London has all of the ingredients needed to become the bioscience capital of Europe, apart from the money
Ever since LSD lubricated Francis Crick’s discovery of the double-helix structure of DNA in 1968, Britain has maintained a strong bio-science industry.
The capital forms a golden triangle of research with Cambridge and Oxford. London has the London Bioscience Innovation centre and groups such as Bio London, One Nucleus and The London Technology Network. Yet the golden glow is in danger of dimming.
Our industry source asked to remain anonymous, wary of speaking out against the goverment. The sector is in trouble and funding for start-up biotech companies is the cause.
“It has always been difficult to find finance to support start-ups in the bioscience and life-science sectors. Ensuring that the funds were provided to take your company through the varied and incredibly expensive rounds of corporate development has always been hard.”
“No amount of tinkering with tax breaks will provide the large sums needed in those initial stages of biotech”
The London Technology Fund was established to bridge the gap that exists in funding for early-stage technology companies. Bankrolled by the European Regional Development Fund and the London Development Agency, the fund was charged with seeking and financing unquoted technology-based SMEs with their headquarters and principal base of business in Greater London.
The LTF has completed 22 investments in eight companies and has helped to secure over £27m in investment for London-based high technology. But funds have run out. While the LTF is continuing to invest in its existing portfolio of companies, it’s no longer seeking new investments.
To make matters worse the general investment market has moved even further away from early-stage funding leaving even more would-be bio-tech companies without the support they need to get off the ground. Business angels and venture capitalists just aren’t willing to back these capital intensive, slow-to-exit start-ups.
“No amount of tinkering with tax breaks will provide the large sums needed in those initial stages of biotech – in many instances upwards of £4m per round and growing. Therefore the bioscience industry is in crisis.”
With big corporates such as Pfizer no longer in a position to support smaller emerging companies opportunities for innovation are running out. According to our source, unless the government is willing to put up the capital to fund London’s biotech start-ups, the funding pool will remain dry.
“London’s fund managers have no appetite to invest in drug or medical device development. There are no compelling reasons in invest unless you are not expecting returns,” he grimaces.
It seems it’s up to the government and selfless philanthropists to save our bio-science sector. Without their support we stand to lose an essential part of our economy.
“Bioscience research is going to be central to overcoming some of the challenges facing society in the coming century,” says Dr Celia Caulcott, BBSRC director of innovation and skills.
“To ensure food security, find alternatives to fossils fuels and support health into old age we must capitalise on the UK’s strong tradition of world-leading research.”
London seems to be a unique example of where this kind of industry should prosper. It has a number of prominent universities and research hospitals and accounts for a large portion of publiclyfunded research in Britain and trains a quarter of the country’s graduates.
“The bio-sector could be a major high-tech part of London economy,” explains our source.
“It combines major research from leading teaching hospitals with the necessary support services, such as patent agents and lawyers, together with global corporates and the venture capital industry.”
But with these investors reluctant to get behind our biotech industry things appear a far cry from Crick’s colourful world of research and discovery – in fact, they appear pretty grey.