BIGT Recommendations

The BIGT has specific recommendations to address each of these individual challenges. Each of these recommendations will improve the UK's ability to exploit its intellectual property - a historic weakness. The highest priority recommendations are introduced and listed below. The full rationale behind each recommendation is defined in the sections that follow. To jump ahead to any section, you can navigate using the floating menu on the left.

	Build a mutually advantageous collaboration between the NHS and industry for patient benefit through the creation of a National Clinical Trials Agency (NCTA). The NCTA, sponsored by the Department of Health (DH) in collaboration with Research Councils UK, should support excellence in clinical trials and clinical research within the NHS.
	Create a public and regulatory environment supportive of innovation. This includes improving regulatory support to the development and prescription of innovative medicines in the UK, through effective collaboration between industry, regulatory agencies and Government.
	Ensure sufficient and appropriate funding is available. This includes supporting measures to improve the liquidity of bioscience companies, through adjusting pre-emption rights and corporate venturing, and investing in the 'bridge' between idea generation and commercial financing.
	Build a strong bioprocessing sub-sector within UK bioscience, through the creation of a network of bioprocessing centres of excellence across the UK. These centres would deliver skilled personnel, develop leading edge research and promote the UK as a target for inward investment.
	Develop, attract and retain a high quality scientific and managerial talent base, through two new programmes to support dual, interdisciplinary education essential to the bioscience sector.
	Making it happen: Create the Bioscience Leadership Council (BLC) composed of six industry representatives and six strategic stakeholders. The BLC will take responsibility for implementing and building on the BIGT recommendations and will provide a forum for Government and industry to work together to develop a successful bioscience industry.

Build a mutually advantageous collaboration between the NHS and industry for patient benefit (Recommendation 1)

The NHS makes the UK stand out among countries seeking to build thriving bioscience sectors. Not even the US, which hosts the world's leading bioscience industry, has an institution that provides a single gateway to its patient population, and the ability to monitor their treatment over time. This makes the UK a distinctively strong location to conduct clinical research in general and clinical trials specifically.

UK leadership in clinical research and in clinical trials, achieved in part through collaboration between the NHS and the bioscience industry, is a core component of the BIGT vision. Multiple stakeholders gain from this vision. Access to innovative medicines, in the context of protocol-driven care, improves both patient outcomes and the skills of healthcare professionals - benefiting patients, the taxpayers and Government who fund their care.

Clearly this vision is also of benefit to industry. The BIGT is convinced it is essential. Bioscience companies, like pharmaceutical companies, depend on clinical trials in appropriate patient populations to develop and secure approval for their treatments. These trials need to be conducted impeccably, following regulatory stipulations to the letter. At the same time, bioscience companies need to make significant improvements in clinical development to ensure that innovative drugs continue to be developed, and at affordable prices. Developing a single prescription drug takes 10-15 years from discovery to approval, and usually costs £50-150 million in cash outlay. Adding the cost of failure and the opportunity cost of capital to the cash outlay, the average total cost of developing a successful new prescription drug is now £500 million ($802 million) in the latest detailed study.

Approximately half of the time and cost of successful medicine development is spent in clinical development phases, and both are increasing, as Figure B indicates. Time spent in clinical development for biopharmaceuticals has grown 137% over the past 20 years, as less known molecules have required lengthier, more complex development programmes. (14) The cost of development of new prescription drugs (both chemical and biologic drugs) has grown 2.5 times in inflation-adjusted terms since the late-1980s. This cost rise is unsustainable, and puts in jeopardy the development of innovative drugs aimed at small populations, as they will not generate the revenues to cover the R&D investments. One of the main drivers of this cost rise has been increasing clinical costs, stemming in part from the difficulty of recruiting patients into clinical trials.

The challenge of patient recruitment into clinical trials will only increase with the advent of 'personalised medicine'. Companies will develop drugs targeted at better categorised diseases, and at patients with a specific genetic profile. They will also need efficient ways of rapidly locating and monitoring those people. As companies develop new modes of treatment, such as tissue engineering, they will need to work even more closely with medical professionals and regulators.

Fundamental changes are needed in the structure and cost of drug development. Bioscience companies must use the latest scientific techniques to improve the focus and productivity of their R&D programmes. At the same time, the UK has the opportunity, through the NHS, to transform the efficiency and effectiveness of clinical trials conducted here. It must create the mechanisms to rapidly connect clinical researchers and patients, and the cadre of administrative and medical professionals who can support academic and industrial researchers as they conduct trials. This will create a powerful magnet for the bioscience sector and improve patient care.

