The document is a report on the state of the UK drug discovery industry in 2019. It finds that most small and medium enterprises in the industry are service and supply companies, employing fewer than 20 people. The majority of drug development assets held by UK companies are focused on cancer, anti-infectives, and central nervous system disorders. Artificial intelligence and cell and gene therapies are seen as promising but in need of further validation and data. The report recommends that the government increase funding support and that the Medicines Discovery Catapult continue connecting companies, providing access to datasets and technologies, and helping to validate new models like complex cell models.

1. State of the
Discovery Nation 2019
Joint report by Medicines Discovery
Catapult and the BioIndustry Association
Chris Molloy

2. © 2019 Medicines Discovery Catapult. All rights reserved.
Chris Molloy, CEO

3. © 2019 Medicines Discovery Catapult. All rights reserved.
Introduction to Medicines Discovery Catapult
DISCOVERY SCIENCE
& TECHNOLOGY
INFORMATICS SAMPLES & DATA VIRTUAL R&D SYNDICATES
Designed to address the needs of our UK drug discovery community and change the shape of R&D:
BETTER DATA FASTER
ACCESS TO UK RESOURCES & EXPERTISE

4. © 2019 Medicines Discovery Catapult. All rights reserved.
State of the Discovery Nation 2019

5. © 2019 Medicines Discovery Catapult. All rights reserved.
Key insights
• 80% of SMEs in the community are Service and Supply companies, accounting for 90% of employment
• 60% of SMEs have fewer than 5 staff; 80% have fewer than 20 staff
• 70% of UK SME drug assets are in cancer, anti-infectives, or central nervous system (CNS)
• AI with Cell & Gene therapies are the 'hottest' areas of interest across the community
• A majority of the market understands the Medicines Discovery Catapult offer
• UK SMEs are calling for government support around funding and tax incentives
• 80% have significant concerns about Brexit’s impact on recruitment
• 90% of companies need AI and currently 75% of AI spend is on data access
and curation
• Complex Cell Models show promise to reduce animal usage but need
validation before large-scale adoption

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SME market overview
• The sector is strong with SMEs at its heart
• The CRO and Advisory sectors are vital components in today’s R&D landscape
• UK SMEs are working on over 900 new drug candidates
• Non-small molecules now represent over half of current national portfolio
• Cell & Gene Therapies are an area of intense R&D interest and investment
• Collaboration between SMEs – and SMEs with service companies is of paramount importance

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Company numbers and types
The UK science base should
support 50 more biotech
companies at early
clinical stage
1,500 UK medicines
discovery SME companies
80% Service and Supply
20% ‘Core’

8. © 2019 Medicines Discovery Catapult. All rights reserved.
8,000 in research
outsourcing
5,000 in Material Supply
Company staff numbers
UK medicines
discovery SME’s
employ 21,000 people
'Core' and Advisory
companies productivity is
delivered through projects.
Service companies
productivity through growth
in people and services

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The Service and Supply sector
Three segments are
responsible for over 80%
of all Service and Supply:
Advisory – 33%
Outsourcing – 29%
Material Supply – 22%
Advisory are the most
common; 80% employ
fewer than 5 people

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The majority of SMEs in the
Core sector employ 4
people or less
The ‘Core’ sector
Small molecules are no
longer the majority
therapeutic modality in UK
SMEs medicines discovery
Impact of Cell & Gene Therapies

11. © 2019 Medicines Discovery Catapult. All rights reserved.
Asset owner snapshot
• UK’s Cancer cluster is world-class, supported by a cohesive research community, including charity
• CNS is heterogenous, with dementia showing particular focus and pioneering funding models
• Anti-infectives cluster is significant but faces commercialisation challenges
• Respiratory and musculoskeletal diseases have relatively few preclinical companies

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70% of SME assets
are in cancer,
anti-infectives or CNS
The ‘Core’ sector assets by therapeutic area
ca 900 assets in R&D

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‘Core’ sector SMEs by therapeutic area
There is a risk that the UK
is losing the critical mass of
translation experience in
respiratory and
muscoskeletal
Cancer cluster is strong and
supported with world
leading science, funding &
coordination
Lack of commercial pull in
anti-infectives means
support is needed all the
way to adoption

