Manufacturing is an important part of the life sciences industry in Scotland, with the sector stretching from large household names to start-up and spin-out companies.
Scotland has an enviable reputation when it comes to scientific endeavour – from Sir Alexander Fleming discovering penicillin and Sir Ronald Ross linking mosquitos to malaria, to Sir James Black developing beta-blockers and Ian Donald utilising ultrasound.
Today, Scottish universities remain at the forefront of innovation, providing much of the knowledge and many of the skills that can be used by the nation’s life sciences industry to turn scientific ventures into products and services that save lives and save the planet.
Yet life sciences in Scotland aren’t just about research and development – they’re about manufacturing too. Household names like AstraZeneca, GlaxoSmithKline (GSK) and Johnson & Johnson – along with the latest start-ups and spin-outs – make a wide range of products, ranging from drugs, ingredients and therapies all the way through to components and medical devices.
One of the many manufacturing operations that calls Scotland home is Capsugel’s Livingston-based Encap Drug Delivery division, the world’s largest organisation dedicated to making liquid and semi-solid pharmaceutical capsules. The business was founded in 1989 when oral drug delivery was still in its infancy.
“There are two main advantages of delivering a drug as a liquid in a capsule instead of as a solid tablet or as a powder in a capsule,” explains Stephen Brown, managing director of Encap. “The first is that you can more-accurately control the dose being given to the patient, with that dose being more-effectively absorbed by the gastrointestinal (GI) tract as a liquid than a powder or solid.
“The second advantage comes with drugs that are delivered in very low doses or which are highly potent – when you have those sorts of drugs, if you can formulate them into a liquid then they are safer to handle and you can get much better dose-reproduction and dose-homogeneity from dosage unit to dosage unit than with a tablet or a powder-filled capsule.”
Capsugel, the world’s largest manufacturer of empty capsules and an innovator in drug delivery systems, bought Encap in 2013. New Jersey-based Capsugel had been a hard-capsule manufacturing unit inside pharmaceuticals giant Pfizer before being sold in 2011 to investment management firm Kohlberg Kravis Roberts (KKR) for US$2.4 billion (at the time around £1.5bn) and then embarking on a series of acquisitions to diversify its business.
Encap has continued to thrive under Capsugel’s ownership and now has 130 staff. The company’s diversified customer base ranges from some of the ten largest pharmaceutical companies in the world to small biotech start-ups. The firm’s facility in Livingston is the largest in the world for producing liquid-filled medicine capsules and holds a licence from the UK’s Medicines & Healthcare Product Regulatory Agency (MHRA), as well as having been successfully inspected by the United States Food & Drug Administration (FDA).
Now that Encap is part of a much larger international company, it could base itself anywhere in the world. So what makes Scotland attractive for such manufacturers? “The people are a big attraction,” says Brown. “The universities produce high-quality graduates who are well-trained to work in the manufacturing industry. There is also a thriving manufacturing sector in Scotland, so there are experienced staff available to join us from other companies, whether that’s doing development or production work.
“Another of Scotland’s attractions is how easy it is for people to get here. Our customers can very easily come and visit our facility – that’s not always the case in other parts of the world.”
People are also one of the most important factors for Sarah Jardine, director of manufacturing at Optos, a Dunfermline-based company that makes machines for taking high-resolution digital images of the retina. Optos’ devices can take pictures that cover 82% of the back of the eye, something that no other machines can do.
“I grew up on a diet of television programmes like Blue Peter and Tomorrow’s World,” laughs Jardine, who has been with the company for the past 16 years and who began managing the manufacturing division six years ago. “I wanted to make things that no-one else had thought of yet, and I’m lucky because I get to live out that dream at Optos.
“No-one used to want to go into manufacturing – it was seen as a threat if you didn’t do well at school. My granny used to warn me that I’d end up down at the wire factory.
“But working in manufacturing today isn’t like the dark and cramped manufacturing of the past – we work in bright and modern facilities and our staff are constantly involved in improving the way we work. We spend a lot of time working with local primary and secondary schools to show children that manufacturing can be just as exciting as design.”
Jardine points to the academic expertise in Scotland’s universities as one of the factors that has made the company successful, especially in areas such as photonics, software and image processing. The firm was founded in 1992 by Douglas Anderson, whose five-year-old son went blind in one eye after his detached retina was spotted too late. Even though Anderson’s son had been having regular eye tests, the routine tests were uncomfortable for children, making it hard for doctors to examine their younger patients. Optos’ first product, the P200, went on sale in 2000, with the company floating on the London Stock Exchange in 2006.
