At the same time, the rise of precision medicine has encouraged the proliferation of highly focused contract research companies operating under licence with big pharma.
The overall trend has driven the growth of SMEs and highlighted the importance of nurturing start-ups at the beginning of the chain, where small teams might have potentially valuable science but may lack the wherewithal to scale up the business.
Business incubators have an important role in helping these acorns grow, but who pays for their operation? Emily Slupek acknowledged that the incubator model does not suit everyone. She felt the UK needs more companies dedicated to lab operations:
If a developer wants to put in the capital, reap the rewards, and walk away from it – well you can't do that with the incubator setup because there's an operational element.”
Galvin Tarling echoed the point. Citing Bruntwood SciTech, he said there are developers that have the scale to take the property issues away from SMEs and their investors.
In that scenario, the occupier is “not hamstrung by leases and property-related issues that constrain them.” Instead, they “focus on what they're set up and funded to do.”
It's an expensive, loss-making and highly specialist field. Typically, incubators are backed with a degree of public subsidy or developers have the scale at which they can run one as a loss leader to foster the growth of those SMEs into the larger buildings on their estate.”
Cambridge’s Babraham Research Campus has a vision to be the best place in Europe to start up a Life Sciences venture and is expanding.
A joint venture between the campus and BioMed Realty is set to deliver a 40,000 sq ft purpose-built accommodation, which includes lab space.
The site already co-locates academic research and commercial bioscience enterprises.
Emily Slupek reflected on its importance of the Cambridge cluster but noted that Babrabam has an element of public funding, with a subsidy for its incubator spaces.
“Why is everyone willing to do business in Cambridge, Oxford and London? Because there are successful, albeit oversubscribed, incubator spaces.”
In a previous role, he worked with a rule that part of the underwriting thesis for any Life Science development was the proximity of incubators.
Where they existed, “there was no need to provide incubator space that lose money,” and a belief that the companies progressing will require bigger space one day.
The panel agreed that UK Life Science has a theoretical advantage over other countries because of the NHS. A unified health system, in which every patient is assigned a single number that follows them from birth to death, is particularly useful for running clinical trials.
The idea that the NHS is a fast adopter of innovative medicines and products, as well as the cleanest, largest pool of medical data in the world, sounds great and is an attractive proposition to global investors.
However good it sounds on paper, UK biotech understands that it does not work quite as well in practice, but Cambridge does at least excel in health care.
The UK regions that have physically located businesses in the knowledge economy alongside NHS Heath Trusts and research-focused universities have generally thrived – with Manchester’s growth over the last decade up accepted by the panel as an example that other cities could follow.
The links into health care and higher education sectors in Cambridge are excellent. These connections also support early-stage businesses with access to specialist equipment, which is essential to a flourishing ecosystem.”
