There was jubilation a year ago when Scotland’s life sciences sector reported a £1 billion increase in turnover to £5.2bn – a significant increase which made the challenging £8bn turnover by 2025 target seem attainable.
The 2019 figures from the Office of National Statistics are imminent and while no-one wants to presume anything, the signs look positive for continued growth. With 7 per cent annual growth needed to meet the £8bn target, there is real optimism.
“We have managed to keep up the momentum; there is no gloom or negativity – and when it comes to innovation, we are knocking it out of the park,” says Dave Tudor, chair of the Life Sciences Scotland Industry Leadership Group (LSSILG). “It’s tough trying to keep up with the scale and speed of innovation; some of the joint academic/NHS research taking place is mind-blowing, whether it’s linked to diabetes, respiratory conditions or precision medicine.”
Ivan McKee, Minister for Trade, Investment and Innovation, says there has been “substantial growth” in partnership arrangements between the life sciences sector, NHS and academia.
He describes life sciences as “a buoyant and vital component of the Scottish economy” and agrees with Tudor on innovation: “A key indicator in how a sector is performing is evidenced by the level of innovation we see and the sector continues to punch above its weight, accounting for around one quarter of Scotland’s business expenditure on research and development.
“I remain confident in achieving our shared ambition of reaching £8bn turnover by 2025.
“More and more companies, and importantly our Scottish SMEs, are consistently attracting investment in that critical period of scaling up. We’ve seen companies such as MedAnnex securing funds to accelerate R&D activity, Calcivis seeking to break into the US market and EnteroBiotix also raising investment to establish a presence in the US.”
Tudor also sees a healthy investment climate: “There is a steady stream of investment and a very positive vibe. When I take my temperature checks from the sector, I am hearing stories of growth and opportunity, not an approach based on mitigating risk.”
The big risk factor for life sciences in recent times has been the potential impact of Brexit. McKee says the sector is particularly vulnerable: “Industry has directly reported on the many critical aspects of this including regulation, imposed tariffs and implications for the movement of goods and services, the risk to research and collaboration and access to EU funding, and the barriers it will present to attracting and retaining the highly skilled talent from across Europe, for which Scotland is home to so many.
“The effect of Brexit will also have long-term implications preventing student mobility, access to research funding and damaging Scotland’s world class reputation in so many fields of research.”
Yet Tudor believes that Brexit concerns have largely been overridden by the general positivity and can-do attitude across the life sciences sector: “I know there are concerns about Brexit and for companies providing a service, for example a firm carrying out clinical trials, there are challenges in maintaining that service in changing circumstances.
“However, generally speaking, people are accepting it and getting on with it.”
Alix Mackay, who chairs the LSSILG marketing and communications group, agrees and sees a real sense of ambition in the sector. “Two or three years ago, there was a lot of talk about Scotland not being ambitious enough; you don’t hear that now,” says Mackay, who will chair next month’s annual Life Sciences Scotland conference.
“I talk to lots of businesses wanting to grow, to sell more goods and find more customers; they are not just satisfied with existing markets.”
Scotland has been second only to London in six of the last seven years in terms of foreign direct investment (FDI) into the regions of the UK, according to the annual EY Attractiveness Survey, with 94 FDI projects recorded in 2018.
As well as inward investment, the confidence of life sciences companies is driving greater export ambition, especially to the US, largely driven by high-quality R&D. Rather than complaining about a lack of venture capital in Scotland, life sciences businesses have greater confidence to look further afield for investment – whether it be London, Paris, Boston or elsewhere.
Mackay says “innovative models and deeper collaborations” are emerging as Scottish businesses look globally for growth opportunities.
She highlights Stirling-based Symbiosis (which “supports biotech and speciality pharmaceutical companies worldwide that require small-scale injectable products”) for building strong markets in Europe and North America, while Synpromics – whose technology allows genes to be switched on and off to help develop cures to major genetic diseases such as haemophilia – has the majority of its clients in the US and was acquired by American company AskBio in August.
In addition to companies looking abroad and forming innovative partnerships, the value of funds raised by growth-hungry Scottish life sciences businesses is more regularly running into the millions.
Glasgow-based biotech business 3F Bio, along with its partners, secured €17 million of European Commission funding for its protein biorefinery in July, while Calcivis, the Edinburgh medical devices firm, raised £4.5 million last month to bring a “game-changing” dental system to the US market. EnteroBiotix, based in Aberdeen, secured £2m seed extension investment in May, strengthening its leadership position in microbiome therapeutics and opening a new office in Boston, Massachusetts.
