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.”

Hal Barron and Rick Klausner (GSK, Lyell)

Ex­clu­sive: GSK’s Hal Bar­ron al­lies with Rick Klaus­ner’s $600M cell ther­a­py start­up, look­ing to break new ground blitz­ing sol­id tu­mors

LONDON — Chances are, you’ve heard little or nothing about Rick Klausner’s startup Lyell. But that ends now.

Klausner, the former head of the National Cancer Institute, former executive director for global health at the Gates Foundation, co-founder at Juno and one of the leaders in the booming cell therapy field, has brought together one of the most prominent teams of scientists tackling cell therapy 2.0 — highlighted by a quest to bridge a daunting tech gap that separates some profound advances in blood cancers with solid tumors. And today he’s officially adding Hal Barron and GlaxoSmithKline as a major league collaborator which is pitching in a large portion of the $600 million he’s raised in the past year to make that vision a reality.

“We’ve being staying stealth,” Klausner tells me, then adding with a chuckle: “and going back to stealth after this.”

“Cell therapy has a lot of challenges,” notes Barron, the R&D chief at GSK, ticking off the resistance put up by solid tumors to cell therapies, the vein-to-vein time involved in taking immune cells out of patients, engineering them to attack cancer cells, and getting them back in, and more. “Over the years Rick and I talked about how it would be wonderful to take that on as a mission.”

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First place fin­ish: Eli Lil­ly just moved to fran­chise leader with their sec­ond mi­graine drug OK in 1 year

In a rare twist for Eli Lilly’s historically slow-moving R&D group, the pharma giant has seized bragging rights to a first-in-class new drug approval. And all signs point to an aggressive marketing followup as they look to outclass some major franchise rivals hobbled by internal dissension.

The FDA came through with an OK for lasmiditan on Friday evening, branding it as Reyvow and lining it up — once a substance classification comes through from the DEA — for a major market release. The oral drug binds to 5-HT1F receptors and is designed to stop an acute migraine after it starts. That makes it a complementary therapy to their CGRP drug Emgality, which has a statistically significant impact on preventing attacks.

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Allogene HQ Open House on September 17, 2019 in South San Francisco. (Jeff Rumans, Endpoints News)

The next 10 years: Where is biotech head­ed?

The last 10 years have seen a revolution in drug development. Timelines have shortened, particularly in oncology. Regulators have opened up. Investment has skyrocketed. China became a player. Biotechs have multiplied as gene and cell therapy has exploded — offering major new advances in the way diseases are treated, and sometimes cured.

So where are we headed from here? I journeyed out to San Francisco in September to discuss the answer to that question at Allogene’s open house. If the last 10 years have been an eye-opener, what does the next decade hold in store?

Patrick Mahaffy, Getty Images

Court green-lights Clo­vis case af­ter de­tail­ing ev­i­dence the board ‘ig­nored red flags’ on false safe­ty and ef­fi­ca­cy da­ta

Clovis investors have cleared a major hurdle in their long-running case against the board of directors, with a Delaware court making a rare finding that they had a strong enough case against the board to proceed with the action.

In a detailed ruling at the beginning of the month that’s been getting careful scrutiny at firms specializing in biotech and corporate governance, the Delaware Court of Chancery found that the attorneys for the investors had made a careful case that the board — a collection of experts that includes high-profile biotech entrepreneurs, a Harvard professor and well-known investigator as well as Clovis CEO Patrick Mahaffy — repeatedly ignored obvious warnings that Mahaffy’s executive crew was touting inflated, unconfirmed data for their big drug Roci. Serious safety issues were also reportedly overlooked while the company continued a fundraising campaign that brought in more than a half-billion dollars. And that leaves the board open to claims related to their role in the fiasco.

The bottom line:

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Bill Gates backs Gink­go Biowork­s' $350M raise to fu­el the buzzy syn­thet­ic bi­ol­o­gy 'rev­o­lu­tion'

If you want to understand Ginkgo Bioworks, the name should suffice: Bioworks, a spin off “ironworks,” that old industrial linchpin devoted to leveraging scale as a wellspring for vast new industries capable of remaking society. Ginkgo wants to be the ironworks for the revolution it’s heralded with as much fanfare as they can, playing off of one of the buzziest technologies in biotech.

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UCB bags a ri­val to Soliris in $2.1B buy­out deal — but will an in­creas­ing­ly vig­i­lant FTC sign off?

UCB is buying out Ra Pharma $RARX, announcing an acquisition deal that rings up at $48 a share, or $2.1 billion net of cash, and puts them toe-to-toe with Alexion on a clinical showdown.

Ra shares closed at $22.70 on Wednesday.

There’s a small pipeline in play at Ra, but UCB is going for the lead drug — a C5 inhibitor called zilucoplan in Phase III for myasthenia gravis (MG) looking to play rival to Alexion’s Soliris. Soliris has the market advantage, though, with a much earlier approval in MG in late 2017 that UCB feels confident in challenging.

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A new play­er is tak­ing the field in a push for a he­mo­phil­ia A gene ther­a­py, and it’s a big one

BioMarin, the execs at Spark (and buyer-to-be Roche) as well as the Sangamo/Pfizer team have a new rival striding onto the hemophilia block. And it’s a big one.

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Stuck with a PhI­II gene ther­a­py fail­ure at 96 weeks, Gen­Sight prefers the up­beat as­sess­ment

Two years after treatment, the best thing that GenSight Biologics $SIGHT can say about their gene therapy for vision-destroying cases of Leber Hereditary Optic Neuropathy is that it’s just a bit better than a placebo — just maybe because one treatment can cover both eyes.

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George Scangos / Credit: Cornell University

ARCH, Soft­Bank-backed Vir Biotech­nol­o­gy un­der­whelms with $143 mil­lion IPO

George Scangos went back to Wall Street, and came back 700 million pennies short.

Scangos’ vaunted startup Vir Biotechnology raised $143 million in an IPO they hoped would earn $150 million. Shares were priced at $20, the low-end of the $20-$22 target.

Launched with backing from ARCH Venture’s Robert Nelsen, Masayoshi Son’s SoftBank Vision Fund, and the Bill & Melinda Gates Foundation, the infectious disease startup was one of a new wave of well-resourced biotechs that emerged with deep enough coffers to pursue a full R&D line rather than slowly build their case by picking off a single lead program.