Transcript Glenn Crocker BioCity

Life Science Market
Overview
…and the North West’s position
Changing life science landscape
Drivers from pharmacentric stand point
•
•
•
Price and efficacy
pressures
Drug discovery
business model
requires ever greater
bets with reduced
odds
Customer market
fragmentation
Pharma Response
• Reduction in
overhead with
closure of research
sites
 AZ - Charnwood, Alderley
Park, Lund…
 MSD- Newhouse
 Pfizer – Sandwich….
 Novartis- Horsham…
 Sanofi- Dagenham,
Toulouse, Montpelier
 Etc etc
Changing life science landscape
Drivers from pharmacentric stand point
•
•
•
Price and efficacy
pressures
Drug discovery
business model
requires ever greater
bets with reduced
odds
Customer market
fragmentation
Pharma Response
Implications for smaller
companies
• Reduction in
overhead with
closure of research
sites
•
• Release of skilled
staff
• Improved skill base
• Increased focus on
early
stage/incubation/aca
demic collaboration
Release of prime facilities
for emerging companies.
Much greater capital
efficiency with better
resources
Pharma Incubates
• Bayer- Colaborator- San Franscisco
• GSK- Stevenage Biocatalyst
• J&J- London, Boston, California, Shanghai, Israel
• Merck Serono- Israel
Changing life science landscape
Drivers from pharmacentric stand point
•
•
•
Price and efficacy
pressures
Drug discovery
business model
requires ever greater
bets with reduced
odds
Customer market
fragmentation
Pharma Response
Implications for smaller
companies
• Reduction in
overhead with
closure of research
sites
•
• Release of skilled
staff
• Improved skill base
• Scramble for early
stage/incubation/aca
demic collaboration
• Increased corporate
venture funding.
• Lots of interest for
novel propositions
• Release of assets &
increased outsourcing
Release of prime facilities
for emerging companies.
Much greater capital
efficiency with better
resources
• Good time to be a CRO
But….
• Fundamentally the model hasn’t changed- need new ways of beating
the odds
Plus:
• Drugs only 10% of healthcare expenditure
• Many new therapies are “services” not pills- clinician intervention
• Emerging drive towards patient responsibility> increasing role of
pharmacist
• Wallgreens/AllianceBoots turnover $110 billion
• Rise of ehealth
• Google will be biggest healthcare company within 10 years
…these are the battlegrounds of the future.
Opportunities for new entrants
Virtual Asset Development Models
Pharma 3.0?
Venture Fund
• Versant Ventures
• Avalon
Pharma
Virtual
R&D
Vehicle
• Roche
• GSK
Funding flowing into life sciences in US
USA Healthcare IPOs
60
10
9
50
8
7
Number
40
6
30
5
4
20
3
2
10
1
0
0
2009
2010
2011
2012
Axis Title
Number (LH axis)
Amount raised $Bn (RH axis)
2013
UK public market for Pharma and biotech strong
…although AZ a significant impact
UK IPO Market Finally opening up for Life Sciences
16
450
14
400
12
350
300
10
250
8
200
6
150
4
100
2
50
0
0
2000
2001
2002
2003
2004
2005
2006
Number (LH axis)
2007
2008
2009
2010
2011
Amount raised £M(RH axis)
2012
2013
2014
H1
But a lot resting on a few shoulders
Company
IPO Date
Amount
Raised (£M)
Mkt Cap at
Float (£M)
Mkt Cap
20/6/14 (£M)
Horizon Discovery
March 14
40
136
100
Circassia
March 14
200
581
549
4D Pharma
Feb 14
17
63
65
Oxford Immunotec Dec 13
(NASDAQ)
40
132
196
2006: Intercytex, Renovo; Syntopix; Phynova;
2005: Ardana
2004: York Pharma; Ark Therapeutics; Eirx Therapeutics;
So how is this feeding through to early stage
life sciences?
•
•
•
BioCity’s 2014 life science start-up report
Data from UK start ups 2005-2013
• Research-based (not consultancies)
• Not a subsidiary
• With a web presence (evidence of more than just a registered entity)
Information on:
• When founded
• Sub sector
• Investment
• location
Start-up activity increasing
UK Life Science Start-ups
325
320
315
310
305
300
295
290
285
280
275
2005-2009
2006-2010
2007-2011
2008-2012
2009-2013
University Spin-out activity still declining
University v non-university start-ups
100%
90%
80%
70%
Non-university
60%
50%
40%
30%
20%
University
10%
0%
2005-2009
2006-2010
2007-2011
UK-University spin-outs
2008-2012
UK-Non-university
2009-13
Start-up Activity in North West Holding Steady
70
60
50
2005-2009
40
2006-2010
2007-2011
30
2008-2012
20
2009-2013
10
0
South Scotland London
East
East
North
East
Wales
West Midlands
South Yorkshire West
North N Ireland
West
Midlands East
Untapped potential in the North West?
LS Resch Power Vs Start ups- % UK Total Excl
London
25%
20%
15%
10%
5%
0%
% LS Research Power
% UK Start ups
Total Investment Flat
Investment Raised (£M)
410
400
390
380
370
360
350
340
330
320
310
2005-2009
2006-2010
2007-2011
2008-2012
2009-13
But- 2008- Crescendo, Vantia, F-Star= £88M, dropped out of 2009-13 figures
Investment Biased to South East…
…but North West share improving
2009-2013
2008-2012
% total start ups
% total start ups
% total investment
73%
% total investment
71%
57%
53%
47%
43%
29%
27%
9%
East,SE, London
Rest of UK
9%
5%
NW
East,SE, London
Rest of UK
7%
NW
Government Funding Industry
Biomedical Catalyst AwardsRound 1 (£'000)
£12,000
£10,000
Biomedical Catalyst AwardsRound 1
80%
£8,000
£6,000
£4,000
20%
£2,000
£0
London/South East/East
Rest of England & Wales
Gaps to fill
• VC backed start up activity has room to grow
• Ref USA- approx. 120 VC backed Biotechs start each year
• US population approx. 5x that of UK, so therefore, pro-rata would expect
about 24 new VC backed biotechs each year- we see about 15
• Still not enough funding available for life science start ups- esp. outside South
East
• Need to garner bigger share of government research funding
• NW poorly represented in seed funding- need greater access
North West poorly represented in seed funding
All sectors
TOP SEED FUNDS UK 2013
Fund
Crowdcube
Scottish co-investment fund
North East Angel Fund
Imperial Innovations
Early Advantage Fund
Jenson Seed EIS Fund
Mercia Seed Fund
Location
National
Scotland
North East
London
Midlands/South
National
Midlands/South
Deals 2013
22
12
9
8
7
7
7
TOP VENTURE INVESTORS UK 2013
Fund
Scottish co-investment fund
Crowdcube
MMC Ventures
North West Fund for Venture Capital
Angel Co-fund
Location
Scotland
National
National
North West
National
Deals 2013
20
9
9
9
8
Source: growthbusiness.co.uk
Key Trends
•
•
•
•
•
•
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Changes in pharma landscape only at stage one
Significant opportunities outside standard drug discovery model
Start-up activity on the turn…
…with investment just starting to catch up
…but still focused on South East- opportunity or reality?
IPO window starting to open…
…but not clear how wide
…need to make sure history doesn’t repeat itself
• But overall more positive than for many years……