What’s ahead for UK biotechs in the wake of Brex­it? It's not a pret­ty pic­ture

Seem­ing­ly al­most overnight the sen­ti­ment in the UK over Brex­it changed from Re­main to Leave. That sud­den switch-up leaves the UK’s bio­phar­ma in­dus­try fac­ing a lengthy pe­ri­od of fi­nan­cial and reg­u­la­to­ry un­cer­tain­ty. And biotech, where every­thing is un­cer­tain, hates un­cer­tain­ty.

Of­fi­cial­ly, the biotech in­dus­try quick­ly adopt­ed a clas­sic British at­ti­tude to a cri­sis: Keep calm and car­ry on.

“The life sci­ences sec­tor is a re­silient com­mu­ni­ty, un­fazed by new chal­lenges and staffed by great man­age­ment teams used to work­ing in a glob­al en­vi­ron­ment,” not­ed the UK BioIn­dus­try As­so­ci­a­tion, with con­sid­er­able phlegm. “The fun­da­men­tals of UK bio­science re­main strong. In terms of po­ten­tial new ther­a­pies in the pipeline, the UK is by far the strongest in Eu­rope. But sev­er­al key is­sues for our sec­tor are now in flux.”

These key is­sues in­clude an abrupt change in po­lit­i­cal lead­er­ship, a bank­ing and fi­nan­cial cri­sis, a like­ly eco­nom­ic con­trac­tion with in­fla­tion as the pound drops in val­ue and a brand new reg­u­la­to­ry/re­search sup­port struc­ture to con­sid­er.

In fact, the UK biotech in­dus­try is any­thing but un­fazed. The sec­tor is like­ly to feel the bit­ter winds of po­lit­i­cal change much more than their Big Phar­ma brethren at Glax­o­SmithK­line and As­traZeneca. The glob­al gi­ants are al­ready op­er­at­ing on the world stage, where the FDA and the EMA will con­tin­ue to play the big roles in reg­u­la­to­ry ap­provals (un­less this vote pre­cip­i­tates the end of the EU as more coun­tries go their own way).

That ex­plains why GSK and AZ en­joyed an in­crease in their stock prices to­day. In­vestors love a good port in a storm. The vast ma­jor­i­ty of pub­lic British biotech com­pa­nies, though, wit­nessed sharp drops in their share price as in­vestors fret­ted about their fu­ture.

And there are oth­er con­sid­er­a­tions as well.

One of the key ob­jec­tives of British politi­cians like George Free­man has been to make the UK a bet­ter place for big play­ers to do drug re­search. But that re­quires a pre­dictable reg­u­la­to­ry and re­search en­vi­ron­ment, and that just van­ished. British sci­en­tists are al­so sig­nal­ing deep fears that a ma­jor source of fund­ing is about to van­ish.

The UK biotech in­dus­try is not strong. It has been in re­cov­ery mode for sev­er­al years. But since a se­ries of dis­as­ters af­flict­ed the in­dus­try about 7 years ago, blight­ing gen­er­al­ist in­ter­est in the sec­tor, biotech has been slow­ly on the mend.

More in­vest­ment cash, in­clud­ing a mod­est­ly swelling flow of transat­lantic VC cash along with new in­vest­ments by Neil Wood­ford’s funds, etc, has been back­ing the im­pres­sive aca­d­e­m­ic and in­dus­try spin­outs that have been pop­ping up in re­cent years. Com­pa­nies like Adap­ti­m­mune have gone pub­lic on Nas­daq and the LSE. As­traZeneca, mean­while, has com­mit­ted to keep­ing a large R&D or­ga­ni­za­tion in place around Cam­bridge, af­ter some sig­nif­i­cant down­siz­ing.

Good biotech VCs, mean­while, are built to with­stand an eco­nom­ic down­turn and ques­tions over longterm ex­its. And there are some very deep pock­ets that play in the Gold­en Tri­an­gle, in­clud­ing New En­ter­prise As­so­ci­ates. The LSE had al­ready been large­ly benched as Nas­daq played the court that re­mained in the wake of a sav­age biotech bear mar­ket.

The end of a sin­gle con­ti­nen­tal reg­u­la­to­ry group for drug de­vel­op­ers may ac­tu­al­ly wind up a pos­i­tive for the UK, if they can keep it sim­ple and sup­port­ive.

But there’s no cer­tain­ty about that, and some two years of ne­go­ti­a­tions lie ahead in sep­a­rat­ing the UK from the rest of Eu­rope. Dur­ing that time, you can ex­pect the in­dus­try con­cen­trat­ed in Lon­don, Cam­bridge and Ox­ford to fo­cus more than ever on the U.S. mar­ket, where the reg­u­la­to­ry en­vi­ron­ment has im­proved marked­ly for drug de­vel­op­ers and in­vest­ment mon­ey con­tin­ues to flow.

“In the longer term, it is my view that the tra­jec­to­ry of the UK econ­o­my, and more im­por­tant­ly the world econ­o­my, will not be in­flu­enced sig­nif­i­cant­ly by to­day’s out­come,” not­ed Neil Wood­ford con­fi­dent­ly in a blog post. “Con­se­quent­ly, the port­fo­lio strat­e­gy will not change.”

