Practical Advice

The UK Biotechnology Sector – the World’s Best Environment for Establishing New Companies

About the Author

Steve Bates

Chief Executive Officer, BioIndustry Association

The UK has the strongest bioscience cluster in Europe. Last year the BioIndustry Association (BIA) published a report with EY which shows that on key indicators – pipeline, investment capital raised, environment to start a company and innovative funding – the UK leads the continent.

There are more than 1000 companies in the UK medical biotechnology sector of which 360 are active in research and development. EY’s research shows that the UK has the largest bioscience pipeline of any cluster outside the U.S. with over 400 product candidates in development in 2012. Only three regions in North America and Europe have more: New England, San Francisco Bay area and San Diego. The UK leads in Europe with Germany and Switzerland filling the next two positions.

During the financial crisis the number of companies in the UK remained flat. However, it is now showing signs of growth as the UK is recognized as having the best environment in the world for establishing new companies. In March there was also the first biotech stock market launch for a number of years and one of the largest ever – with Oxford-based Circassia raising $330 million.

The enabling environment for bioscience companies in the UK is helped by a number of government measures such as R&D tax credits, the Biomedical Catalyst, the Patent Box, low corporation tax rates and the Early Access to Medicines Scheme – all issues that have been advocated for by the BIA over a number of years.

R&D tax credits are designed to encourage companies to invest in research and development. In 2012 the R&D tax credit relief for small and medium sized companies rose to 225 percent of costs and the income tax/national insurance cap was removed which allows companies that externalize their research to benefit from the scheme. For larger companies the government introduced an above-the-line R&D tax credit of 10 percent in 2013 and from April 2014 the rate of the payable credit to loss-making SMEs increases from 11 to 14.5 percent.

Professors Richard Kitney and Paul Freemont

Professors Richard Kitney and Paul Freemont lead the SynbiCITE center at Imperial College London
(Thomas Angus Photography and Imperial College London)

The Biomedical Catalyst, a transformative stimulus scheme for SME life science companies, was introduced by the government as one of the key initiatives of its Strategy for UK Life Sciences in 2012. The scheme, which has been well received by companies across the bioscience sector, provides matched funding to help address proof of concept projects and to help companies across the so-called “valley of death”. To date more than 100 business-led projects in the UK are now accelerating the translation of innovative scientific and medical research into therapies, in areas such as anti.microbial resistance, innovative cancer treatments and novel approaches to manufacturing of advanced therapies, that can be used by patients and sold around the globe.

The Patent Box, which was introduced in 2013, allows innovative companies in the UK to benefit from a reduced corporation tax rate of 10 percent on profits from patents and certain other forms of qualifying intellectual property. The Patent Box provides an incentive for companies – including those in life sciences – to exploit their intellectual property in the UK and should make the UK a prime location for investment in R&D and manufacturing.

From April 2014 Corporation tax in the UK stands at 21 percent and it will be further reduced to 20 percent in April 2015, which the government says is the lowest of any major economy in the world.

This year the government has introduced an Early Access to Medicines Scheme (EAMS) which aims to speed the progress of medicines to address unmet medical need to patients using an “all hands on deck” approach from the regulators and health service. The government envisages a three stage process. First, a Promising Innovative Medicine (PIM) designation, based on early clinical data, would provide an early indication that a product may be a possible candidate for the EAMS. Second, the developer would apply to the Medicines and Healthcare Products Regulatory Agency (MHRA) for an Early Access to Medicines opinion on the basis of phase II or phase III studies. A positive opinion would allow patients earlier access to the product – outside of a clinical trial. The third stage is the introduction of a new NICE technology appraisal and NHS England Commissioning process for products in the EAMS when they get a marketing authorization.

As well as these measures to support the businesses of today, the government has an active industrial policy to support the businesses of the future. It has identified “eight great technologies” which it believes will provide the backbone for the next generation of high growth companies.

Two of these technologies, synthetic biology and regenerative medicine, have the potential to impact the health biotechnology sector in the UK.

Dust Mites

Oxford-based Circassia are developing treatments for cat and house dust mite allergies (Circassia Ltd)


Synthetic biology is a relatively emerging concept in biotechnology where engineering principles are used in the design and construction of biological devices and systems to perform specific tasks. These tasks include the production of base chemicals and plastics using biological starting materials rather than fossil fuels, active pharmaceutical or food ingredients, or energy from biological fuel sources.

In 2012 the government published a synthetic biology road map and established a new Synthetic Biology Leadership Council, which is co-chaired by David Willetts, the Minister for Universities and Science, and Lionel Clarke of Shell. The road map set out a vision for a synthetic biology sector in the UK that is economically vibrant, diverse and sustainable, leading scientific advances, with a resilient platform of underpinning technologies and of clear public benefit.

