“How can Scotland capitalise on the success of its life sciences sector and what must we do to ensure that we position Scotland as a global leader within the sector?”
Scotland’s life sciences sector is a hidden economic gem. With more than 650 organisations together employing in excess of 35,000 people, Scotland has one of the largest life sciences clusters in Europe, with companies spread across a broad range of disciplines from human health to agriculture, aquaculture and industrial biotechnology.
The nation has ambitious plans to double turnover within the sector to £6.2 billion by 2020 and double the gross value it adds to the economy to £3bn. Collaboration is at the heart of that growth, drawing together Scotland’s companies, its 19 universities and higher education institutions, and its unified National Health Service (NHS), which has the most advanced electronic health records in the world.
How to capitalise on the sector’s success and position it as a global leader were in sharp focus during the latest BQ Live Debate, which was held at the Blythswood Hotel in Glasgow. Laura Gordon, Glasgow chair of leadership training organisation Vistage and a regular chair of BQ’s debates, asked the participants what challenges lay ahead.
Carol Clugston, chief operating officer at the University of Glasgow’s College of Medical, Veterinary & Life Sciences (CMVLS), mentioned the industry facilities available at the new Queen Elizabeth University Hospital (QEUH) in Glasgow, the largest and most advanced in Europe. “My challenge is how can Scotland’s life sciences community work together to exploit that asset because it’s not just about Glasgow, it’s about the whole of Scotland,” she said.
Having taken over as managing director of life sciences incubator BioCity Scotland in March, Toby Reid introduced himself as one of the newest members of the community. “I’m looking forward to learning about the challenges facing the Scottish life sciences scene,” he added.
Douglas Maxwell founded PAL Technologies in 2001 as a spin-out from the University of Strathclyde in Glasgow and described himself as a “recovering academic”. He explained PAL’s challenge last year had been to deliver a behaviour change device for a European project looking at older football fans, while this year’s challenge is delivering a wearable component for the follow-up of the 1970 birth cohort.
Selling life sciences as a career and ensuring graduate employability were top of the agenda for Scott Johnstone, chief executive of the Scottish Lifesciences Association (SLA), a trade body founded in 2011 with 15 members, which has now grown to 130. “We need a lot of people if we’re going to grow the sector,” he said. “As an industry, we’re not good at selling into schools to children and their parents.”
Sinclair Dunlop, chief executive of Epidarex Capital, was worried about getting across to all stakeholder groups, including politicians, that the sector is different; timelines are longer and risk-profiles are higher. “Expectations of the sector’s performance are often not realistic and are compared to the wrong peers,” he said.
“We’re not very good in terms of articulating what we do in Scotland and we’re overly modest,” said Julia Brown, senior director of life and chemical sciences at Scottish Enterprise. “When you go overseas and talk about some of the things we take for granted in Scotland, we underestimate ourselves. We also have a habit of being quite negative and focusing on all of the things that aren’t perfect instead of looking at the things we have done quite well in comparison to our peers and how innovative we are.
“Unless we do more to sell what’s great about life sciences, and the diversity of it, then we’re going to struggle to bring through the talent from our schools, colleges and universities. My challenge is how do we encourage companies to be much more ambitious? They could be more ambitious when it comes to the markets they want to be in and the amount of investment they want to raise. They’re quite conservative.”
Specsavers franchisee David Quigley spoke about his close connections with Glasgow Caledonian University (GCU) and praised it for improving its graduates’ skills. He asked whether that success was being repeated in other sectors. “There are a lot of technologies out there and we should be considering where they have applications in the life sciences,” he pointed out.
Malcolm Bateman, chief executive of the Roslin Foundation, which runs the Roslin Biocentre science park near Edinburgh said: “Maybe we get it wrong because we always focus on having a life sciences cluster but maybe we should challenge that and look at other technologies and bring those on board.”
Graeme Milligan, dean of research at the CMVLS, said he was “still addicted” to being an academic and explained how he had spun Caldan Therapeutics out from the University of Glasgow, backed by Epidarex. “I might argue Scotland’s life sciences sector isn’t quite as successful as we sometimes like to think it is on a global scale, even for being a small country,” he said.
“How do we much more effectively move ideas and concepts out of the academic community? How do we take a little more risk on winners rather than spreading the butter a little too thin across the whole sector? We don’t put enough money in to ramp up companies for success; they’re immediately looking for money once they’ve been incorporated.”
Getting talent into the sector was a key focus for Neil Partlett, managing director at Grangemouth-based chemicals firm CalaChem. “Getting young people coming through the apprenticeship programme is just as important as coming through university,” he said. “There’s a big gap that needs to be filled by people who come from that route.”
Anita Simmers, head of the Department of Life Sciences at GCU, described her passion for her students. “We should be laying the foundation for global leaders from day one in year one, not when they finish in fourth year,” she said.
