1. What are the key strengths and weaknesses of the UK s innovation system in relation to business-university collaboration?

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1 ABPI S RESPONSE TO THE BUSINESS, INNOVATION AND SKILLS SELECT COMMITTEE INQUIRY INTO THE STRENGTHS AND WEAKNESSES OF BUSINESS-UNIVERSITY COLLABORATION IN THE UK AND THE UK S PERFORMANCE AGAINST INTERNATIONAL COMPARATORS Introduction The Association of the British Pharmaceutical Industry (ABPI) represents innovative research-based biopharmaceutical companies, large, medium and small, leading an exciting new era of biosciences in the UK. Our industry, a major contributor to the economy of the UK, brings life-saving and life-enhancing medicines to patients. Our members supply 90 per cent of all medicines used by the NHS, and are researching and developing over two-thirds of the current medicines pipeline, ensuring that the UK remains at the forefront of helping patients prevent and overcome diseases. Pharmaceutical companies wish to operate and collaborate in a vibrant ecosystem of health and scientific research from universities and their laboratories through to hospitals and the patients who take part in clinical research. Many factors influence the environment for translating fundamental research into commercialised products, but the UK s historically strong science base and talent, including highly skilled graduates, remains a vital foundation. The development of new medicines will increasingly require interdisciplinary-based working, aligning process innovation with research and development. This will place a premium on transferability and mobility, as well as the capacity to work across traditional boundaries. Questions to be addressed: 1. What are the key strengths and weaknesses of the UK s innovation system in relation to business-university collaboration? The UK science base has a number of strengths which lead to significant levels of interaction between pharmaceutical companies, universities, research institutes and the NHS. Research Councils, in particular the BBSRC, EPSRC and MRC, are key drivers in encouraging these relationships, as is the Technology Strategy Board and the European Union Innovative Medicines Initiative (IMI). Information on the current level of collaborations is currently being collated by the ABPI from our member companies, but an ABPI report published in 2012 showed that in 2011 pharmaceutical companies collaborated with universities in a variety of ways from substantial long term funding of

2 research in universities to contributing to the training of around 650 PhD students 1. This report also highlights the fact that in some disease areas, no single pharmaceutical company or academic group can provide all the resources, expertise and knowledge to develop new therapies. Hence alternatives to the conventional drug development process are increasingly being explored, and strong partnerships between industry, academia, the NHS and regulators are required to achieve a reduction in the time it takes to develop new medicines for patients. University technology transfer offices have, in recent years, improved in their understanding of business drivers and training by organisations such as PraxisUnico has professionalised the sector. Inclusion of impact case studies in the Research Excellence Framework (REF) has encouraged universities to recognise the benefits of engaging with business; this is expected to have long term benefits on the quality of collaborations. Negotiation on potential interactions sometimes stalls if expectations are unrealistic for example if a university overvalues their intellectual property or does not recognise the value of the in-kind contributions that industry can make. These include access to compounds, equipment and expertise. The number of industry-sponsored postdoctoral researchers in the UK has fallen in recent years, in part due to company research site closures in the UK, but the relatively high cost of these interactions with UK universities is also a factor. A much higher proportion of UK company spend in this area is now focussed on institutions across the world, primarily in the USA. 2. How competitive is business-university collaboration in the UK against relevant international comparators? The UK performs well in comparison with other countries in being awarded funding from the EU IMI and the EU research framework programme funding, with UK academics taking the largest share of EU funding for health research 2. UK institutes on the whole pitch opportunities at the right level for engagement with the private sector. University technology transfer offices are valued for their role in helping to create successful engagements through clarifying the concept, content and agreement type sought for an opportunity. Top UK top institutions perform well and are recipients of significant funding for collaborations from the biopharmaceutical industry, lower tier departments and institutions struggle. In ABPI s Enriching research, training scientists, ABPI, Data released in October 2012 showed that, in the health theme of the FP7 Cooperation Pillar, the UK had attracted over 570 million in EU funding, 17 per cent of the whole EU contribution and 30 million more than Germany, the second highest beneficiary. Page 2

3 survey the top five institutes for PhD or postdoctoral collaborations were found to be Manchester, Imperial, Oxford, Cambridge and UCL. Other European countries tend to pitch at either too low a level, so that universities do not benefit as much as they could from collaboration; or pitch too highly making engagement too expensive for the collaborating company. An example of the former is Portugal and of the latter, Ireland, where institutions are more likely to engage with the pharmaceutical industry through licencing agreements rather than through true collaboration. Spain is an example of a country where charges are similar to the UK, but which seeks to involve companies in collaboration but at too early a stage. Major partnering conferences held in the UK provide good opportunities for UK academics, directors of start-ups and established businesses to meet, interact and discuss opportunities. Scandinavian countries appear to offer less of this type of interaction than do UK, Germany, Spain or the US states. Effectiveness of Government initiatives to support innovation through business-university collaboration The Technology Strategy Board is valued for the funding they focus on the so-called valley of death between start-up funding and established biotech and pharmaceutical company investment, hence allowing promising projects to be developed to the stage where they can be considered by industry. Additional funding streams focusing on this stage would be helpful; potential value in innovations is easily lost when work ceases due to lack of funding or intellectual property claims are allowed to lapse. Another successful scheme is the Wellcome Trust funded, seeding drug discovery which aims to develop drug-like, small molecules that will be the springboard for further research and development by the biotechnology and pharmaceutical industry in areas of unmet medical need. Additional initiatives like this in the UK would help to ensure continued industry investment in drug development in the UK. 3. What are the strengths and weaknesses of the Catapult Centre model of businessuniversity collaboration? What areas of research should future Catapult Centres focus on? Catapult Centres are valued for their focus on specific problem areas where there are gaps in innovation or concentrated action is required to overcome a particular barrier. Catapults in areas such as cell therapy and regenerative medicine and their contribution to digital health are valued for the leadership they provide for open innovation in these areas and consequent talent development. Page 3

