Brex­it who? Record in­vest­ment last year fu­els big spike in reg­is­tered UK biotech firms

LON­DON — Af­ter Britain nar­row­ly signed up to leave the Eu­ro­pean Union in June 2016, the prog­no­sis for in­dus­try was pro­ject­ed to be grim. A new analy­sis sug­gests that UK biotech has es­caped that noose — and in­deed flour­ished — over the pe­ri­od that the di­vorce terms were meant to be for­mu­lat­ed.

By an­a­lyz­ing da­ta from the Com­pa­nies House reg­is­ter — a place where in­for­ma­tion about firms reg­is­tered in the UK is made pub­licly avail­able by the gov­ern­ment —  Lon­don-based in­vest­ment man­ag­er Down­ing found that 3,456 ac­tive com­pa­nies are cur­rent­ly in­volved in biotech­nol­o­gy R&D ac­tiv­i­ties, a stag­ger­ing 65% in­crease from 2,095 such firms in the first quar­ter of 2016.

Some 44% of ac­tive biotech­nol­o­gy busi­ness­es have been in­cor­po­rat­ed in the three years since Jan­u­ary 2016 — in­clud­ing 127 in the first two months of 2019, or rough­ly three every work­ing day in Jan­u­ary and Feb­ru­ary, the analy­sis sug­gest­ed.

The surge has been sup­port­ed by record in­vest­ment in UK biotech 2018 — a £2.2 bil­lion in­jec­tion, up  85% from 2017 (with ven­ture cap­i­tal con­tribut­ing to more than half of UK biotech fund­ing: from £681 mil­lion in 2016 to £1.1 bil­lion in 2018), Down­ing said, cit­ing UK BioIn­dus­try As­so­ci­a­tion and In­for­ma Phar­ma In­tel­li­gence da­ta.

Al­though pri­vate firms ac­count for the bulk of UK biotech (96% as of Q1 2019), the num­ber of pub­licly list­ed com­pa­nies are al­so grow­ing (from 30 in Q1 2016 to 42 in Q1 2019), Down­ing found.

“So not on­ly are there a lot of new com­pa­nies be­ing es­tab­lished, the fund­ing is grow­ing across ar­eas as well…from 2017, Se­ries A, Se­ries B and post Se­ries B have all in­creased quite dra­mat­i­cal­ly, es­pe­cial­ly at se­ries B and a lat­er stage, which is a sign that the health­care, health tech­nol­o­gy and biotech­nol­o­gy mar­ket (in the UK) is ac­tu­al­ly ma­tur­ing,” said Will Brooks, who di­rects the health­care ac­tiv­i­ties for Down­ing’s ven­ture funds, in an in­ter­view with End­points News.

“The fund­ing has dou­bled for Se­ries A, more than dou­bled for Se­ries B and post Se­ries B…and peo­ple see that the ma­tu­ri­ty of the com­pa­nies is chang­ing — its no longer be­ing led by a huge num­ber of small com­pa­nies strug­gling for cap­i­tal. I think there seems to be more ap­petite for con­tin­u­al fund­ing, and al­so var­i­ous dif­fer­ent ex­it routes, from M&A to the pub­lic mar­ket…I think that cre­ates a con­fi­dence fac­tor in the fi­nan­cial com­mu­ni­ty.”

Brooks sug­gest­ed ge­net­ics-fo­cused firms, dig­i­tal health com­pa­nies and those in­volved in health­care-re­lat­ed da­ta min­ing for screen­ing, drug de­vel­op­ment, and dis­ease eti­ol­o­gy are the ones gar­ner­ing sig­nif­i­cant in­ter­est. Along­side, the larg­er phar­ma­ceu­ti­cal com­pa­nies are now see­ing more val­ue in ear­ly stage tech­nolo­gies, which is trig­ger­ing M&A, he said.

Ge­net­ics and big da­ta-fo­cused deals are all the rage across both sides of the At­lantic. Apart from the slate of re­cent deals bet­ting on gene ther­a­pies, As­traZeneca has sharp­ened its fo­cus on ge­nomics by pour­ing its R&D re­sources in­to a new cen­ter in part­ner­ship with Can­cer Re­search UK to de­vel­op per­son­al­ized can­cer drugs. Fel­low British drug­mak­er GSK $GSK, has tied up with 23andMe to gain ac­cess to the lat­ter’s data­base — to look for dis­ease rel­e­vant genes. Re­gen­eron $REGN has carved out its own ge­net­ics cen­tre, Am­gen $AMGN is delv­ing deep­er to iden­ti­fy and val­i­date dis­ease tar­gets with its in­vest­ment in Ox­ford Nanopore Tech­nolo­gies and ac­qui­si­tion of de­CODE ge­net­ics, while Ver­tex $VRTX has part­nered with UK-based Ge­nomics plc on their plat­form for ge­net­ics and ma­chine learn­ing.

With a surge in biotech busi­ness and in­vest­ment comes an uptick in hir­ing.