“When Optos began, the intention was to design products that other companies could then manufacture for us,” explains Jardine. “But then we realised that third party manufacturers couldn’t cope when we were pushing components to their limits and so we brought manufacturing in-house.
“Now we have people coming to visit our factory to see how we do things. That’s one of the most rewarding parts of my job. I’m proud of my staff every day.”
Optos was taken over in 2015 by Japanese camera giant Nikon in a £259 million deal. “Nikon bought the business because it was successful,” explains Jardine, who is also the chair of the Scottish Manufacturing Advisory Board (SMAB) run by Scottish Enterprise. “They’ve said to us that they have no plans to move it anywhere else – it’s a successful business that’s been built in Scotland.
“We have about 170 staff in Dunfermline, including around 65 people working in manufacturing, and then another 130 people in the United States working in product development, research, IT, sales, servicing, and a smaller amount of manufacturing – the US is our biggest market, accounting for 75% of sales.
“Continuous improvement has been one of our priorities in our manufacturing facility – staff are given two hours each week to come up with ways of improving the way we work. People are surprised by how we can still make all of our machines by hand on such a small site.
“Some of the Nikon staff who have visited us from Japan have even said that there are lessons they can learn from us when it comes to continuous improvement. That’s very satisfying.”
One of the biggest manufacturers in the life sciences sector in Scotland is pharmaceuticals firm GSK, which has sites at Irvine and Montrose. GSK invests around £30m a year in its Scottish plants and, over the past three years, has pumped in a further £150m to increase capacity at the facilities so that they can manufacture a greater range of drugs and in larger quantities. In July, the company announced it would invest an additional £110m at Montrose to make respiratory medicines.
Dave Tudor, vice-president of global primary manufacturing at GSK, said: “Fundamentally, there are three key things that you need to have in your country if you’re going to manufacture. You have to have the skills and the resources to be able to manufacture, you have to have infrastructure for your goods to be supplied around the world, and you have to have a fiscal strategy that is compatible with commercial growth.
“The great news for Scotland is that we have all three of those in abundance. The skills we are developing at our academic institutes are among the best in the world. The investment in port and airport infrastructure is very strong. In addition to that, the patent box legislation has become very strong and enables Scotland to export at a competitive rate.”
Not all of the manufacturing that takes place in Scotland involves medical devices or pharmaceuticals; some of it involves the most cutting-edge techniques using human stem cells, which may ultimately cure major diseases. Roslin Cell Therapies (RCT), which is based on the Edinburgh BioQuarter science park, makes cell therapies that are used in clinical trials across Europe and the US.
The company provides contract manufacturing services and has made therapies for American drug company Pfizer for its age-related macular degeneration trial at Moorfields eye hospital in London and for the stroke trials being carried out at sites including Glasgow by ReNeuron, which is quoted on the Alternative Investment Market (AIM) of the London Stock Exchange. RCT manufactures the therapies using manufacturing facilities within the Scottish Centre for Regenerative Medicine (SCRM), which is also located at Edinburgh BioQuarter.
“As well as manufacturing cell therapies for clients, we can also help them to improve and develop their production processes,” says Janet Downie, chief executive at RCT. “Communication is key when we are transferring these manufacturing processes and understanding the intricate scientific details.
“The processes that are involved are much more complicated than manufacturing something relatively-simple, like a paracetamol tablet – there’s a lot of expertise involved in the processes and so we have to become experts. That’s why communicating with clients is so important.”
RCT has 30 highly-skilled members of staff and can also draw on the expertise of the other 200 cell scientists within the SCRM, who are actively researching regenerative therapies. The facilities follow good manufacturing practice (GMP) and are licenced by the Medicines & Healthcare products Regulatory Agency (MHRA), which allows RCT to produce cell therapies that reach the standard required for clinical trials on both sides of the Atlantic.
“Manufacturing cell therapies that will be administered to patients is a very sensitive job,” adds Downie. “We recruit staff from around the world who share our commitment to the old-fashioned Scottish values of integrity and honesty – they need to have the right work-ethic to get each job exactly right. Scotland is a great place to manufacture cell therapies because we can draw on the expertise within universities and on the testing facilities that are available in the Central Belt to help us ensure the quality of our products.”