Wood­ford al­so didn’t change course when his in­vest­ment in North­west Bio ($NWBO) and more re­cent­ly Cir­cas­sia (LSE: $CIR) went sour. But Brex­it is one more dev­il­ish headache that it like­ly to cause the cel­e­brat­ed in­vestor some sec­ond thoughts about mak­ing biotech a cen­tral fo­cus of his funds.

Crises do end. And not all dis­rup­tion is bad. But Brex­it came at a bad time for the UK biotech in­dus­try.

Da­ta Lit­er­a­cy: The Foun­da­tion for Mod­ern Tri­al Ex­e­cu­tion

In 2016, the International Council for Harmonisation (ICH) updated their “Guidelines for Good Clinical Practice.” One key shift was a mandate to implement a risk-based quality management system throughout all stages of a clinical trial, and to take a systematic, prioritized, risk-based approach to clinical trial monitoring—on-site monitoring, remote monitoring, or any combination thereof.

Mer­ck scraps Covid-19 vac­cine pro­grams af­ter they fail to mea­sure up on ef­fi­ca­cy in an­oth­er ma­jor set­back in the glob­al fight

After turning up late to the vaccine development game in the global fight against Covid-19, Merck is now making a quick exit.

The pharma giant is reporting this morning that it’s decided to drop development of 2 vaccines — V590 and V591 — after taking a look at Phase I data that simply don’t measure up to either the natural immune response seen in people exposed to the virus or the vaccines already on or near the market.

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Jean-Christophe-Hyvert, Lonza

Lon­za look­ing to build on 'd­if­fer­en­ti­at­ed ad­van­tage' in Covid-19, CD­MO mar­ket­place in 2021

It’s not new for Lonza, the Swiss CDMO nearing its quasquicentennial anniversary, to be in the upper echelon of the biotech manufacturing industry.

But 2020 — as it was for many CDMOs — was a special year even by Lonza’s standards. The company inked a deal to produce 1 billion worldwide doses of Moderna’s Covid-19 vaccine and tapped pharma vet Pierre-Alain Ruffieux to lead its operations, moves which have allowed Lonza to make a myriad of other deals that will continue to ramp up its global production capacity.

Matt Gline (L) and Vivek Ramaswamy

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Over the past 7 years since founding Roivant, Vivek Ramaswamy has been a constant blur of biotech building motion.

He launched his first biotech with an Alzheimer’s drug he picked up cheap, and watched the experiment implode in one of the highest profile pivotal disasters seen in the last decade. But it didn’t slow the 30-something exec down; if anything, he hit the accelerator. Ramaswamy blazed global paths and went on to raise billions to spur the creation of a large lineup of little Vants promising big things at a fast pace. He sold off a section of the Vant brigade to Sumitomo Dainippon for $3 billion. And more recently the relentless dealmaker has been building a computational discovery arm to add an AI-driven approach to kicking up new programs and companies, supplementing the in-licensing drive while pursuing advances that have created more than 700 jobs at Roivant, with $2 billion in reserves.

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Ron Cooper, Albireo CEO

Al­bireo just ad­vanced down to the 10-yard line at the FDA. And Ron Coop­er’s team is get­ting prepped for the next big play

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Now, after successfully navigating a pivotal study, putting them in a foot race with a rival toward an FDA OK, Cooper is getting a boost from regulators on the last drive back to an arena he understands completely.

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Hal Barron, GSK via YouTube

What does $29B buy you in Big Phar­ma? In Glax­o­SmithK­line’s case, a whole lot of un­com­fort­able ques­tions about the pipeline

Talk about your bad timing.

A little over a week ago, GSK R&D chief Hal Barron marked his third anniversary at the research helm by taking a turn at the virtual podium during JP Morgan to make the case that he and his team had built a valuable late-stage pipeline capable of churning out more than 10 blockbusters in the next 5 years.

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More than five years after Corey Fishman and Michael Dunne dusted sulopenem off Pfizer’s shelves — the second castoff antibiotic they’ve brought out of the pharma giant — and founded Iterum Therapeutics around that single drug, they have lined up a quick shot at approval with priority review from the FDA.

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Immunocore spent much of 2019 dealing with the fallout of the Neil Woodford scandal, as the former star investor’s fall crashed the biotech’s valuation out of unicorn range. Now it turns out that the company spent 2020 dealing with another internal scandal.

The longtime UK biotech darling disclosed in their IPO filing last week that they had fallen victim to an alleged kickback scheme involving one of their employees. After a whistleblower came forward, they said in their F-1, they spent the summer and spring investigating, finding fraud on the part of an employee and two outside vendors.

Stéphane Bancel, Moderna CEO (Steven Ferdman/Getty Images)

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As Merck bows out of the global race to develop vaccines for Covid-19, Moderna is doubling down to make sure they can quell new variants that have recently emerged and quickly spread.

The Cambridge, MA-based biotech put out word on Monday that in vivo studies indicate their mRNA vaccine works well enough against two strains first detected in the UK and South Africa. But with a six-fold reduction in neutralizing titers observed against the latter strain, the company is launching a new study of a booster version to make sure it can do the job.

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