pharmaceutical-biotechnology sector collaborations today include early-stage drug deals, as well as products closer to commercialisation.

Pharmaceutical merger and acquisition or licensing deals continue to fuel European growth. Ernst & Young reports that half of Europe’s top ten acquisitions in 2006 involved UK companies. Indicative of the UK’s advanced industry, a third of deals featured UK biotech companies in the acquirer role.

Recent deals include US company Pfizer’s strategic acquisition of UK DNA-based vaccines specialist PowderMed, and AstraZeneca’s purchases of several UK-based companies: Arrow Therapeutics, KuDOS Pharmaceuticals, and notably its £587 million deal to acquire Cambridge Antibody Technology. Switzerland’s Novartis paid £308 million for UK-based NeuTec Pharma; GlaxoSmithKline acquired Domantis, a private US company with roots in Cambridge, UK.

The UK is Europe’s most popular location for biotechnology and pharmaceutical R&D investment, according to the European Commission. The UK’s excellent science base, its favourable economic and political climate, and fair regulation attract investors. The UK is second to the US globally. There are some 435 dedicated UK biotechnology businesses, with 18,900 employees and revenues of around £2.5 billion.

The UK has particular expertise in neurosciences, oncology, infectious diseases, vaccines, monoclonal antibodies and stem cell technology, as well as in bio processing. Over 50 companies are developing biopharmaceutical products in the UK. These target disease areas including cancer, neurological and cardiovascular diseases.

Employing 73,000 people, the UK’s pharmaceutical industry generates around 250,000 further related jobs. The UK is the fifth-largest global pharmaceutical market. In 2005 the industry’s exports reached £12.2 billion, creating a £3.4 billion trade surplus.

The UK leads Europe in product development, leveraging a much larger base of publicly traded therapeutics companies compared to other European countries – 40 companies have 147 clinical stage products in their pipeline.

According to the Association of the British Pharmaceutical Industry (ABPI) the number of compounds in development jumped from 561 in 2002 to 950 in 2006. Accounting for more than 60 percent of UK R&D investment in medical research during 2004-05, R&D expenditure by the pharmaceutical industry, including capital investment, had risen from £475 million in 1984 to £3.3 billion in 2005.

“The medicines pipeline is stronger than ever before, and there are many exciting prospects in a wide variety of therapeutic areas, including some of humanity’s toughest disease challenges,” says ABPI Director General, Dr Richard Barker.

UK researchers are behind the discovery of penicillin, and unravelling the structure of DNA. Monoclonal antibodies – which comprise a quarter of all biotechnology products in clinical development – were first isolated in the UK.

Leading high-technology industries cluster around the universities in Oxford, Cambridge and London, known as the Golden Triangle. England’s North East and North West are also major life science hubs, as is Scotland.

The UK’s South East is home to about 1,000 healthcare companies including nine of the world’s ten leading life science companies and the top 12 pharmaceutical companies. Industry leaders including Pfizer and Genzyme recently launched the South East Health Technologies Alliance (SEHTA) to increase funding opportunities and support innovation, especially for small and medium-sized companies.

International investments include Eisai’s European headquarters, development facilities for Amgen, Genzyme’s first discovery laboratory outside the US and establishment of a research collaboration by Wyeth.

Amgen selected Uxbridge, west London for its European Development Centre, a location that breeds talent thanks to the number of major companies based there. “Our Uxbridge facility provides a stepping stone to Europe,” said European head of R&D Dr Jeremy Haigh, also citing excellent communications to Amgen’s US headquarters.

“The UK has an excellent reputation for scientific innovation, especially in the area of life sciences,” says Eisai president and CEO, Haruo Naito. The Japanese company’s University College London research facility established in 1990 led to a treatment for neurodegenerative illness, now in clinical trials. “We hope that establishing our new site in the pharmaceutical and bio sector cluster in Hertfordshire will lead to further breakthrough discoveries.” London is Europe’s largest centre for clinical trials, with over 80 biotech companies, 28 universities, 98 hospitals and 75 National Health Service (NHS) trusts. The trusts attract some £287 million in annual R&D revenue. Stem cell research throughput could accelerate rapidly in future thanks to a consortium led by London-based Plasticell Ltd. The group has received £1.1 million in government funding to develop robotics to automate stem cell research. Imperial College London will join forces with Hammersmith Hospital and St Mary’s NHS Trusts to create a world-class Biomedical Research Centre (BRC) in West London. The BRC is to receive £19.5 million per year for five years, and joins ten other BRCs backed by the UK Government. Cambridge is home to 20% of the world’s Nobel Prize winners in medicine and chemistry, 17 of the UK’s publicly quoted biotech companies and a quarter of Europe’s public biotechs. Panacea Biotech, India’s second-largest vaccine producer, has recently teamed up with Cambridge Biostability, a temperature-stable vaccines specialist, in a £1.9 million joint venture. The companies aim to commence clinical trials next year, giving many more children access to life-saving vaccines. Oxford boasts over 60 biotech companies and the city’s universities, where 21 Nobel prizes for medicine and chemistry have been awarded since Florey and Chain discovered penicillin there in 1945.