There are three main barriers to address in order to achieve this component of the BIGT vision:

• A lack of cultural support for innovation and industry/academic collaboration within the NHS
• A lack of infrastructure
• A lack of funding

The BIGT believes that major investment is needed in this area.

1.1 Create a National Clinical Trials Agency (NCTA) to support excellence in clinical trials and clinical research within the NHS. NCTA should be an arm's length body, sponsored by the Department of Health, working in collaboration with Research Councils UK. The NCTA would require £5 million of new money in its first year to supplement £45 million from existing sources (NTRAC,NCRN, MRC and HTA). The NCTA and funding would scale up over the initial five years to reach £200 million per year (£150 million in new money). A successful NCTA will provide benefits for patients, better quality and more effective trials for industry and will generate further income for the NHS.

To raise the level of professionalism in the NHS surrounding clinical trials, the NCTA should focus on two main activities:

1.1.1 Develop the infrastructure required to support professional, efficient clinical trials. Specifically:

• Create a national network that will audit available clinical trials capacity; establish 5-10 infrastructure offices to advise on clinical trial set-up, conduct and regulation, develop national costing models and provide essential training (e.g. to research nurses).
• Build business cases for, and fund further investments in critical physical and human infrastructure, e.g. the MRC clinical trials unit could form part of the NCTA. An initial pilot could include dedicated translational facilities for Phase I/II trials and clinical research networks, along lines of the National Cancer Research Network (NCRN) and National Translational Cancer Research Network (NTRAC), for respiratory, neuroscience, cardiovascular, musculoskeletal, and paediatric areas. The BIGT does not intend that the NCTA will conduct clinical trials, like a contract research organisation (CRO). Instead, the NCTA will aim to make participation in NHS-based trials more attractive and effective for all constituents: those conducting clinical trials (researchers, academics, companies, CROs) and those enrolled in them (patients and physicians). The BIGT expects aspects of the NCTA to generate significant revenue in the NHS. The NCTA will work with the MHRA and the EMEA to ensure relevant, high quality clinical trials.

1.1.2 Fund a portfolio of clinical research programmes and projects.In the medium-term, the NCTA would fund clinical research, including hypothesis-driven, pragmatic, and long-term studies. At least some portion of this portfolio should focus on enabling NHS-academic-industry collaboration, and create vehicles for public-private partnership.

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Create a public and regulatory environment supportive of innovation (Recommendation 2)

A public receptive to innovation and a supportive regulatory environment in the UK and Europe will be critical to the success of the UK bioscience sector. There is widespread support among the UK public for the application of research to the improvement of human health. But as bioscience research continues to touch on many emotive areas, industry and Government must assume responsibility for ongoing public education and debate.

Public perceptions have a strong influence on regulation. The UK has been a leader in establishing appropriate, intelligent regulation in a number of areas such as stem cell research. The challenge is to maintain a manageable system of regulation, striking the right balance between protecting people from harm and supporting innovation. Getting the balance wrong could result in significant costs to public health, and may imperil the competitiveness of our bioscience industry. The primary forum for many of these regulatory debates is increasingly Europe, and it is important that the UK plays a leading role.

Development and prescription of innovative medicines

The BIGT identified the drug development process and post-approval clinical guidelines as potential areas for regulatory improvement. Considering the long timelines involved, any acceleration in drug development and approval can make a material difference to patients suffering from life threatening disease, and provide a clear incentive to companies developing treatments.

The US clearly understands the importance of this issue. The new FDA Commissioner, Mark McClellan, announced at the BIO2003 convention in June 2003 that the FDA will update its regulations with the aim of reducing drug approval times by 10% or more. ( 15)

Mark McClellan, FDA Commissioner (16)

These issues are also prominent on the European agenda. But proposed reforms (see Chapter 3) are delayed, awaiting a common position from Council before a second reading before the European Parliament. Around 160 submissions have received Orphan Medicinal Product (OMP) designation over the last three years, 90% of them from small bioscience companies, but only nine OMPs have actually been authorised so far. (17)

Increasing regulation of drug development weighs on the young bioscience industry. The EU Clinical Trials Directive comes into effect in May 2004, and is intended to harmonise procedure across Europe. The BIGT is gravely concerned that this Directive may instead hamper EU competitiveness versus the US. It may raise the cost of conducting clinical trials, and may present a new barrier to exploratory, academically-led clinical research. ( 18)

What happens post-approval, in the 'end-market' for drug treatments, is also important. The UK pharmaceutical market is known to be less receptive to innovative products than competitor countries. In 2000, it lagged behind all major developed markets, except Japan, in the share of its drugs bill spent on medicines launched in the previous five years. (19) The creation of NICE, a health technology assessment agency, appears to many as one more barrier to market access - particularly for small companies selling potentially expensive biotech drugs.

