This document summarizes key points from Dr. Glenn Crocker's keynote address on the 2013 UK Life Sciences start-up environment. It notes that while start-up activity and investment in the UK have been declining in recent years, there are signs that large pharmaceutical companies are increasingly focusing on and funding early-stage startups. However, structural challenges around a shortage of experienced investors and difficulties companies face in execution still remain barriers to growth. The talk calls for longer-term, strategic funding from corporations, universities and philanthropic sources to help startups in their early stages and break the cycle of cautious investing.

1. 14.50 – 15.10 – Keynote Address
Exclusive overview of 2013 UK Life Sciences
Start-up Environment: The Fourth Annual
Review of Life Sciences Start-up Companies
Dr. Glenn Crocker

2. Early stage life sciences
Glenn Crocker
CEO BioCity

3. BioCity Group
MediCity-Boots
Glasgow
BioHub- AstraZeneca
Nottingham

4. What
we
do
Create deal flow and
users of services
Catalyse
business
formation
Create environment for
tenant company success
Invest
£
Knowledge of
companies lends to
better investments
Rental
income
Service
income
£
£
Early
return
Exit
investment
£
Investment
return
4

5. The world turned upside down

6. The kids are moving in…
Ø AZ
-­‐
Charnwood,
Alderley
Park,
Lund…
Ø MSD-­‐
Newhouse
Ø Pfizer
–
Sandwich….
Ø NovarDs-­‐
Horsham…
Ø Sanofi-­‐
Dagenham,
Toulouse,
Montpelier
Ø Etc
etc

7. Pharma Incubates
Bayer- Colaborator- San Franscisco
GSK- Stevenage Biocatalyst
J&J- London, Boston, California, Shanghai
• Merck Serono- Israel
But others quietly
stopped:
• Pfizer
• Biogen-Idec

8. No more “I” in IP?
Lead discovery- €80M 5 years
Autism- £25M 5 years

9. Funding innovation
GSK- $50M into $250M Sanderling west coast USA early stage fund
GSK- £265M- Avalon start-up fund- San Diego
Lilly-Roche- Indiana Research Institute - $50M start-up funding
Merck KGaA- €60M addition to CV fund

10. What does this mean for early
stage companies?
Focus on start-ups- the next generation and a sign of things to come
BioCity UK Life Science Start-up review

11. Start-up activity declining in UK
UK
Life
Science
Start-­‐ups
320
315
310
305
300
295
290
285
280
275
2005-­‐2009
2006-­‐2010
2007-­‐2011
2008-­‐2012
Number of life science companies formed in 5 year period

12. University Spin-outs
University
Life
Science
Spin-­‐outs
12
10
8
6
4
2
0
LS Research
Power> 1,000
LS Research
Power < 1,000
• 5 of top 10 universities
for life science spinouts are Scottish
• Correlation between
research base and
spin-out activity
remains

13. University spin out activity
University spin-out activity correlates to quality and volume of research;
Spreading funding more thinly and driving academics towards
commercial collaborations reduces quality and volume of
fundamental research;
Therefore, current policies will continue to act against spin-out activity;

14. Investment in Life science startups
UK
Life
Science
Start-­‐up
Investment
410
400
390
Amount invested in
the period in startups created during
that period
380
10 companies raised £207M ($330
370
360
350
340
330
320
310
2005-­‐2009
2006-­‐2010
2007-­‐2011
2008-­‐2012
Atlas raised $265 million for its 9th fund, committing to focus on supporting early-stage
startups in life sciences and tech. The fund is expected to fuel more than 15 new biotech
startups

15. Investment Pool Growing
Welsh Life Science Fund- £50-100M
Rock Spring Scottish Fund- £50M
IP Group- £30M
Fusion IP - £20M
Imperial Innovations – £30M
Cambridge University- £50M
Nottingham Tech Fund - £40M

16. Structural Investment challenges
remain
Ø Shortage of confident
Ø investors in UK
Ø Lack
of
confidence
>
Dmid
invesDng
Ø Companies
lack
resources
to
recruit
quality
and
execute
plan
effecDvely
Ø Companies
fail
to
deliver
Ø Investor
becomes
more
cauDous
IPO window
opening;
Ø More naïve investors
drawn in;
Ø Poor investment
decisions or
investment at wrong
stage
Ø Pull away

17. How do we break the cycle?
-Early stage funding = corporate, university/public, philanthrop
-longer horizons, strategic investing
-continue to build this base
-VC steps in later

18. The world turned upside down
Large pharma downsizing and moving out
– Small
pharma/bio
moving
in
– Leveraging
past
spend-­‐
increasing
capital
effficiency
Opening research doors
Pharma getting ever closer to early stage
– Academic
collaboraDons
– Venturing
Impact yet to be felt for start-ups- but opportunities abound