(Note: The views expressed below are my own and do not necessarily reflect the views of my employer)


[Additional note added Wednesday 21 March – Daniel Perez of OBR has asked me to remove this post as he belives it to be an attack on OBR. It certainly is not and I am disappointed that he feels it is.]


On Friday I attended the OBR debate “This house believes UK biotech is dead” – such a ridiculous concept that I felt I had to see what arguments were going to be made in proposition of the motion.


Proposing the motion were Martino Picardo, CEO of Stevenage Bioscience Catalyst, Chas Bountra, Chief Scientist of the Structural Genomics Consortium in Oxford, and Daniel Perez, the CEO and founder of Oxbridge Roundtable. In opposition were Anton Hutter, a Partner at IP lawyers Venner Shipley, Morris Berrie, Co-Chair of Tech Transfer Summit Ltd, and serial biotech angel investor Andy Richards. The debate was to take the Oxford Union format.


Sadly, most of the speakers chose not to address the subject of the motion. Indeed, the ridiculousness of the topic was highlighted by the proposers, who failed to raise any arguments to support the debate topic. Indeed their arguments fell into areas which I feel showed a lack of understanding of the current biotech space. 


First, they suggested that collaboration is needed between academia, biotech and pharma. However, this is already happening and almost every biotech company has an alliance with either academia, pharma or both. Second, they suggested that it was still the job of biotech companies to discover, develop and market products themselves and this was simply unaffordable in the current environment. While this model may have been the goal for companies 30 years ago at the birth of the industry, things changed when big pharma woke up to its pipeline issues and the opportunity biotech presented to fill them. The proposers summary was that biotech is too expensive, too risky and there are not the funds to do it.


The motions opposers were little more convincing. They at least focussed in part on the UK and said that UK biotechs were producing IP but that it needed something like the US NIH to validate which potential products have value. One of the opposers quoted 2003 figures about the number of companies in the sector – 250 with 160 products in development. Why he didn’t use the most recent figures, struck me as odd. In 2011 government figures show that there are 325 companies developing therapeutics and over 600 companies providing services to them. These companies have 423 antibody, protein, vaccine or advanced therapy products in development with a similar number of small molecule or blood and tissue products also being developed.


In the audience participation it was suggested that the UK had not created any large firms – Andy countered with Shire – and that there was a high level of failure. I am not sure that there will be many more – if any – large biotech companies being built in future as pharma is rich enough to buy the products or the company at will. As for failure, clinical failure is a reality of drug development and currently only 1 in 11 products makes it through the clinic – and this figure is no worse for the UK than anywhere else. I think that one of the problems in the UK, possibly everywhere but the US, is that companies tend to be focussed around a single product and a product failure can cause the company to go under.


It was only when Andy Richards took the floor to close for the opposers that the actual topic of the debate – whether or not UK biotech is dead – was addressed. He said that in the UK we are great at being negative and cynical. He said there was great concern when the economy crashed in 2008 that many biotech companies would fall – but virtually none did. Andy said the sector here is much more resilient than thought because it has experience and is diverse – in terms of funding, technology and business models. He argued that biotech should not be measured on how much cash is put in, but on the IP, the patient benefits and the cash that comes out of the sector.


His second point was that many people say there have been no successes for UK biotech and that no-one makes money. He thinks this is rubbish and listed some examples. He said that Shire is a £13bn company, BTG is a £1bn company; that companies such as Abcam, Vectura and Astex are sustainable and successful; that the UK has developed products that are delivering patient benefit – Humira, which will soon be the biggest selling drug in the world, Cimzia, Campath, Benlysta and Zytiga; and that world-changing platforms had been developed in the UK such as monoclonal antibodies and Solexa’s gene sequencing technology. He added that people were also making money. 