4 The Cell Therapy Catapult has already established a number of agreements, including with both large and small companies. To remain competitive it is important that it builds on this early momentum and establishes further collaborations to ensure the UK does not miss the opportunity to lead on the commercialisation of cell therapies. Taken with other aspects of a supportive research environment, including grant funding opportunities and manufacturing facilities, the Catapult can further enhance the UK as a location for cell therapy. A weakness of these centres is that the problem each seeks to address may become isolated from areas it is related to for example linking use of stem cells into their potential roles within drug development. Further areas where the Catapult Centre model could support innovation in the life sciences exist and we would welcome expansion of the programme; for example into areas that could support management of large non-genomic data sets, gene therapy or advanced manufacturing aspects of cell therapy. 4. What steps can be taken to improve the uptake of Knowledge Transfer Partnerships (KTPs), particularly among SMEs? KTPs are a valuable additional programme for encouraging collaborative working, however we are not aware of a high degree of interaction with this programme from our member companies. We understand that barriers to engagement include non-availability of standard agreements and availability of exemplar partnership experiences which could facilitate greater take up of this type of partnership. Funding 5. Recent BIS analysis found that the UK exhibits a sustained, long-term pattern of underinvestment in public and private research and development and publicly funded innovation. How does this affect business-university collaboration in the UK? Under-investment in public research and development of that research leads to creation of incomplete proposals for commercial organisations to further develop. Whilst we understand the reasons for tight fiscal control of public funding in recent years, if the UK wishes to remain a world-leader in life science research and development the proportion of GDP allocated to publicly funded R&D needs to increase. The UK is amongst the lowest funders in the Page 4

5 OECD of research and development as a percentage of GDP and at 1.79% 3 was below the EU average of 2% in Will the changes to Higher Education Innovation Funding (HEIF), proposed in the Witty Review, be successful in increasing university engagement with innovative SMEs? The Witty Review proposal to increase HEIF from 150 million to 250 million a year is supported and we would expect it to increase engagement with innovative SMEs as well as with larger bioscience and pharmaceutical businesses. 7. What has been the effect of including commercial impact criteria in REF assessments, and should the weighting increase to 25% as suggested in the Witty Review? As indicated in our response to Question 1, the introduction of impact criteria into REF assessments has had a positive effect on academic-industry interaction and is critical to providing an estimation of the value of academic research. Raising the weighting to 25% would be welcomed. 8. Will the Government s focus on the eight great technologies, as described in the industrial strategy, help to attract inward investment? A number of the proposed eight great technologies are key to the success of research and development for future medicines. ABPI highlighted the importance of big data technologies and of maximising the opportunities for use of healthcare data in the UK in our 2013 Big Data Roadmap report 5. Synthetic biology, robotics and autonomous systems and regenerative medicine are also key technologies for the UK to focus on. 9. To what extent is this focus compatible with and complementary to the European Strategy for Key Enabling Technologies? Whilst both the European Strategy for KETs and those proposed by the UK Government are closely aligned we value those proposed by the Department of Business, Innovation and Skills for being more focussed and aligned to real world problems Page 5

6 Local Growth agenda 10. Are Local Enterprise Partnerships (LEPs) (and their counterparts in the rest of the UK) investing as much as they could in innovation and R&D? We have concerns that local support for business to lead economic growth may have become too fragmented through the creation of a large number of LEPs in place of the previously existing RDAs. The aims of the LEPs are valued, but significant impact from their investment is not yet apparent. 11. How can LEPs, universities and Government encourage greater regional R&D investment? A cohesive policy connecting business, universities, research institutes and local transport and infrastructure planning could benefit the local economy through encouraging external R&D investment. 12. How should LEPs direct their allocation of European Structural and Investment Funds in order to maximise increases in R&D output? LEPs should identify gaps which could be addressed through development of partnerships and local collaborations. Funding should be targeted at building and sustaining these partnerships. 13. To what extent will the new University Enterprise Zones encourage business university collaboration? We believe that university enterprise zones could encourage business-university collaboration but this would require the environment to be appropriate; for example in life sciences universities involved should be those where their research in this area is already highly valued by industry. Page 6

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