“One thing I’d like to discuss isn’t scientific or technical but cultural,” said David Sibbald, executive chairman of Aridhia Informatics and chair of the Stratified Medicine Scotland Innovation Centre (SMS-IC). “How do we get people and organisations from the academic, clinical and industrial communities to think about how they can work together? That’s what’s required for precision medicine.
“We can’t throw money or people at it in the same way as China or the United States, but what we can do is be really smart about how we cooperate and collaborate. We’ve started that process and so should celebrate it but we’re by no means through it – Scotland can still sometimes be a federation of fiefdoms, both geographically and academically.”
His comment about fiefdoms stoked the discussion about collaboration between academia, industry and the NHS. “David is right – historically, we did have a lot of issues around collaborations not encompassing the whole of the country, but there’s been a lot of work done then to bring the ‘fiefdoms’ together,” explained Brown. “We shouldn’t be complacent about that. What’s impressive when we go south of the Border and overseas is being able to say our universities and health boards aren’t just working with each other but also working across industry. That’s something people are interested in hearing about, but we need to keep that momentum going.”
“One of the reasons we set the SLA up was to get companies to help each other to build their businesses – we see collaboration within industry every day,” added Johnstone. He pointed to the Health Innovation Partnership and the Innovative Medical Technologies Overview (IMTO), which allow businesses to have their technology reviewed, bought and used in the NHS.
“There are now innovation champions in each health board,” he said. “It’s quite easy for companies to engage with the right people to find out if the NHS would buy their products.”
Maxwell said: “Talking of fiefdoms, there are four universities in Glasgow. Even as a Strathclyde spin out, we’ve done a lot more work over the years with Edinburgh. We do engage with Glasgow and Caledonian, but we live with this internal competition and I think we could do a lot more together than we do apart.”
“I totally agree that we’re stronger together than we are apart,” nodded Clugston. “But I disagree that we’re fiefdoms – we have been in the past, but we’re making huge inroads. Healthy competition doesn’t do us any harm.
“Medical schools in England are insanely jealous of what we have in Scotland – each medical school works with a single partner health board and we’re all joined up under a single NHS Scotland, which they don’t have in England. Sometimes we don’t all agree but we have the ability in Scotland to all sit around a table and make a decision.”
Sibbald highlighted the need for collaboration between industry, the NHS and academia in precision medicine. He pointed to the SMS-IC as an example of where such collaboration was already taking place. “Our competitive advantage is how we collaborate at a deep level,” he said.
Collaborating with companies from outside the life sciences sector was also a major theme during the debate. Bateman explained about working with engineers at Heriot Watt University in Edinburgh on three-dimensional (3D) printing using stem cells. He also pointed to Well Cow, a joint venture between the Roslin Foundation and TPP Group, that uses sensors to monitor the health of cows and then transmits data over Bluetooth or mobile phone signals.
“Malcolm’s right – people are so focused on what they’re good at that they don’t take the time to look left or right,” agreed Sibbald. “When you look at the collaborations happening in the US around precision medicine, the companies involved aren’t life science companies, they’re tech and data companies.
“The majority of the investment and resources going in are from people like Cisco, Google and Intel. These technologies have been proven in other industries, so the question becomes how do you adapt them for use in the life sciences?”
Quigley asked why such collaborations were happening in the US but not Scotland?
“The difference is the money, the scale of investment they can make,” replied Sibbald.
“Companies like Google are revolutionising where life sciences is going to go,” Milligan chipped in. “One of my good friends used to be head of diabetes at the National Institute of Health in the US. He’s moved to Google because the power of its informatics is so strong and he thinks it’s going to revolutionise how you treat individuals. One of the great things we can do in Scotland is take advantage of the NHS’s databases.”
Milligan also questioned how precision medicine could work within a socialised medical scheme, like the NHS?
“That’s one of the big challenges that still needs to be sorted out,” admitted Sibbald. “The precision medicine agenda in the US is in some ways more advanced than ours because there’s an available market, with customers willing to pay. That’s not the landscape in Scotland or the UK.”
The availability of investment is not just a challenge for companies targeting the precision medicine market but for any business operating in the life sciences sphere. Gordon asked whether enough funding was available and whether Scottish businesses lacked ambition?
“The short answer is ‘no’ there’s not enough funding and ‘no’ there’s not enough ambition,” replied Dunlop. He highlighted the need for “convergence” between Scotland’s “centres of excellence” – such as life sciences and informatics – to bring together experts from different fields, which he said would appeal to investors. “Scotland also needs to look at our track record,” he added. “How many companies born and bred in Scotland have actually made money in this sector for their investors? And specifically for institutional investors, because the public sector can only do so much and the universities themselves can only do so much.
“We need half a dozen home-grown success stories that have delivered competitive financial returns at scale. We’re on the cusp of seeing that in other sectors, such as Scotland’s so-called digital technology ‘unicorns’, so we need a life sciences’ ‘unicorn’.”