Andy said that the real sign of health for the sector was in recycling. He said that people have not succeeded and just run with their gains, but have come back and tried again: for example Jonathan Milner has put his experiences from Abcam back into Horizon Discovery; Steve Jackson having sold KuDos to AstraZeneca has established Mission Therapeutics; Ian Garland sold Arrow Therapeutics to AstraZeneca and now is leading Vernalis, which recently raised almost £70m; other people from Arrow had founded re:Viral; investors from Respivert have come back into Topivert; Invesco which has gained from its 29% holding in BTG has also invested in Vernalis, e-Therapeutics and Immupharma; Greg Winter, who developed the technology that underpinned CAT, has come back again first with Domantis and then with Bicycle; others from CAT have come back in Crescendo, KyMab and PanGenetics. Money, people and expertise are being recycled.


One point where I would disagree with Andy was his comment that trade associations were no longer necessary for the UK biotech sector. Working for the BIA I have seen what  has been achieved for the sector. One example is R&D Tax Credits, which have been described by some as a lifeblood for the research insensitive companies in biotech. I know of one company – and Andy should know this too as he was on the board there for 11 years – has said that R&D Tax Credits cover the costs of one quarter of its staff. The BIA campaigned not only for the introduction of R&D Tax Credits but also for their extension and additional benefits that have been introd
uced. This includes the removal of the PAYE/NI cap that has meant that the credits are much more valuable for the more virtual companies in biotech and the prevention of changes to going concern status that would have removed most biotech companies from eligibility for the credits. Less than three months before the last election in 2010 both the Conservatives and Liberal Democrats were going to scrap R&D Tax Credits if elected, the BIA and a number of other organisations representing innovative companies convinced them of the value of the credits to companies that could represent the future of the UK economy. Trade associations for maturer industries than biotech have evolved as their industry has developed and the BIA is at a point where it too has started to mature.


As he drew to a conclusion Andy said it is the sector’s diversity and capital efficiency that have contributed to its success. He said that more cash had hone into UK biotech in the last two years than ever before and that he has never seen a set of companies that are less struggling. He said the sector has become mature and as a result will not grow at the same rate as before. He finished by saying the motion was stupid and that the audience should vote against it.


Daniel, closing for the proposers, put up no argument. Using a presentation – not Oxford Union style – he simply said biotech was dead and then gave a presentation for a project he is involved in. A failure to debate and a failure to address the topic at hand. 


The vote was not even close, only about 15-20 of the 200 or so audience members voted for the motion. The house did not believe UK biotech is dead.



Last Thursday I attended M:Communications annual conference on investor relations for healthcare companies.


The conference opened with Oliver Maier, Fresenius Medical Care, discussing the company’s operations and their one-stop shop business model. He noted that one of the key factors in FMC’s development was that they took their time building a thorough knowledge of the industry in which they operate – providing dialysis services. He said the company involved the CEO in its investor relations as well as the CFO as this could provide investors with a broader overview of the company.


Jo Walton, Credit Suisse, provided an analysts view of the current state of play – and it is not pretty. She started with her take-away message for investor relations personnel: “if you can educate me about your company, I can educate your investors”. By this she said she meant not just providing the facts and figures, but also describing the science and how it works. Jo said that she is mostly focussed on larger pharma companies and does not follow EU biotech very much. She noted that in her dealings with companies that CEOs tend to be optimistic about the future while CFOs tend to be pessimistic about the future. 


Jo was very sceptical about pharm.’s move to emerging markets and is not convinced that emerging markets offer much for the sector. This view was certainly echoed in the networking break as a couple of people I spoke with said their companies were unable to create a market for their high-value products in emerging markets – and did not see a time when their endeavours there would be profitable. Jo said she is very concerned about R&D productivity in the sector and noted that there currently is only a 50% success rate from phase III – and that success rates will not rise in future as a new medicines are being compared against a current gold standard rather than placebo. She noted that Credit Suisse research says that in-licensed products are marginally more successful than company’s internal products at reaching the market. She said that she would prefer companies to offer dividends rather than repurchase shares as a way of rewarding investors. Her final message was that companies should help analysts understand the full picture – to help themselves.


Charles Mayo, Simmons & Simmons, looked at legal aspects of business models. In particular he discussed the recently introduced UK Bribery Act and its implications. He said companies needed to make positions clear in their corporate procedures for dealing with “entertaining “ clients.