2.1 Improve regulatory support for the development, approval and use of innovative medicines in the UK. This involves industry, regulatory agencies, and Government collaborating to:

2.1.1 Implement the EU Clinical Trials Directive in an effective manner consistent with the aim of achieving global leadership in clinical research.

2.1.2 Introduce a system for provisional licensing of drugs in the UK and EU , such as an adapted version of the French Autorisations Temporaires d'Utilisation (ATU) de cohort system. This will make promising new treatments available to patients where a genuine public health need exists, often before the completion of Phase III clinical trials. In addition, the UK should support the draft EU legislation that recommends creation of a Euorpean conditional marketing approval, a fast track procedure and harmonisation of compassionate use regulations.

2.1.3 Create a collaborative relationship between the EU and UK drug approval regulators and the bioscience industry , to ensure that approval times for approved medicines/therapies are competitive with the US.

Use of animals in medical research

Protocols involving animals are an established part of medical research globally. Since the nineteenth century, the UK has been a pioneer in the regulation of research involving animals. Today, such regulations provide a clear code of practice within which UK-based academic and commercial researchers operate. The majority of the UK public supports this work.

However, extremist, minority opposition to animal experimentation of any kind has made the UK a costly, and in some cases, a hostile place to conduct academic and industrial bioscience research. The ultimate penalty is visited on patients, as extremists block the development of medicines that they urgently need.

The BIGT recognises the support that the Government has shown for the sector on this issue to date. A number of legislative measures have been introduced (e.g. amendments to the Protection from Harassment Act 1997) and police powers have been expanded to tackle this problem. But current legislation is not working. Immediate action is needed.

2.2 Defend the responsible, regulated use of animals in medical research through two measures:

2.2.1 Introduce new, specific legislation to deal with animal extremism against those conducting legitimate medical research, associated organisations and service providers. The BIGT recommends a single piece of legislation to address six key areas: harassment, home visits, protests, protecting employees, restraining orders, and trespass. In the meantime, Government, industry, and academia need to jointly support the police and the Crown Prosecution Service in using existing legislation to constrain animal extremist activity. (21)

2.2.2 Support the work of the Coalition for Medical Progress (22) in encouraging informed public debate on animal research, and seek to optimise the involvement of patient groups in this work.

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Ensure sufficient and appropriate funding is available (Recommendation 3)

Commercial funding for existing companies

The time-lines and cost involved in biopharmaceutical product development make the industry virtually unique among start-up businesses. The probability of success for any individual compound at each phase is low, requiring companies to maintain a portfolio of compounds in order to reduce risk. The long timelines mean bioscience companies need significant funding to survive through the inevitable downturns in the market to reach drug launch - using funding secured through multiple injections of capital. While bioscience companies often pursue service businesses in order to provide near term revenue, it can take more than a decade, and hundreds of millions of pounds in invested capital, to reach profitability. Relative to the US, the UK has fewer specialist investors, and experiences smaller, more frequent funding rounds.

Commercial funding is primarily the responsibility of industry. Finding and rewarding investors who understand the scientific and financial risks involved in this enterprise is a critical challenge for the industry. Government, however, can play a role, primarily through taxation and regulation. The Government has introduced several measures that recognise the distinct challenges facing innovation-intensive industries, and the BIGT applauds them. The R&D tax credit has made a real difference to the cash position of many bioscience companies. The capital gains tax regime in the UK also helps create an environment which is attractive to business.

The bioscience industry is currently caught in a downturn. This is a cyclical industry, and the market will come back and flourish, before another downturn will inevitably occur. However, with the public markets essentially closed, the funding situation is severe. The EU Commission's Biotech Finance Forum estimates there will be a €1 billion funding gap for European bioscience companies over the next 12 months.

Regardless of market conditions, UK bioscience companies face relative liquidity challenges. Compared to pharmaceutical companies, with established drug portfolios, they lack a profit stream to reinvest in R&D. For many bioscience companies, tax losses are a significant, unrealisable asset. Relative to US companies, public UK bioscience companies are handicapped in their ability to exploit rapidly (and confidentially) brief 'windows' of opportunity in the public markets.

