When Chan­cel­lor of the Ex­che­quer Je­re­my Hunt an­nounced that he had plans to scale back R&D tax cred­its in No­vem­ber, it sparked back­lash in a coun­try that has seen a de­cline in clin­i­cal tri­als and drug pric­ing ques­tion marks.

But Hunt, the for­mer UK health sec­re­tary, said to­day in his Spring 2023 bud­get speech that he had re­turned with a “more ro­bust” R&D tax cred­it scheme.

Part of that is an “en­hanced cred­it” for qual­i­fy­ing small- or medi­um-sized bio­phar­ma busi­ness­es. If a com­pa­ny spends 40% or more of its to­tal ex­pen­di­ture on R&D, it can claim a cred­it worth £27 for every £100 they spend, as well as a £1.8 bil­lion sup­port pack­age for 20,000 com­pa­nies.

“That means an el­i­gi­ble can­cer drug com­pa­ny spend­ing £2 mil­lion on re­search and de­vel­op­ment will re­ceive over £500,000 to help them de­vel­op break­through treat­ments,” Hunt said.

The chan­cel­lor al­so turned to drug reg­u­la­tion re­form.

Start­ing in 2024, the Med­i­cines and Health­care prod­ucts Reg­u­la­to­ry Agency (MHRA) will get an ex­tra £10 mil­lion in fund­ing over the next two years and be able to have “rapid, of­ten near au­to­mat­ic sign off” for med­i­cines al­ready OK’d by reg­u­la­tors in the US, Eu­rope or Japan. The reg­u­la­tor hint­ed at such a move last month, say­ing rec­i­p­ro­cal ap­provals with the FDA, EMA and PM­DA could be­gin next year, al­though some crit­ics have warned of a race to the bot­tom.

“We are proud of our life sci­ences sec­tor, which re­ceived more in­ward in­vest­ment than any in Eu­rope last year,” Hunt added. “To­day’s change will make the UK an even more ex­cit­ing place to in­vest — as well as speed­ing up ac­cess for NHS pa­tients to the very newest drugs.”

Richard Tor­bett

It’s a turn for the bet­ter, ABPI chief ex­ec­u­tive Richard Tor­bett said in a state­ment.

The as­so­ci­a­tion has point­ed out that the UK is falling be­hind in med­i­cine in­no­va­tion af­ter a de­crease in clin­i­cal tri­als; the num­ber of tri­als fell by 41% be­tween 2017 and 2021. Can­cer tri­als fell by the same mar­gin. The UK al­so took a ma­jor hit in the over­all phar­ma­ceu­ti­cal trade bal­ance, go­ing from fourth to 98th place since 2010.

“It is al­so right that the Gov­ern­ment wants the most at­trac­tive pos­si­ble en­vi­ron­ment for in­vest­ment,” Tor­bett said. “Boost­ing in­cen­tives for R&D fo­cused SMEs, along­side the in­tro­duc­tion of ‘full ex­pens­ing’ and a com­pre­hen­sive R&D tax cred­it of­fer, will help achieve this goal for UK life sci­ences.”

Tor­bett ref­er­enced what the as­so­ci­a­tion and Big Phar­ma see as an in­com­ing li­a­bil­i­ty — the pro­posed rev­enue claw­back rate com­ing in April.

Gener­ic drug­mak­er Vi­a­tris said it would stop sell­ing cer­tain drugs in the UK that are in short sup­ply if the vol­un­tary scheme op­tion wasn’t changed. Ear­li­er this year, Eli Lil­ly and Ab­b­Vie ex­it­ed the NHS’ vol­un­tary med­i­cine pric­ing agree­ment af­ter the gov­ern­ment said com­pa­nies with brand­ed med­i­cines un­der the vol­un­tary agree­ment would have to re­turn al­most £3.3 bil­lion in sales rev­enue to the gov­ern­ment.

“But to fur­ther un­lock this po­ten­tial, it is es­sen­tial that a new Vol­un­tary Scheme is agreed be­tween in­dus­try and Gov­ern­ment, which will help build on the Chan­cel­lor’s vi­sion for a glob­al­ly com­pet­i­tive, high growth UK,” Tor­bett added.

Microcap biotech Seelos Therapeutics is halting enrollment of its study in spinocerebellar ataxia type 3 (also known as Machado-Joseph disease) because of “financial considerations,” and in order to focus on other studies, the company said today, adding that the pause would be temporary.

The study will continue with the patients who have already enrolled, and the data from them will be used to decide whether to continue enrolling others in the future.

Otonomy may be shutting down, but the lessons learned there will live on at another biotech working on new treatments for hearing loss.

San Francisco-based Spiral Therapeutics has bought certain assets related to three of Otonomy’s programs, ranging from data, patent rights, and know-how to inventory. That includes data around Otonomy’s twice-failed lead program, OTO-104 (Otividex), a sustained-exposure formulation of dexamethasone.