Reid pointed to the BioCity UK Life Science Start-up Report. “The last one we produced, which was for 2011 to 2014, showed 62 per cent of start-ups in the life sciences in Scotland were from university spin-outs; the second highest in the rest of the UK was the West Midlands with only 38 per cent and Cambridge had just 20-25 per cent. That shows the strength of the research base in Scotland.
“Scotland’s start-ups made up 13 per cent of the UK’s total but only accounted for 5 percent of the investment raised. Scotland had the same number of start-ups as London, but only raised one-seventh of the investment. Is that about availability of finance or ambition? It’s a 50-50 split.”
He added: “Ambition is raised when you see successful people raising big money in your own backyard and you think you could do the same. People are limited by the stratification of finance – if you go to your most immediate source and it can only give you £100,000 then that’s what you write your business plan around. London’s only an hour and 20 minutes away. Money will go where the quality opportunities are.
“There’s a shortage of deep pockets that can do multiple follow-on investments – £100,000 doesn’t get you anywhere in life sciences and it lessens the appetite of angel investors to do it again in the future.”
Dunlop responded: “That’s a really good point – Scotland has one of the best angel investment communities in the world, but it and the life sciences sector rarely meet and certainly not in a therapeutics context. That’s a good example of us having two pockets of excellence but we haven’t found a way to bring them together yet.”
“One of the challenges we have at the moment is that funding streams are targeted at individual sectors,” explained Clugston. “Universities can get money from the research councils or the Scottish Funding Council, industry can get money from Scottish Enterprise, and the NHS is different as well. We’re going into territory where we have to work together and the current funding streams don’t lend themselves to that. We’re falling short of attracting funding because we don’t fall into the right categories.”
Milligan commented: “Angels investors in Scotland are fabulous, but there’s only so much money that they’re willing or able to invest. Carol mentioned the research councils – the average research council grant falls somewhere between £500,000 and £750,000 at the moment – that essentially pays for the equivalent of one full-time member of staff. Why does someone think £100,000 will go anywhere?”
Reid added: “The bit that doesn’t get done well – and this is a big opportunity for Scotland with its single NHS – is for an end customer to declare its problems and then have companies coming together to provide a solution to that problem, rather than coming up with a piece of technology and then asking where it’s useful.
“Market-led innovation rather than technology-led innovation is cheaper and easier to fund. I’ve also noticed NHS Scotland is more open about talking to companies at an earlier stage. That’s really tough in England.”
“That’s exactly why we setup the HIP,” Johnstone pointed out. “We’re seeing more companies starting up around that market need, not a technology. From an investor’s point of view, it’s like falling off a log.”
“Toby’s point is really valid,” added Sibbald. “Our approach has been to have some technology push and some market pull, with a multidisciplinary team in the middle. Science and research is global but healthcare is local.
“We’re trying to work collaboratively to get, for example, a diagnostic test into the NHS, and come to an economic arrangement with the health service so it gets access to that test. It’s not necessarily going to pay money up front for it but, as part of that collaboration, it will act as our global reference customer to demonstrate the viability of what’s been built and then commercialise that globally. Our business model is to say that if everyone is chipping-in and working on a particular solution then when a commercial product comes out the other end there’s a revenue royalty distribute to everyone who’s played within that game.”
BQ group account director David Townsley asked what Scotland had to offer to encourage entrepreneurs to start life science companies here? Brown listed reasons including the availability of finance, facilities, support, strength of the universities’ research and talented graduates.
Clugston pointed to two examples of people being attracted to the University of Glasgow. “One is Professor Andrew Biankin, who moved his research group from Australia to Glasgow to do precision medicine because he’s looked the world over and he thinks there’s nowhere else he could possibly do it,” she said.
“The other example is a German company that is leading the development of the coils for the seven-Telsa magnetic resonance imaging (MRI) scanner at the QEUH. The owner of that company was sitting with multiple job offers from the US but chose Scotland because he sees the NHS is open to working with him. He can do things here he can’t do anywhere else.”
Sibbald pointed to the “valley” that entrepreneurs need to cross between research and commercialisation. “What we’ve done in Scotland is make that valley narrower and not as deep as in other parts of the world because we’ve got a collaborative environment and we’ve got a willing and open NHS,” he said.
Despite only becoming BioCity Scotland managing director in March, Reid has already seen why entrepreneurs should pick Scotland. “I’ve noticed three areas: the quality of the research and the talent in the universities; the size, which means there’s a community you can be introduced to and the unitary nature of the health service; and funding, because despite the challenges, the public grant funding available here is amazing compared to other places and the angel scene is phenomenal.”
Partlett said Scotland’s big advantage is its size: “You can get immediate access to the Scottish Government if you need it.”
