The BIA – which represents biopharma firms and technology developers – backed the scheme in a report published last week, arguing that the combination of Government and private funding has helped foster innovation in the UK drug sector.
The organisation told us the scheme “has already helped identify many promising R&D projects that are working to deliver against unmet medical needs, creating opportunities for the health service to deliver more innovative treatments to patients.”
In the report, the industry group cites vaccine developer Absynth Biologics, protein therapeutics firm Arecor and autoimmune disease-focused Modern Biosciences as examples of smaller developers that have already benefitted.
Proof-of-concept to clinic
The Biomedical Catalyst scheme was launched in 2011, with Conservative Prime Minister David Cameron explaining that it has “the explicit aim of getting the best ideas through the proof of concept stage so we can get them into clinical development.”
The idea is that Government grants given to small companies will encourage private investment by reducing the risk of failure.
To date, £250m ($391m) has been granted to 180 projects that have attracted £100m worth of private investment.
This was reiterated by the BIA, which told us “By taking part in the scheme, these small organisations have been able to access match funding from private investors, as a BMC award effectively de-risks the investment; the project has been assessed by an expert panel, and the investment risk is shared.”
We asked the BIA why the UK biopharmaceutical sector deserves Government support, and the organisation told us making early phase research more attractive to investors is a challenge.
"The biotech industry sector may not seem attractive to non-specialist investors and is often overlooked in favour of fast returns from more traditional investments. The BMC fills a crucial structural gap in the UK investment pathway earlier in company development where private sector investors will not venture alone."
The spokesman warned that: "If the UK fails to sustain this mechanism that de-risks a promising innovation to a stage that Venture Capital and other forms of financing will come in, then the UK stands to lose its position as Europe’s leader in this global and innovative industry."
He also told us that despite the Government - and therefore taxpayer derived - funding, companies awarded grants are under no oblication to reflect this in what they charge for drugs developed as a result.
"The purpose of the BMC funding is to translate innovative discoveries from the lab to generate the clinical and non-clinical data that will make the drug attractive for public investors and shareholders. Without this funding these ideas would not be able to progress to the development stage, and it is independent of any consideration for pricing and reimbursement of the marketed drug."