Manufacturing the right strategy

Manufacturing the right strategy

Looking ahead to Scotland’s life sciences dinner and annual awards in February, Dave Tudor, co-chair of the Life Sciences Scotland Industry Leadership Group, hails the successes so far of the Scottish life sciences strategy.

Few business events can match Scotland’s life sciences dinner and annual awards. Each year, more than 800 people gather in Edinburgh to celebrate the achievements of the industry over the previous 12 months – and to have a giggle at comedian and host Fred Macaulay desperately trying to pronounce the imaginative names of life science companies and the even-more weird and wonderful names of their drugs.

“It’s a great chance for us to recognise companies and individuals,” explains Dave Tudor, vice president for the primary supply chain at pharmaceuticals giant GlaxoSmithKline (GSK) and co-chair of the Life Sciences Scotland Industry Leadership Group. “It’s important to showcase the quality of the research being conducted by the finalists.

“It’s one of the biggest dinners run by any sector in Scotland and a fantastic opportunity to both conduct business and connect people – before, during and after the dinner. That connectivity and networking is very important.

“The dinner also gives us a voice and a focal point in the year. A lot of hard work goes into choosing the right keynote speaker and ensuring the speech delivered by Lena Wilson, Scottish Enterprise’s chief executive, lands the right messages.”

Connectivity is also one of the key tasks of the industry leadership group, which Tudor co-chairs alongside Paul Wheelhouse, the Scottish Government’s minister for business, innovation and energy. Such groups exist across all six of the major sectors of the Scottish economy.

Tom Stratford Prostrakan KKThe group brings together representatives from academia, industry and the public sector, including the Scottish Government and the National Health Service (NHS). It offers the opportunity for the sector to voice its opinions to government and vice-versa, as well as providing a joint voice to the rest of the economy. The main task for the group is to implement the Scottish life sciences strategy, which was launched in 2005 and updated in 2011. The strategy aims to double turnover within the sector from £3.1 billion to £6.2bn by 2020 and double the gross value that the sector adds to the Scottish economy each year from £1.5bn to £3bn.

Three pillars underpin the strategy: to anchor life science capabilities in Scotland; to build on them; and then attract further investment. Innovation, skills, funding and collaborations and partnerships are the focus within the strategy.

“If all goes to plan then we will relaunch the strategy early next year [2017] and people will be able to see copies of the strategy for the first time at the life sciences dinner,” Tudor explains. “In recent years, there’s been an increase in life sciences funding in Scotland and growth in the number of small and medium-sized enterprises (SMEs). The sector is growing at around 4% each year, which is good.”

Tudor adds: “We’ve also brought about a louder and more-focused voice for manufacturing. One of the challenges we face in Scotland is that we have world-class medicinal and technological research but we struggle to convert that intellectual property into long-term commercial and sustainable benefits.

“Our manufacturing sector is relatively small – it only accounts for about £750 million out of the £3.3bn value of the life sciences industry at present. That’s one of our big opportunities.

“We’ve launched a manufacturing strategy for life and chemical sciences, which is focused on reshoring the supply chain, the commercialisation of technology, building our future leaders and looking at a support role with Scottish Development International in bringing in targeted direct investment.

“Everybody who comes to Scotland raves about the fact we can get the government, the industry, the NHS and the universities around the same table and make things happen quickly. You can get your arms around Scottish life sciences more easily than you can anywhere else because there’s a willingness by all four of those parties to work together.”

Manufacturing is at the heart of Tudor’s ‘day job’ at GSK. He overseas seven factories globally and about 200 suppliers that produce around 200 active pharmaceutical ingredients for GSK.

Two of his factories are in Scotland: Irvine produces 20% of the world’s penicillin, with 16 patients each second globally taking drugs made at the facility; while Montrose makes a range of 11 active ingredients, used by some 20 million patients every day, including some for respiratory medicines and some to treat the human immunodeficiency virus (HIV).

GSK has invested £160m in Montrose over the past five years and recently announced a further £110m boost for the plant. In total, the company employs around 1,000 staff in Scotland, including 450 at Montrose and 400 in Irvine. Looking at the wider picture, Tudor points to the macro-economic opportunities that lie ahead for the sector.

Globally, the population is growing, people are living longer and the income held by the middle classes is increasing – these three strands create a larger market for the medicines and the medical devices developed by life science companies.

He highlights the benefits of the patent box, the UK Government initiative that allows companies to pay a lower rate of corporation tax on profits earned since 2013 from their patented inventions. “The UK has one of the most competitive taxation strategies anywhere in the world,” Tudor adds. “Regulations are quite rightly becoming tighter and some parts of the world are struggling to meet those requirements. But that’s not a problem for the UK or Scotland – we can rise to those higher standards.”