Pre-emption Guidelines issued by institutional investors require that UK companies first seek consent of existing shareholders for issues of more than 5% of capital. This takes time (during which a window may close) and is public, often resulting in downward pressure on a company's share price. It also precludes access to innovative financing arrangements, such as Private Investments in Public Equities (PIPE), which are common in the US. These PIPE transactions close in 7-10 days and as they are non-pre-emptive, and they can be kept confidential.

3.1 Support measures to improve the liquidity of emerging bioscience companies in order to advance self-sustainability, specifically:

3.1.1 Support amendment of the Pre-emption Guidelines to permit UK-listed life science companies to issue up to at least 20% of their share capital on a non-pre-emptive basis during a rolling three-year period.

3.1.2 Extend the scope of the current Corporate Venturing Scheme (CVS) to allow investor companies to utilise a tax loss asset received from the investee company in lieu of/in addition to an equity stake. This measure will enable bioscience companies to monetise their tax loss assets and provide an incentive to engage in partnerships (for example, with large pharmaceutical companies) that will improve the chances of successful product commercialisation.

Pre-commercial funding for pre-company entities

The long-term success of the bioscience sector will require the UK to sustain a strong flow of high quality, financeable ideas from the academic and hospital sectors. As indicated by number of patents filed and papers published, the UK is not suffering from a lack of ideas. The infrastructure of exploitation is now in place. Leading universities have established technology transfer infrastructures and have generated a large number of spin-outs; the University Challenge Seed Funds (UCSF) have been instrumental in injecting a commercial perspective into this early stage development.

There is, however, still much to do. Many of the ideas coming forward from universities for commercial funding are at too early a stage of development, and have insufficient commercial focus to be fully exploitable. The challenge now is to increase the quality of ideas that can advance to the commercial threshold, by increasing the amount and quality of work done on them.

Particular areas of current weakness are the applied research involved in technology validation, and the building of commercial propositions. Both are essential for attracting private capital. UK research bodies do not provide significant funding for the former. The latter has become even more important as capital market declines have reduced the exit potential for commercial investors, causing them to 'raise the bar' on what they will invest in.

These gaps apply to all technology-driven sectors, not just biosciences. Addressing them requires increased public funding, which will benefit a broad range of industries, such as IT, nanotechnology, and alternative energy.

3.2 Invest in the 'bridge' between idea generation and commercial financing, providing the infrastructure and funding to create more high quality, commercially exploitable projects from the academic, research and hospital sectors.

3.2.1 Strengthen Technology Transfer Offices (TTOs) through a series of measures, including a £20 million 'top-up' funding programme to build skills and facilities at leading TTOs; consolidation of existing, small TTO's; new performance metrics emphasising value created rather than number of spin-outs generated; and an 'Entrepreneur-in-Residence' scheme to increase commercial input to projects at an early stage.

3.2.2 Ensure the new Higher Education Innovation Fund (HEIF) and the Public Sector Research Exploitation Fund (PSRE) provide adequate funding to accommodate:

• Technology validation programmes to provide 'proof of concept' funding.
• Seed funding to enable supported projects and companies to create the technology and commercial case required for qualifying as 'investment ready vehicles'.

The BIGT recognises that the UCSF programme is being rolled into the new HEIF and urges earmarking of HEIF funds to ensure that investment is made in these two important areas.

Funds for these purposes should be increased to £280 million per year at the earliest opportunity.

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Build a strong bioprocessing sub-sector within UK bioscience (Recommendation 4)

Bioprocessing is a critical part of the bioscience sector. It covers all aspects of the production process that transform a lab-based drug candidate into a marketed biopharmaceutical, formulated for safe use in a patient, and draws on a wide range of techniques, including molecular biology, microbial fermentation, mammalian cell culture, transgenics, purification, and analysis. The issues and technology underpinning the translation of bioscience inventions into economic and safe medicines are fundamentally different from those involved in conventional chemical pharmaceutical manufacturing.

Bioprocessing is a high-skill, knowledge-based activity, with a large number of variables. For example, the same biologic drug, manufactured through the same series of steps at two different locations, can have different pharmacokinetic profiles. The bioprocessing skill-set is vital for driving speed, efficiency and cost effectiveness in the development and production of advanced biopharmaceuticals - and will, therefore, be important for ensuring that future biopharmaceuticals are affordable. As these products become more complex, the importance of bioprocessing will inevitably increase as 'product' and 'process' become ever more closely linked.

To meet this evolving challenge, the sector has to attract more talent trained in a range of disciplines, and increase the level of invention and innovation. The UK already has a strong reputation in some areas of bioprocessing, such as cell therapies and tissue engineering, and in formulation and drug delivery. Building hard-to-replicate expertise will help to fulfil the BIGT's vision of the UK as a global leader in bioscience, and insulate the sector from the financial pull of low-cost locations.