The following panel discussion, led by Andy Richards, and featuring Dan Mahoney, Polar Capital, Anne Mareike Ezendam, ING Asset Management, and Ian Crosbie, Jeffries International, discussed a number of issues:

  • Is there was still an appetite for M&A given that company growth rates are currently low? Ian suggested that there would be “bolt-on” acquisitions in the near future, but unlikely to be the sort of big M&A as in the past. Ian noted that one of the challenges for biotech companies is that – Vertex apart – there has not been a biotech product launch in the last 12 months that has met expectations – and that this might reduce the appeal for acquisition. (In the post-discussion networking I wondered whether the expectations – of companies and analysts – had got out of step with reality. One delegate mentioned that Provenge is widely considered a failure, but when the figures are analysed it is set to be one of the top 10 biotech product launches of all time.) However, Dan said that if a company believes it can add value via M&A then they will pay for it.
  • What are the risks for investors? Dan said the risks were different in the EU and the US. In the US investors are more prepared to take risk, few in the EU are. He said that Polar invested mainly in US biotech, that they invested early and got out when Americans get excited about the company. Ian said that European investors do not want companies to diversify their risk – whereas US investors expect companies to do so. Ian said that many US investors like the look of EU biotech, but are concerned they can’t get out – they want stocks with liquidity – and need M&A.
  • Few therapeutic companies are now being set up to become “big companies” but are set up for exit by takeover? Dan wondered if there is actually any need to create companies and whether the virtual model might work better. Andy said that most VC-backed companies are set up very tightly and are mostly virtual. He added that he is seeing platform companies spinning out each product into individual separate companies.
  • Dan said he had noted a change in the US and that public companies there are looking for non-dilutive funding for early  stage projects. He added that it was a shame that companies in the UK/EU were not so able to access this sort of funding and wondered if trade associations could help facilitate this.
  • Andy said he was seeing pharma partnering activity move to earlier phases so that they can do more to keep the product on track as many small companies do not follow good practice.
  • Andy wondered that with the rise in corporate venture funds how this would affect partnering as companies were “in early” through the fund. He also wondered if pharma was investing in other venture funds.
  • Ian said that the public markets do not value pre-phase II assets. However, EU investors will mark down a company if there is a pre-phase II failure, but not add value for success. So he said that despite what they say investors do consider pre-phase II to have value. Andy said that it was odd that values rose when companies partnered products, when really they should go down as the company had effectively have given something away.
  • Jo Wilson said that a lot of big pharma acquisitions were not necessarily for the product, but to get entrepreneurial and innovative people into the company. There was some disagreement on this as  several recent acquisitions had resulted in almost all of the acquired company staff getting dumped.
  • What is the best way for investors to make money – share buy backs, dividends, acquisitions, licensing? Anne said there should be a mix. Dan said he hated share buy-backs as the
    y simply massage EPS growth.
  • Predictions for the next 12-8 months? The panel did not really have many predictions as the macro environment is uncertain. The overall opinion was more of the same with some bolt-on M&A. The new normality is extreme volatility.


The event ended with Mary Clark, M: Communications, giving 10 tips for successful communications:

  1. Know the audiences and what they need
  2. Gather market intelligence
  3. Understand the macro environment
  4. Have a compelling story
  5. Integrate your communications
  6. Maximise every communications channel
  7. Manage your management team
  8. Understand your peer group
  9. Monitor, gather feedback and adjust
  10. Be proactive and constantly challenge your approach


Last Thursday I attended my first social media conference – the fourth DellB2B Social media huddle. The event is designed to bring communications professionals together to discuss the latest ideas in social media for B2B focused organisations.


