London Mayor Boris Johnson today invited biopharmas, investors, and other stakeholders to discuss his proposal for a £10 billion ($15 billion) “megafund” intended to support drug development in his city and across the U.K.
The megafund—to consist of debt and equity financing—is designed to close the U.K.’s funding gap with the U.S. So too is another biotech funding proposal to be discussed: Tapping into the seven-year, €24 billion ($26.9 billion) “InnovFin-EU Finance for Innovations” program announced last year by the European Commission and the European Investment Bank (EIB).
The proposals are meant to position London as a leading global region for long-term drug development and biopharma growth through new funding models. Discussion of the proposals is planned for a City Hall conference being attended by industry, finance, and research leaders. Invited attendees include executives from Lilly, Pfizer, Imperial Innovations, Silicon Valley Bank, European Investment Bank and JP Morgan, Mayor Johnson’s office said.
“By hosting this conference we hope to harness our role as a global financial center that will bring more life-saving drugs to market and deliver a huge boost to the economy,” Mayor Johnson said in a statement.
As in the U.S., investors in the U.K. have traditionally shied away from the risks created by the decade-plus-long timeframe for drug discovery and development, not to mention uncertainty over whether pipeline drugs will ultimately succeed in trials and win market approval. More large pools of capital and more long-term investment will help the U.K. develop a sub-cluster of mid-sized life sciences companies now lacking, Mayor Johnson and others reason.
The mayor’s proposed megafund would pool drug development projects in a single investment portfolio. The risk to investors would be lowered since successful projects are expected to more than compensate for the potential failure of the rest, according to Mayor Johnson’s office.
In the U.K., EIB already funds investment projects by universities and firms such as tech commercialization company Imperial Innovations and IP commercialization company IP Group. EIB is supporting Mayor Johnson’s conference, which is being hosted by the Mayor’s Office in conjunction with MedCity.
Last year, Mayor Johnson joined London’s three academic health science centers—Imperial College Academic Health Science Centre, King’s Health Partners and UCLPartners—to launch MedCIty, with the goal of advancing life sciences research, development, entrepreneurship and commercialization in London and the East of England “golden triangle” anchored by London, Oxford, and Cambridge.
“If you compare the U.K. to other leading life sciences hubs, we are extremely competitive— we have huge innovation, creativity and entrepreneurial drive, and we are increasingly agile in translating exciting research into spin-out companies. Capital is a key ingredient that grows those companies and brings therapies to market, and at the moment we simply don’t have enough of it,” stated Eliot Forster, MedCity’s executive chair. “If we want to develop another GSK or AstraZeneca, if we want to get a full return on the investment we put into our research base, and if we want better therapies more quickly, this is an issue we have to address.”
In February during a MedCity trade mission to the U.S., Mayor Johnson trumpeted the expansion of another biopharma giant. Gilead Sciences agreed to spend £13 million (nearly $20.5 million) to double its U.K. workforce by year’s end to 600, with the creation of a new U.K. commercial headquarters in the Holborn section of London, as well as expand its U.K. R&D headquarters in Cambridge, and its U.K. headquarters in the Greater London suburb of Uxbridge.