4.1 Build a network of bioprocessing Centres of Excellence across the UK.

4.1.1 Establish Centres of Excellence across the UK in leading HEIs , with strong leadership from international 'heavyweights' (directors should be supported by three other academics and 6-8 post-doctoral researchers), a clear mission and secure funding. The Centres of Excellence will focus on an ambitious, three-pronged mission:

• Deliver graduate training designed to create interest, interdisciplinary awareness, and expertise in bioprocessing.
• Develop leading edge research resulting in strong IP positions in emerging areas of bioprocessing.
• Build collaboration with leading UK-based companies to ensure real-life experience.

Secure funding will be vital. BIGT recommends £5 million per year in total for all the centres from Research Councils, for eight years, with matching investment from host HEIs and/or RDA's.

4.1.2 Focus the research agenda of Centres of Excellence around 'next horizon' bioprocess-related technology areas , where the UK has an existing foothold and the potential to develop global IP leadership positions.

4.1.3 Develop training programmes and agendas in Centres of Excellence and expand training options across the UK to build skill levels among the existing bioprocessing workforce.

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Develop, attract, and retain a high quality scientific and managerial talent base (Recommendation 5)

A world leading bioscience sector is undeliverable without the talent and technological expertise to underpin it. Research and education in biology, medicine and the classic physical sciences remain strong in the UK. But the span of the bioscience sector across scientific disciplines, and the speed of technology development, mean that the bioscience talent pool of the future will need to be strong in interdisciplinary skills.

A successful bioscience sector will require: biologists skilled at engineering to innovate in bioprocessing, physicians with the biological research experience to lead in tissue engineering, and computer scientists with doctorates in molecular biology to establish new frontiers in bioinformatics. Interdisciplinary scientific talent is only one dimension. UK bioscience also needs a deep pool of managers skilled at both business and science. The development of such skills is not encouraged by the focus on research outcomes, encouraged by the RAE.

Initiatives are already underway to create this talent pool, such as the EPSRC scheme for a four-year PhD in Interface Interdisciplinary Centres, and the interdisciplinary research initiatives of Research Councils UK. The BIGT supports them and their expansion, as well as the introduction of selected new initiatives.

5.1. Initiate two new programmes to support dual, interdisciplinary education essential to the bioscience sector.

5.1.1 Create a programme to fund combined Bachelor of Medicine Mb-PhD qualifications with 30 studentships at selected HEIs, rising to 100 in equilibrium. The qualification should be similar to the US dual MD-PhD qualification. Many US bioscience managers have this qualification, which equips them to deal effectively both with the scientific and the clinical aspects of the industry. Although offered by some pioneering universities, intercalated degrees are not generally funded for medical students in the UK. The BIGT recommends greatly increasing the number of individuals carrying this qualification.

5.1.2 Introduce a programme to fund post-PhD scientists and engineers undertaking formal business education , ranging from modular courses to full MBAs. Most doctoral level scientists do not instinctively reach out for a business education, and the lack of standard Research Council funding for business studies presents an additional disincentive. However, commercially skilled scientists will be vital for building a successful bioscience sector. The BIGT recommends a flexible approach to create a cadre of commercially skilled scientists. Some may prefer a modular approach, pursuing business alongside their research; while others may favour the intensity of a full-time MBA.

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Making it happen: Create the Bioscience Leadership Council (Recommendation 6)

The BIGT provides a unique opportunity for the different parties involved in the biosciences - industry, the NHS, academia, Government, patient groups - to engage in constructive dialogue and debate. The BIGT wants to ensure this discussion continues. The BIGT also wants to ensure that the recommendations of this report result in action, focused effort, and collaboration among all key stakeholders. Industry proposes to take the lead, through the creation of a new body.

6.1 Create the Bioscience Leadership Council (BLC), composed of six industry representatives and six non-industry stakeholders (e.g. from the NHS and academia), reporting biannually to Ministers.

The council has a vital role to play to:

• Facilitate Government and industry cooperation;
• Proactively drive implementation of the measures recommended by the BIGT;
• Monitor their effectiveness;
• Provide a forum to discuss issues management; and
• Enhance the probability of success for a world-leading bioscience industry developing in the UK.

The BLC will be supported by a secretariat, whose first task will be to amplify and finalise the implementation plan for the BIGT recommendations, and achieve agreement from all interested parties on their respective roles.

Working Groups of the Council may be formed to address the implementation of particular recommendations (e.g. the NCTA).

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