I thought it may be useful to ‘put pen to paper’ regarding a few personal thoughts on that most topical of questions, the availability of funding, and other fiscal matters, for life science companies in the UK.
As is the case with many European countries, the UK has seen a decrease in VC and IPO activity in the life sciences sector over the past few years and as a consequence other initiatives have taken their place to ensure that the UK retains its position as the premier location in Europe for life sciences.
One of the major issues faced by UK companies, or those seeking funds from the UK, is to find a way through the variety of sources available, ranging from debt finance, charitable funding, government grants and loans etc. as well as to give consideration to government incentives such as Patent Box, R&D Tax Credits etc.
Looking at what’s available, an example of charitable funding includes the relatively new £200 million fund from the Wellcome Trust’s endowment that will invest in emerging businesses and technologies in the healthcare and life sciences sectors. The business will operate under the name “Syncona”
With respect to government funding, a recent initiative has seen the establishment of a three-year £180 million programme, to be managed jointly by the Technology Strategy Board and the Medical Research Council, which will support some of the UK’s leading life science companies and academia, enabling them to move more quickly from discovery to commercialisation.
Other government initiatives to consider as part of the big picture are the Patent Box which will reduce the Corporation Tax across the UK on income from patents taken out in the UK to 10% from the current 24% tax rate. It’s also worth noting that the current 24% will reduce to 22% from April ’14.
Within England, the Regional Growth Fund (RGF) is a £2.4bn fund operating from 2011 to 2015. It supports projects and programmes that lever private sector investment to create economic growth and sustainable employment.
Each of the three UK Devolved Administrations (DAs) of Northern Ireland, Scotland and Wales are also keen to attract inward investment to their respective countries and each has their own offering. As an example, Wales are in the process of putting together a £100m fund – part VC, part Welsh Assembly Government funded – to specifically attract life science companies to their region.
So what’s the overall picture? Speaking as someone who has established two UK bio-companies, one service and one product based, the current funding situation is not easy, but if the product or service is good enough there are options available to get the backing required, and of course UKTI are here to help!
The team and I would be delighted to meet you at the UKTI Booth at BIO 2012 in Boston next week. For details please see the Meet the UK at BIO 2012 webpage on the UKTI website.