De­mand for work­ers with­in the larg­er UK life sci­ences in­dus­try jumped by 11% last year, ac­cord­ing to da­ta com­piled for the As­so­ci­a­tion of Pro­fes­sion­al Staffing Com­pa­nies (AP­SCo). Clin­i­cal va­can­cies rose the high­est, with an in­crease of 37%, while de­mand for R&D per­son­nel re­mained rel­a­tive­ly flat at 4.6%. Over­all, phar­ma­ceu­ti­cal firms con­tin­ued to of­fer the li­on’s share of work op­por­tu­ni­ties, al­though CRO job open­ings saw a steep spike of 25.6%.

Sy­neos Health is now the largest sin­gle re­cruiter for sci­en­tif­ic roles in the UK, while IQVIA and GSK are al­so dri­ving sig­nif­i­cant de­mand for tal­ent, with va­can­cies at these firms in­creas­ing by 81% and 14% re­spec­tive­ly, ac­cord­ing to the analy­sis.

Ann Swain

“De­spite un­cer­tain­ty sur­round­ing Brex­it, the strength of the UK phar­ma sec­tor has been thriv­ing over the past year, with clin­i­cal va­can­cies show­ing ex­treme­ly pos­i­tive growth. Glob­al test­ing vol­umes are ris­ing due to an age­ing pop­u­la­tion, sur­plus in man­age­ment of dis­eases, and in­creased ac­cess to care. This rea­son, and the fact that the UK is home to three of the top five uni­ver­si­ties for pre-clin­i­cal, clin­i­cal and health sci­ences, ex­plains why there is such a high de­mand for pro­fes­sion­als in this sec­tor,” AP­SCo chief Ann Swain said in a state­ment.

But a Glob­al­Da­ta sur­vey pub­lished last No­vem­ber in­di­cat­ed damp­en­ing en­thu­si­asm for the sec­tor —  a mere 23% of health­care pro­fes­sion­als sur­veyed across the US, UK, and EU thought that the UK would be an at­trac­tive des­ti­na­tion for health­care com­pa­nies to con­duct re­search and man­u­fac­tur­ing fol­low­ing Brex­it.

“The Brex­it ef­fect has not re­al­ly fun­neled through — in terms of fund­ing — for com­pa­nies on the pure­play fi­nan­cial lev­el. Where it may have an im­pact is on the abil­i­ty to ac­cess re­search fund­ing and re­search grants through the Eu­ro­pean fund­ing agen­cies — I think that will have a knock on ef­fect in the fu­ture, but it’s not re­al­ly sig­nif­i­cant just now,” said Brooks.

All things con­sid­ered, the fu­ture for UK biotech looks bright — bar­ring an un­fore­seen macro event, he added.

“For now there’s a de­gree of con­fi­dence in the sec­tor, I think peo­ple are un­der­stand­ing it bet­ter. The biotech mar­ket has now been go­ing for 25-30 years, and I think now you’re get­ting a ma­tu­ri­ty amongst the in­vestors, that they un­der­stand what they’re ac­tu­al­ly do­ing. More flex­i­ble in­vest­ment prod­ucts are com­ing up as well, mak­ing it eas­i­er for com­pa­nies to fund them­selves. I think you’ll see an in­crease in ac­tu­al fund­ing round sizes and a con­tin­u­al stream of com­pa­nies mov­ing from seed cap­i­tal to fund­ing rounds.”

De­vel­op­ment of the Next Gen­er­a­tion NKG2D CAR T-cell Man­u­fac­tur­ing Process

Celyad’s view on developing and delivering a CAR T-cell therapy with multi-tumor specificity combined with cell manufacturing success
Overview
Transitioning potential therapeutic assets from academia into the commercial environment is an exercise that is largely underappreciated by stakeholders, except for drug developers themselves. The promise of preclinical or early clinical results drives enthusiasm, but the pragmatic delivery of a therapy outside of small, local testing is most often a major challenge for drug developers especially, including among other things, the manufacturing challenges that surround the production of just-in-time and personalized autologous cell therapy products.

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The French pharma giant announced early Monday that it is snagging San Diego biotech Synthorx in a $2.5 billion deal. That marks an affordable bolt-on for Sanofi but a considerable return for Synthorx backers, including Avalon, RA Capital and OrbiMed: At $68 per share, the price represents a 172% premium to Friday’s closing.

Synthorx’s take on alternative IL-2 drugs for both cancer and autoimmune disorders — enabled by a synthetic DNA base pair pioneered by Scripps professor Floyd Romesberg — “fits perfectly” with the kind of innovation that he wants at Sanofi, Hudson said.

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Merck is scooping up a next-gen BTK drug — which is making a splash at ASH today — from ArQule in an M&A pact set at $20 a share $ARQL. That’s more than twice Friday’s $9.66 close. And Merck R&D chief Roger Perlmutter heralded a deal that nets “multiple clinical-stage oral kinase inhibitors.”

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ObsEva in-licensed the drug, linzagolix, from Japan’s Kissei Pharmaceutical in 2015. Two doses of the drug (100 mg and 200 mg) were tested against a placebo in the 535-patient Phase III study, dubbed PRIMROSE 2, in patients who were both on and off hormonal add-back therapy (ABT).

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J&J's Mathai Mammen at an Endpoints News event in Boston, June 2018 (Photo: Rob Tannenbaum for Endpoints News)

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Jake Van Naarden, Josh Bilenker, Nisha Nanda (Credit: Loxo, Aisling Capital)

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So what are they doing?

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