“Companies are looking to raise more and that is fuelling ambition and momentum,” says Tudor. “We are fully engaged with Ivan McKee’s revamping of the export strategy for Scotland.”
McKee himself says: “I have seen first-hand the level of ambition and desire within companies to succeed internationally. The Scottish Government shares this ethos and has set an ambitious target
of increasing the share of Scotland’s GDP from international exports to 25 per cent.”
With 40,000 people working in life sciences in Scotland – across 770 disparate organisations, including 675 private enterprises – engaging the whole workforce in the digital agenda and promoting strong leadership is crucial to future growth, Dave Tudor insists.
Demystifying Digital for Business Leaders has run three courses for life sciences leaders, and Tudor says it is enjoying “positive engagement and attendance”.
“This is an example where Life Sciences Scotland is delivering and educating,” he adds.
“However, although some businesses get it, for others it is a slow awakening. I think digital is a concerted effort over three to five years to drive cultural change in our sector. If 2018-19 is year-one, we have made a good start, but we are nowhere near the finished article.
“If we can do digital right [see panel], companies can get productivity gains, compliance benefits and morale improvements and the whole sector will benefit massively.”
Ivan McKee says that the Scottish Government is providing digital support across all sectors through the national Digital Boost Programme and also the new £2m
Digital Development Loan.
Tudor is also pleased to see a new generation of sector leaders emerging as the fourth Life and Chemical Sciences Leadership Masterclass recruits a new cohort.
“As a leadership product, I think it has landed well and is continuing to add value,” he says.
Tudor is very keen to see life sciences leaders playing a bigger role in developing the sector, saying: “I want them to focus on not just their own business, but developing the broader sector and looking to serve patients – by thinking about macroeconomic, political and healthcare considerations and not just making money.
“It is also crucial for any growing business to have an understanding of the market and a growth plan – and a plan to develop the workforce of the future in terms of technology and digital know-how.”
He goes on to highlight three businesses – and leaders – which he thinks are doing particularly well: Mike Leek at TC BioPharm, David Bunton of ReproCELL Europe (formerly Biopta) and Mark Cook of Medtronic.
“They all deliver what they say they will deliver,” says Tudor. “They are making things happen. They are delivering on their growth plans. They understand the value of engaging with the wider ecosystem, to look at the big picture and to help the sector. They have reached a level of maturity.”
Looking forward, what are Tudor’s hopes for 2020 for the life sciences sector in Scotland? “I want to see continued meaningful collaboration and connectivity – and clear evidence of delivery on some of our big-ticket items such as Precision Medicine, the Medicines Manufacturing Innovation Centre [see panel], Academic Health Partnerships and Electronic Patient Records. I also want to see continued growth across all sub-sectors.”
Key areas for consideration
How has the life sciences sector progressed in the last 12 months in the four key areas of focus set out in the Life Sciences Strategy?
The Medicines Manufacturing Innovation Centre has started work and the new building will begin to take shape early
Another 16 leaders went through the Life and Chemical Sciences Leadership Masterclass – and a series of ‘Demystifying Digital’ workshops proved popular.
INNOVATION AND COMMERCIALISATION
Academic Health Science Partnerships (AHSPs) are progressing towards a more consistent approach, with the aim of a network of geographic AHSPs within a single national model. “We understand the value of Academic Health Partnerships and the Triple Helix and we are making good progress, but looking at how we can be more consistent to get the fastest and easiest route to patient benefit,” says Dave Tudor. “It’s about identifying patient need and working back to make it happen.”
Models are being developed to facilitate access to Scotland’s bio-repositories – giving access to human tissue to support companies doing research. If tissue is removed during an operation and appropriate consents are given, it can be made available for research and safety testing; the move is towards a single, professional bio-repository model.
The Life Sciences Scotland Industry Leadership Group (LSSILG) is supporting the Scottish Government’s new export strategy. It has worked alongside government economists to discuss and explore the specific export potential for life sciences. The industry supports Scottish Enterprise’s aim of hugely increasing its GlobalScot numbers, from 200 to 6000. Ivan McKee, Minister for Trade, Investment and Innovation, says: “Our approach to the Export Growth Plan sets out the evidence and actions needed to put Scotland on a path to grow exports in real terms, expand our network of GlobalScots and deploy in-market specialists [to identify] the greatest opportunity.”
Progress has been made towards a Single National Formulary, to revise the approvals process and ensure full access to a range of new treatments for prescription – using real-world evidence to make the whole process better.
This article first appeared in The Scotsman’s Life Sciences 2019.