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The SME community is aware of MDC’s offer and is increasingly likely to
recommend others to work with MDC
ca 55% are aware and interested in the collaborative R&D offer
ca 30% of the community are interested and want to know more
Respondents asked MDC for collaboration building and enabling access to
‘science industrialisation’ services
75% recommended the government should prioritise direct grant funding over
in-kind or infrastructure support
Sector view of MDC and government support

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Sector requests of MDC
Collaboration
Connecting and linking
collaborators, and brokering
introductions between
larger and smaller players
Access to science
Providing niche
technologies, and access
to datasets and
screening libraries
New models of
engagement
Engaging early with
companies and being able
to ‘invest’ in joint projects

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A big pharma view – fund SMEs and their substrate too
“…The field still does not understand the fundamental biology of many diseases well enough
to validate drug targets
Cancer has demonstrated the progress that can be made when the cause of a disease is
identified and becomes affordable to study at massive scale.
How can the research community replicate this in cardiac disease or CNS disease by
mapping the signatures of disease at a cellular level?
The infrastructure and technologies that drive this understanding ...are the bedrock that
allow innovation and SMEs to start up. These datasets are the input for AI and set the
standard for cell models and should not be neglected as a long-term investment…”

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AI in drug discovery
• AI is now a core technology for drug discovery
• AI budgets are growing; pharma companies are moving AI in-house
• AI is most valuable when applied alongside domain expertise
• The industry wants benchmarks and comparisons between AI systems
• Small companies prefer to buy AI products and services; large companies prefer partnerships
• The right data are key: acquisition and preparation of data take 75% of resources
• MDC can help by making datasets available, nurturing vendors and linking the sector

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AI user needs
The field is still being held
back by the availability of
well-curated, large-scale
data, and models to make
available via providers to
consumers
AI approaches are being
used in all areas of modern
drug discovery
90% of UK SMEs felt they
needed data science

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How can UK plc support the adoption of AI for Discovery
AI in drug-discovery
companies can grow and
thrive in the UK
AI is now seen as a core
part of industrial drug
discovery, but measuring
impact and validation
are seen as highly
complex

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Community recommendations for MDC
Given the pace of change in the sector, MDC was asked to:
• Make datasets available, particularly in ADME and toxicity
• Increase advisory capacity for very early stage companies and vendors
There is a need to:
• Bring together AI buyers and sellers
• Identify the problems that AI should solve first
• Improve mutual understanding of the services offered and required

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Complex Cell Models
• Complex cellular models are seen as a valuable preclinical research enhancement, if used correctly
• UK SMEs have potential, reputation and skills to put valuable models into industrial use
• Improving reproducibility and developing validation data are current priorities
• Regulators and pricing will drive adoption
• MDC can help by validating models and supporting pre-sales; to bring together the community

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Interest in complex cell models across the R&D process
They need models
that are validated,
reproducible,
and easy to use
CCMs are needed by the
84% of companies for
target identification and
validation
Excellent data skills are
needed to manage and
interpret the increased
and novel outputs
from new models

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Interest in complex cell models by therapeutic area

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How can UK plc support the adoption of complex models
48%
16% 12%
12%
8%
4%
Alone

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Community recommendations for MDC
UK SMEs are asking MDC to support the validation of Models and their
pre-sales process by demonstrating and de-risking them
SMEs recommend that MDC brings together the community and
shares expertise through events and direct collaborations
The field of new cellular models is very broad, therefore MDC should
focus on selected areas of commercial potential interest, where the
risk remains too high for private funding

26. © 2019 Medicines Discovery Catapult. All rights reserved.
Key insights
• 80% of SMEs in the community are Service and Supply companies, accounting for 90% of employment
• 60% of SMEs have fewer than 5 staff; 80% have fewer than 20 staff
• 70% of UK SME drug assets are in cancer, anti-infectives, or central nervous system (CNS)
• AI and cell and gene therapies are the hottest areas across the community
• A majority of the market understands the Catapult offer
• UK Companies are calling for government support around funding and tax incentives
• 90% of companies need AI and currently 75% of AI spend is on data access and curation
• Complex Cell Models show promise to improve predictability but need validation before large-scale adoption

27. © 2019 Medicines Discovery Catapult. All rights reserved.
Q&A
Questions

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Accessing the report
Download the full report on the Medicines Discovery website: mdc.link/sodn19
Email will be sent with link to slides and a recording of the Webinar

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