Specialist Corporate Partner, Richard Phillips, reflects on this year's key pharmaceutical and life sciences sector developments in business.
Beyond policy, 2019 has seen pharma coping with global trends and challenges, exacerbated by Brexit. "Economic slowdown, reducing returns on investment, pressure on showing value compared to other treatments, chasing smaller capital values in transactions" are all having an impact, explained Richard "But the UK has the added local difficulty of the ‘B’ word which lengthens that list with regulatory uncertainty, trading uncertainty and the need to reposition in Europe."
Making the Most of Things
Despite all the uncertainty industry has had to operate within, negatives can become positives. "Disruption leads to innovation," explained Richard. "Diminishing returns lead those who are forward-thinking to investigate and explore new avenues. The UK pharmaceutical and life sciences industry will adapt and thrive because it has a world class core strength; our mindset of creation and innovation allied with a natural inclination for trade and business will see to this."
Richard is confident that the UK’s mix of Big Pharma, small and medium-sized pharma, generics companies, start-up and early stage ideas businesses have been well placed to innovate, think about R&D in this faster moving world, as well as restructuring and outsourcing components.
One example of this is the Stevenage Bioscience Catalyst where major organisations including GSK, the Cell & Gene Therapy Catapult, LifeArc and GE rub shoulders with academics and start-up companies. Richard added: "Together, these individuals and start-ups have raised about £1bn in funding." It’s also been announced as one of six new Life Sciences Opportunity Zones in the UK.
So much has already been achieved in 2019, with Genomics England’s 100,000 Genomes Project and its involvement in research projects such as Discover-NOW and DATA-CAN, which Richard calls "world-leading". Plus, thanks to UK Biobank’s whole sequencing of 500,000 people, with a view to enhancing predictive analysis, industry has proven that it can innovate in times of uncertainty.
"A lot of innovation and development has been happening at a small scale, and Big Pharma is much closer to solving the practicalities of marrying up its leverage with next generation opportunities," explained Richard. Although it hasn’t been without issues, "the difficulty has been aligning the cultural (and inevitable and often essential) governance and more bureaucratic elements of the acquirer with the fleet of foot entrepreneurial culture and light touch governance of the innovator."
Off Patent
2019 has also seen companies identifying opportunities in drugs that are heading off patent. In February, Pf reported the potential of the biosimilars market and how momentum was crucial following the patent expiry of adalimumab in October 2018.
“Over the year, we have seen entrepreneurial companies, small- and medium-sized, move to take advantage of certain products of a certain age,” reflected Richard. “The regulators have looked to examine these deals carefully and shut down anti-competitive actions which could or do follow, including price hikes. But improving the lot of the end patient whilst allowing a commercial upside for the provider is invigorating for the sector and allows products to take on a new lease of life.”
2020 and Beyond
As Brexit conversations continue into the New Year and a General Election result will be known shortly after this article is published, industry must keep its eyes open to what’s happening in the here and now.
"There are always challenges in business and the pharma sector is no different," concluded Richard. "In my view, the deep-seated opportunities will undoubtedly trump the inevitable practical difficulties of our time, which will take up energy to resolve, in 2020 as they have in 2019."
Read the full article in Pharma Field.