Germany’s MorphoSys has created a new Oxford headquarters for its research antibody arm AbD Serotec. “The Oxford region provides us with a strong infrastructure and a high concentration of excellent academic researchers and innovative biotechnology companies both potential customers for our technology,” commented Dr Simon Moroney, MorphoSys’ chief executive officer.

In Scotland 592 life sciences companies and institutions employ over 20,700 people and contribute over £800 million annually to the Scottish economy. Scotland has been responsible for research breakthroughs from the discovery of antibiotics to the first cloned mammal. The pipeline for Scottish life sciences companies boasts over 53 products in preclinical and 21 in clinical development. Since 2001, the number of life sciences companies in Scotland has increased by an average of 20 per cent every year.

According to Mats Lundwall, chief executive of Sweden’s Cellartis, “Life sciences research in Scotland, particularly in the stem cell area, is recognised internationally.” Cellartis and its partners ITI Life Sciences and University of Glasgow have launched a £9.5 million R&D programme to develop human stem cells for pharmaceutical research, funded by ITI Life Sciences and the Scottish Executive.

The new Scottish Universities Life Sciences Alliance (SULSA) sees six universities pooling their research efforts. The Universities of Aberdeen, Dundee, Edinburgh, Glasgow, St Andrews and Strathclyde will invest £27 million and the Scottish Funding Council is providing £57 million to attract new academic staff, and boost cell biology, computer modelling and translational biology.

England’s North West is one of the UK’s leading biomedical clusters, with some 200 biomedical companies including seven multinational pharmaceutical companies, employing 20,000 people. It is the highest UK pharmaceutical exporting region (£3.4 billion).

The North West is home to AstraZeneca’s largest R&D facility; the UK’s largest University in Manchester, with 50% of research dedicated to life sciences and medicine and over £37 million in research income; Europe’s single largest in-market bio manufacturing community and the National Biomanufacturing Centre in Merseyside; UK Biobank, and Europe’s first dedicated campus based bioincubator.

The Wellcome Trust is a charity that supports basic research and provides £400 million in funding. It was instrumental in the UK’s significant contribution to the Human Genome Project through the Sanger Institute; and stimulates clinical research in the UK by funding five Clinical Research Facilities in Edinburgh, Manchester, Birmingham, Cambridge and Southampton.

UK drug discovery’s productivity is higher than in any other country. Companies spend £7.5 million each day on research and development in the UK. The Wellcome Trust has recently launched a £91 million Seeding Drug Discovery programme. Projects targeting lung cancer, antibiotic resistant bacteria and obesity have already benefited from between £2.3 million and £3.8 million each.

Overall, UK companies raised £278 million in equity over 35 deals, according to Ernst & Young. The UK market’s relative maturity in Europe means that capital is offered in more formats. “During 2006, seven of the 32 IPOs in Europe were UK-based, and the most successful was completed by Renovo, raising £58 million on the London Stock Exchange,” says Ernst & Young’s UK Biotech Team leader, William Powlett Smith. London’s Alternative Investment Market (AIM) attracted the highest number of biotech deals of any European exchange in 2006. Eight IPOs raised some £74 million here.

The 2007-2008 UK science budget is £3.4 billion. The UK Government has extended R&D tax relief for small and medium-sized companies (SMEs) of up to 500 employees. SMEs can claim 175 percent tax deduction on R&D expenditure from April 2008.

The recent EU Regulation on advanced therapy medicinal products establishes a harmonised regulatory framework for marketing advanced technology products, cell therapy, gene therapy and tissue engineered products. “This will incentivise further innovation in this area, opening up new treatment options,” according to the Bioindustry Association’s Chief Executive, Aisling Burnand.

The UK conducts 40% of public company clinical trials pipeline in Europe, according to Ernst & Young. The NHS is the largest aggregated patient pool in the world, and bought medicines worth over £10.6 billion in 2004. The UK Clinical Research Collaboration is developing the NHS’s clinical research infrastructure and competitiveness as a location for trials.

Sir David Cooksey’s report published in 2006 recommends a revised drug development pathway that could revolutionise UK pharmaceutical development. Meanwhile the Department of Business, Enterprise and Regulatory Reform’s Collaborative R&D scheme co-ordinates university research with industry-led projects, while the Bioprocess Research Industry Club awards grants towards studying bio processing fundamentals, ensuring a steady flow of skilled graduates for the bioscience sector.


CONTACTS

Regulatory affairs:
European Medicines Evaluation Agency
Tel: +44-(0)20-7418 8400
Web: www.emea.europa.eu

Medicines and Healthcare Products Regulatory Agency
Tel: +44-(0)20-7084 2000
Web: www.mhra.gov.uk

Industry associations:
The Association of the British Pharmaceutical Industry
Tel: +44-(0)870-890 4333
Web: www.abpi.org.uk

BioIndustries Association
Tel: +44-(0)20-7565 7190
Web: www.bioindustry.org

The Medical Research Council
Tel: +44-(0)20-7636 5422
Web: www.mrc.ac.uk

The Wellcome Trust
Tel: +44-(0)20-7611 8888
Web: www.wellcome.ac.uk
 

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