Interview with Kate Bingham, Managing Partner at SV Life Sciences and a member of MedCity's advisory board
Kate Bingham is upbeat about the environment for biotech entrepreneurs in London and the greater south east, though she is clear that there is still work to be done.
“We do have cash, and good deals generally get funding,” she says. “It’s true that, while this region’s spending on R&D in medical sciences is broadly equivalent to Boston’s, Boston has around four times more cash to spend on early stage enterprises, so we don’t have as much money. But for sure there’s funding for good deals.”
As SVLS’s biotechnology lead, a role she has held since 1991, Kate has worked with a range of early-stage companies that have successfully taken therapies to market. She also has experience of working in pharmaceutical business development in Cambridge, Massachusetts, giving her a direct insight into how the UK and US centres compare. She points out that, while the number of traditional venture capital funds has shrunk in recent years in both the UK and the USA, the UK is developing exciting new sources of cash that are filling the gap.
Charities such as Cancer Research UK and the Wellcome Trust, have, she says, “big bold ambitions”, and pharmaceutical companies are increasingly acting as venture capitalists. “They want to see the best new companies and technologies, and invest in them,” she says. “They are looking beyond the US, which has been well picked-over, and the UK biotech sector is far stronger than that in continental Europe.”
So if entrepreneurs are struggling to raise funding for their concept, they should perhaps be asking themselves some hard questions. “Entrepreneurs could sometimes do better,” Kate says. “Lots of proposals are not well put together and thought through.” So what does she look for when she meets would-be biotech entrepreneurs?
The first major selling point is novel, interesting, high impact science that addresses an area where there is significant demand; given the high attrition rate of drug development, she points out, investors reasonably expect that if a drug is successful it will deliver a high return. They also need to be confident that the IP has some level of protection, so a patent application is a must.
Equally important is a clear plan that shows a reasonably short route to each key milestone, such as proof of concept in animal models or the completion of phase I safety data. “The problem with many plans is that they are unrealistic,” Kate advises. “They have got to be fundable, and the more highly cost-efficient the approach is, the better I like it. Companies that estimate five years to clinical trials will not be funded because investors just can’t take that level of uncertainty. The usual investment period is five to seven years.”
The best investments are made when a team can demonstrate their hypothesis through relatively small clinical trials. As an example, Kate cites Ophthotech, a US company funded by SVLS to develop drugs for ophthalmic diseases, which was able to demonstrate astonishing vision gain in a 22 patient Phase 2a study. “The compelling small trial catapulted the company to raise a large sum to progress a large Phase2b study. It is now worth over $1bn and running pivotal trials,” she says. “It’s what investors really like. If you need to do a large population study at that early stage, it’s just not efficient.”
The third major selling point for investors is a management team with demonstrable experience. “Uber smart young people won’t be convincing if they have never developed a drug before,” Kate says. “It’s not enough to just be smart.”
Those experienced managers will invariably have spent much of their careers in large pharmaceutical firms, and that brings Kate to what she sees as one of MedCity’s fundamental tasks – to communicate the greater south east’s rich offer loudly and clearly to international industry and investors.
“Our message to big companies has to be that this region is doing innovative science in a business-friendly environment with regulatory, financial, professional service and clinical trials expertise right on your doorstep,” she says. She points to the NHS and its clinical research arm, the National Institute for Health Research, plus projects such as the UK Biobank and 100,000 Genomes as unlike anything else in the world, supporting the sort of in-depth, long-term studies that can only be done in the UK.
“International pharma is already very interested in this region,” she says. “We are pushing at an open door. There is tremendous scope now to significantly grow the life sciences economy and bring new and better drugs to the people who need them.”