Research collaboration 'vital', Scots biotechnology companies are told

SCOTTISH biotech firms face an increasingly difficult environment and must share research costs if they are to survive, warns a new report today.

• Laboratories are facing a tough time securing investment, the PwC report says Picture: Getty Images

The study, from accountancy firm PricewaterhouseCoopers (PwC), claims that the current model supporting companies developing medicines and medical devices is "flawed". Increasingly, cautious investors have put the brakes on supporting firms in the sector, while emerging economies have begun to compete in the field more aggressively.

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PwC said that while Scottish biotech firms receive 400 million of annual investment, funding was a "key challenge".

The industry north of the Border has more than 600 companies and organisations, representing 15 per cent of the UK total and employing more than 31,000 people. But PwC recommends greater collaboration between them, which would mean sharing assets and research. It also advises investors to take a longer-term view on rates of return.

Martin Cowie, biotech and life sciences specialist at PwC Scotland, said: "The flaws in the current biotech business model have become visible, and if the industry is to maintain momentum and stop the tide turning, then change is needed.

"Many of the external conditions that previously allowed companies to flourish are disappearing, and coupled with poor rates of return and scarce routes for investment, it has meant a tough environment for Scottish firms.

"If the industry is to unlock the potential that is undoubtedly out there, then it is not just a matter of being more efficient, a more collaborative approach is also required. This can accelerate and facilitate innovation, and discovery and development, which in turn can reduce costs and benefit both large and smaller companies. Even small changes could yield significant savings."

Cowie noted that the industry was undergoing a period of significant change, with many experts predicting the end of "blockbuster" drugs and a move towards personalised patient medicine.

"This provides the Scottish bioscience industry with fantastic opportunities such as development of more effective and cost-efficient medicines," he said. "There are some considerable cultural, behavioural and practical hurdles to overcome; however, they are well worth resolving given the rewards collaboration can bring. Those that adapt quickest will invariably have more chance of success."

The report comes as Edinburgh Bioquarter, Scotland's flagship life-science research and real estate venture, announces a competition aimed at research teams at the University of Edinburgh and staff at NHS Lothian.The Innovation Competition 2011, based on a successful model run at the Massachusetts Institute of Technology, will offer prizes worth a total of 45,000 in three rounds, with the winners of ten 1,000 prizes being put forward for five second-round prizes of 2,000 each. Second-round winners then have the chance to win a 10,000 business creation prize.

The winners of this prize can also apply for matched funding from Scottish Enterprise's Smart scheme.

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