The first presentation of the day by Lee Bryant (@leebryant) was on “social business” and he outlined some of the key trends that he believes will affect business over the coming years:

  • Mobile – will become ubiquitous and companies need to change how they think of the user experience
  • Cloud – no longer just a storage opportunity it is a utility
  • Consumerisation – businesses need to offer a consumer-grade user experience
  • Big data – databases are an essential part of business, but how that data is mined is the key
  • Social – both inside and outside the organisation – need to engage customers as well as partners and staff (for example using tools such as Yammer)

Lee also noted that organisations needed to think socially and that companies are now moving from hierarchical management structures to a networked style to ensure that the skills in their workforces are fully utilised. This is where social tools inside the business play a role to bring ideas together to ensure better outputs. Lee said that social can also help in CRM where the hard data can be combined with social data to personalise the offering. Lee also noted that most new company websites were build out of narcissism with a stone-age mindset and fail to take the customer into account. He said most websites are built in the style of the organisation – always self-obsessed – and fail to use pre-existing social tools. These comments certainly made me smile given that my employer has just launched a new website. Lee added that successful organisations realise that they need to engage on the customer’s own territory to build a better connection.


The second presentation was from Caibre Sugrue (@cairbreUK) and looked at trust. Cairbre said that if people trust your business they are more likely to buy from you and more likely to pay more for your products. This applies offline and online – including in the social world. This reminded me of some comments that Ian Rogers (@iancr) of Topspin Media has talked about with respect to their software and how the average sale for musicians through their service is over $20. Cairbre said social interactions need to be transparent, honest and frequent – however quality is more important than quantity. He suggested that the communication should be CEO-led, but supported by the “technical” experts when required. He added that in general a message needs to be heard 3-5 times to be believed, but if you are trusted 1-2 times. If you are not trusted one negative message is a switch-off. Cairbre recommended reading Dell’s social media policy, which is seen as a flagship for companies.


One comment during the Q&A suggested that companies shouldn’t just use social media as a marketing stream as it switches off the audience very quickly. They need to engage with the audience, be interesting and build trust.


The third presentation from Azeem Azhar (@azeem) looked at influence scores, which I think is of particular relevance if you are engaging in a wide field. The presentation looked at a number of tools for measuring influence (PeerIndex, Klout, Kred) and how they could be used to identify the key influencers in your field. The presentation noted that it is important to define what influence is before measuring it.


However, in the post-presentation discussion it was noted that in niche fields – and I think the field in which I work, biotech, is one of them – you tend to already know who the influencers are and you should aim to engage with them in the social media sphere too.


The first session of the afternoon un-conference, led by Rob Shimmin (@robshimmin) asked whether companies need to let their guard down to use social media in a B2B environment. The answer was no. However, Rob noted that care needs to be taken – as with any online interaction. He said it is important for companies to manage their personal brands as well as the company brand and to educate family members and staff about what can and cannot be said online. Rob also discussed security and recommended not just using different passwords for different sites but also changing them regularly. The overall message was be aware and be smart.


The second unconference session led by Andrew Gerrard (@andrewgerrard) and Guy Stevens (@guy1067) looked at governance of social media and asked who “owns” social media within an organisation. Andrew noted is important that companies have HR policies that define what staff can say about the organisation both in and out of the work environment. He added that the US Army social media handbook is a good guide for setting up a policy.


The final presentation by Benjamin Ellis (@benjaminellis) discussed best practice in linking the offline and online worlds. Some of his recommendations could apply to any organisation:

  • Capture notes from every meeting on an intranet
  • Organisations need to change their culture to be socially open
  • Use software – online or local &nda
    sh; to help planning and workflow within an organisation
  • Use QR codes – and on printed materials to bring people from offline to online – more and more mobile devices now have native code readers.
  • Use social tools such as lanyrd.com to socially promote conferences – currently very big in IT conference field, but spreading rapidly to other fields 

Overall, for me, the most satisfactory realisation from the event was that the way I have proposed we should use social media  at work to promote our business is the way it should be done and is being done by other businesses. I was pleased that the event reinforced my suggestions that my employer needs to use social interactions as more than just a marketing stream and actually engage with its customers and potential customers, otherwise its competitors will steal a march on them. I learned that there is a lot more we could do – new ways to interact and new tools to learn.