Townsley also asked how universities were engaging with entrepreneurs? “There’s been a culture change in recent years at many universities,” explained Clugston.
“Nowadays, the universities are thinking right from the word ‘Go’ about the impact of their research. We’re reaching out to companies and think a lot about how the research is going to be used.”
“From the investors’ perspective, the shining light should be unmet market need and you should work back from that,” Dunlop emphasised.
“That will be controversial in some university quarters, but we as investors often see university-sourced opportunities that are ‘solutions in search of a problem’ and ultimately they’re not fundable for that reason.”
Milligan suggested: “Universities need to look really carefully at having staff who can move rapidly when industry addresses a question to us. Most of our staff are committed to working on a particular project and we can’t easily transfer them.”
Simmers agreed: “It is a challenge. We’re a much smaller institution, so we can turn things around that little bit quicker, but I agree with Carol – there are very few universities that aren’t focused on a specific question. Researchers aren’t in an ivory tower anymore. That’s been a massive culture change.”
As the debate drew to a close, the way in which the sector communicates – both with potential collaborators and with students, pupils and parents – was discussed. Quigley asked: “Should the convergence and cooperation begin with a marketing exercise to advertise these capabilities on a global basis?”
“Marketing the diversity of the life sciences sector in Scotland internationally can be challenging,” Brown admitted. “Part of the work we want to do with our industry leadership groups and others is to think about marketing.
If we can’t market everything all at once to the same level then we have to think more strategically about marketing campaigns around particular activities. At the moment, we’re supporting our companies to trade internationally. The majority of our companies are medical technology or pharmaceutical support service, so when we’re marketing Scotland we focus on those two areas.
“When we’re thinking about how to attract others to Scotland for collaboration or investment then there are a number of themes that have come through strongly in terms of what the international community is interested in: regenerative medicine; precision medicine, particularly our assets around our health record system and our connections with our academic base; and animal health, such as livestock research, along with fish and plants.”
Clugston said the Scottish Funding Council had put aside money for postgraduate degrees that help to plug industrial skills gaps and gave the example of the master of science degree in precision medicine, which is training graduates to enter the emerging supply chain. “That’s a small example, but there are pockets where we’re developing courses by sitting down with industry so they can tell us what they need,” she said.
“That has to come at an undergraduate level as well,” added Simmers. “We need to look at what we’re delivering and is it fulfilling industry’s needs. You can go even further back. If you look at schools then the careers advice is dreadful.
“This is a massively-exciting sector and there are so many opportunities for these graduates. But I know very few parents who understand what the life science sector is. There’s a visibility problem. It’s such a booming sector and the general Scottish population have no idea about it.
“Right from day one we need to make sure students are involved with industry so they can see the opportunities. I would love for those opportunities to be global, so graduates bring knowledge back to Scotland.”
“It sounds to me like the life sciences needs a public relations (PR) campaign,” said Quigley. “Perhaps a collaborative PR campaign that would raise awareness of the industry among the public and among students.”
Dunlop agreed. “It needs to reach the kids whose parents aren’t scientists. The only kids who want to be scientists are those whose parents are scientists. There’s something
missing there. “Something needs to explain the social impact of the sector in layman’s terms. How do we get across more concisely and more effectively that there’s not another sector on the face of the Earth that has more social impact?”
“Sex it up,” was Quigley’s solution.
“I’m not knocking graduates, but companies have done very well from modern apprenticeships and that’s something we should expand,” added Bateman. “The people who need to talk about the industry are the young people who are starting these companies.
“We need ambassadors, people who have only been working in the industry for a few years, to explain what it’s like. Make it sexy, make it fun. A lot of the young people who work in our labs do a fantastic job of explaining what it’s like.”
He also highlighted the need for staff with good manufacturing practice (GMP) skills. “We can’t find those people. How do we train people to do that? No disrespect to graduates, but it has to be more focused.”
Partlett said: “I’m passionate about apprentices. Getting apprentices is hugely beneficial. You need to get to people before they’re 13 years old. You need to get them to pick science, technology, engineering and mathematics, which are harder, and that brings you up against the school targets system in which schools just want to get good results, so children take easier subjects.
“There’s also the ‘outcome’ mentality that says if you go to university then that’s a great outcome but if you go on an apprenticeship then that doesn’t count. You need to get teachers to be the ambassadors for the sector because they’re there all the time.”
Brown added: “We’ve had a lot of people spending time with companies as interns. It’s sometimes a challenge for companies to take interns, so we need to be more open to putting in more effort. It pays back in the future.”
In conclusion, Brown added: “We started with David’s comments about fiefdoms, but it’s been good to highlight it’s not just about fiefdoms between organisations but about fiefdoms between sectors. How do we create an environment in which people from outside life sciences can work more closely with us? Perhaps there’s some more work to be done in breaking down the fiefdoms.”
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