To help deliver on this vision the government has committed to research funding investments in synthetic biology. The research councils and the Technology Strategy Board (TSB) are spending over $150 million on world leading synthetic biology research and commercialization. $83 million of this will be used to support implementation of key recommendations from the synthetic biology roadmap by establishing multidisciplinary research centers and a seed fund to support start-up companies and ‘pre-companies’. In January, the Biotechnology and Biological Sciences Research Council (BBSRC) and the Engineering and Physical Sciences Research Council (EPSRC) announced that three new multidisciplinary research centers in synthetic biology will be established – in Bristol, Nottingham and through a Cambridge/ Norwich partnership.

In 2013 an Innovation and Knowledge Centre in Synthetic Biology, SynbiCITE, was established at Imperial College in London. With funding from the EPSRC, the BBSRC, the TSB and industry, SynbiCITE aims to provide a bridge between academia and industry to speed up the development of new technologies in synthetic biology. The center will be a national resource, involving researchers from a further 17 universities and academic institutions across the UK as well as 13 industrial partners.

Synthetic biology companies in the UK will also be able to benefit from the $75 million Industrial Biotechnology Catalyst which has been established by the BBSRC, the TSB and the EPSRC. Modeled on the Biomedical Catalyst, the Industrial Biotechnology Catalyst will address the major challenges using biological processes, or processes in which biological and chemical approaches are used in combination.


Regenerative medicine is another up-and-coming area of bioscience. It involves restoring normal function by replacing or restoring human cells, tissues or organs through transplantation; stimulation of the body’s own self-repair mechanisms; or the development of biomaterials for structural repairs.

The Research Councils and TSB published their strategy for UK regenerative medicine in 2012. The government also committed over $40 million for the UK Regenerative Medicine Platform (UKRMP), which is establishing multidisciplinary programs to address the key roadblocks in developing therapies in this area, and $125 million for translational research.

The UKRMP brings together BBSRC, EPSRC and Medical Research Council (MRC) regenerative medicine research to ensure it connects seamlessly from discovery science through to clinical and commercial application. To this end the UKRMP operates in close cooperation with the Cell Therapy Catapult.

The Cell Therapy Catapult, which was established by the Technology Strategy Board in 2012, is a center of excellence for cell therapy. It is working to create a vibrant cell therapy industry in the UK, and has a team of 70 business, clinical and manufacturing experts working in collaboration with the cell therapy community to advance products. It moved recently into a world-leading laboratory and office facility at Guy’s Hospital in London. The Cell Therapy Catapult operates in the translational phase of development, helping developers convert cell therapies from early-stage research into investible projects with real commercial potential. The recent announcement of a $90 million Cell Therapy Manufacturing Centre, which will be a subsidiary of the Catapult and is due to open in 2016/17, further cements the UK’s position as a leader in cell therapies.

With government’s support for academic, clinical, translational, and industrial research and development coupled with the UK’s strong science base, knowledgeable investors, and skilled workforce and management, it is easy to see why the UK is recognized as one of the world’s leading locations for biotech companies.


Further Information

Steve Bates joined the BioIndustry Association (BIA) as its Chief Executive Officer in July 2012. Since then the BIA membership has grown 25 percent and it has hosted its most successful gala dinner.

On behalf of the sector, Steve has championed the refilling of the Biomedical Catalyst, the improvements to the R&D tax credits system and the establishment of the National Biologics Manufacturing Centre. Steve has led the BIA campaigns for improved access to finance for the sector through initiatives such as Citizens’ Innovation Funds. He attends the Ministerial Industry Strategy Group, EuropaBio’s National Association Council and was a member of the MHRA Expert Group on Innovation in Regulation.

Steve is an expert commentator on the sector for traditional and online media including the Financial Times, Wall Street Journal and Bloomberg, BBC radio and television and Sky News, and is a regular presenter at industry-leading conferences.

He has worked both in biotech and the highest levels of UK government for over 15 years. He was Senior Director, External Affairs and Market Access at Genzyme UK and Ireland, during which time he worked on the establishment of the government’s Office for Life Sciences and was a member of the BIA’s Communications Advisory Committee. Prior to joining the industry Steve was special advisor to John Reid MP in his time as Home Secretary, Secretary of State for Health, Northern Ireland Secretary and Defence Secretary and helped deliver policy initiatives as diverse as “Our inheritance, our future: realizing the potential of genetics in the NHS 2003” to the implementation of the Serious Organised Crime Act of 2005.

Earlier in his career Steve led the Labour Party media team into the general election of 2001 and was formerly a broadcast business journalist at Dow Jones and ITN. Steve is a Cambridge University graduate.


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