Networking advantage: Steve Bates on BIA’s role in U.K. biotech
Building ties across stakeholders has been key to helping U.K. biotech avert disasters for the ecosystem while fostering growth
As the U.K. has ramped up its status as a biotech hub, it’s been aided by the readiness of the BIA to step in and ward off problems that could have sent the sector in a downward spiral. That, according to CEO Steve Bates, is part of the payoff of the trade organization’s work in building ties with all the players in the growing hub — a lesson that might translate to other regions hoping to build critical mass in biotech.
On The BioCentury Show, Bates, who has headed the BioIndustry Association since 2012, discussed some of the actions the organization has taken over the past year, where having the right touchpoints, expertise and nimbleness allowed it to represent the sector and steer government decisions.
The BIA has largely been credited for its behind-the-scenes work to enable the HSBC deal with Silicon Valley Bank UK, following the collapse of SVB in March. It also helped restore the benefits of R&D tax credits that are seen as seminal to the sector, and is working to enable pension funds to invest in biotechs, which could lead to an influx of capital for the country’s biotechs.
BIA’s relationships with VCs and its network of companies meant it could see the challenges with the SVB collapse coming, said Bates. “We knew that the U.K. experience would be different because we knew that the banking regulations were different than in the U.S.,” and that the organization would need to activate its relationships with government.
“We were able to work very closely, get the evidence that was needed to players senior in government and construct for them a solution.”
While the initial view in government and The Bank of England was that the bank’s failure wasn’t a systemic problem for the country, Bates said, that was clearly not the case for biotech. “Well, it wasn’t for your high street mortgages, for your downtown businesses, but certainly was for the innovation ecosystem,” said Bates, given small companies’ dependence on the bank. “So we were able to pick up the phone and say, hang on a minute, I think this is going to be a systemic problem if we can’t open on Monday.
“And one of the benefits that we’ve got is because we’re a community that’s small enough to know each other and small enough to be networked, we were able to work very closely, get the evidence that was needed to players senior in government and construct for them a solution.”
Likewise, the BIA has been working with government to make the case for R&D tax credits. One example, said Bates, is that cloud computing costs for small companies are an important part of development in some cases.
When the series of changes of governments last year created the “unusual scenario where economic policy was being made on the hoof,” it resulted in an uninformed policy to eliminate R&D tax credits that would have escalated costs dramatically for U.K. innovative SMEs. BIA worked with policymakers to restore the benefits six months later, putting “the rates back to something that’s close to globally competitive, if not better than that,” said Bates.
Bates also discussed the importance of enabling pension funds to invest in public biotechs, as well as how Brexit has handed MHRA both an opportunity and a challenge, and the work BIA and others are doing now on reimbursement to make the country an attractive market for launching drugs. The next shoe to drop is a renewal or refashioning by the end of the year of the voluntary pricing agreement that has “proven very unpopular and moved the U.K. away from global norms,” said Bates. “My hope is that a deal that can bring the U.K. back into global norms in reinvestment terms is what we can have before the turn of the year.”
Join BioCentury, BIA, and special guests on the sidelines of the Jefferies London Healthcare Conference for a CEO and investor event on Nov. 14.