Lab crunch: British science has nowhere to go

OXFORD, England, June 20 (Reuters) – For Ros Deegan, the excitement of raising $100 million to expand a biotech company among Oxford’s dreamy towers soon faded: unable to find a bigger lab, she had to routinely work at home.

Not far away, in the rival academic center of Cambridge, biochemist Catherine Elton, persistently frustrated by similar real estate problems, taught herself how to turn old offices into laboratories to further expand her bioactive protein business.

The two businesswomen in Britain’s fast-growing life sciences industry are far from alone.

Real estate consultancy Bidwells put the demand for laboratory space in Cambridge at 110,000 square meters (1.19 million square feet), but only 7,000 square feet is available. In Oxford, demand is for 850,000 square feet with only 25,000 ready to go.

The shortage of state-of-the-art labs in cities is just one example of how the lack of an overarching strategy for Britain’s life sciences sector is holding back growth for some of the country’s most promising companies, according to Reuters interviews with 17 people with knowledge of the challenges.

Industry figures, from biotech chiefs, property developers, industry sources to investors, spoke of growing frustration with Britain’s lack of a coherent approach to everything from lab space to funding, talent, suppliers, affordable housing, transportation, water and power.

At a time of rapid innovation, when the United States and the European Union are spending big to help companies switch faster to newer technologies in the next wave of industrial transformation, they say Britain risks being left behind.

“It’s a big barrier when you’re trying to set up a business and you can’t find a lab for it,” said Elton, founder of Qkine. She said the latest office conversion took more than 20% of her company’s time in the year before it opened.

Meanwhile, Deegan counts herself lucky that OMass Therapeutics, the drug discovery company she runs, only had to wait a year from fundraising until it moved to a larger site.

“I couldn’t go to work because there just wasn’t a place to sit. You ended up in the kitchen,” the chief executive said.

‘DIED BY A THOUSAND CUTS’

Life sciences is set to be one of the largest sectors in Britain. Generating 94 billion pounds ($118 billion) in 2021 and employing more than 280,000 people, it allows the government to boast that Britain is on its way to becoming a “scientific superpower.”

In biotech, Britain trails only the United States in activity, according to McKinsey consultants, buoyed by discoveries emerging from the universities of Cambridge, London and Oxford, and aided by a centralized health system for clinical trials. .

That has led to an explosion in venture capital, much of it coming from the United States. But in small towns that are home to old universities and strict planning laws, the delivery of new infrastructure has not been able to keep pace.

While developers say capacity is expected to improve in the coming years, British companies specializing in areas such as cell and gene therapies, genomics and synthetic biology may be falling short of reaching their full potential, many experts say.

Diarmuid O’Brien, director of Cambridge Enterprise, which works to commercialize research at the university, said the current environment led to a “death by a thousand cuts” as many spin-offs were sold to US companies or moved to the other side. of the Atlantic.

Humira, for example, one of the best-selling drugs in the world owned by the American company AbbVie (ABBV.N), was based on technology that came out of Cambridge. illuminate (ILMN.O)an American company with a market value of $33 billion, has a DNA sequencing approach also discovered in Cambridge at the heart of its technology.

The government of Prime Minister Rishi Sunak has acknowledged that there is a real estate problem and is seeking to reform planning regulations, asking local authorities to take into account research and development needs when assessing applications.

“Just last month we announced more than £100m to provide world-class lab space to help unlock the full potential of UK researchers,” a government spokesperson said, referring to funding designed to upgrade infrastructure. and the team.

RECORD RENTALS

The race to develop and retain new technologies is taking place around the world, with Western governments like France touting cheap energy and fast-track planning systems to attract next generation industries like the gigafactories of batteries.

Gordon Sanghera, who was determined to list his Oxford Nanopore Technologies (ONT.L) in Britain, he told Reuters he often thought the country’s success was despite the support available, not because of it, and that Britain needed to realize it was competing with others.

The lab shortage is not only driving rents to record levels (Bidwells says they are up 25% for purpose-built lab space at Oxford in 2022), it also means that access to labs may become a critical issue. for a company to be successful or not.

To reach its full potential, Britain’s biotech industry says it needs small businesses to be able to access decently rented shared lab space with flexible leases, before they can move into stand-alone labs with potential for expansion.

The company’s founders also say they want to be as close as possible to the heart of academic centers, rather than more distant science parks, so they can take advantage of the group effect that comes from sharing experiences and contacts, taking advantage of transport links and recruit talent more easily.

Michael Chen moved to Cambridge from the United States in 2012 to pursue a PhD in chemistry. He later formed Nuclera with two PhD colleagues to improve the accessibility of proteins for research and drug discovery.

He said Cambridge offered a cheaper location for drug discovery than the US city of Boston, the world’s main hub, due to lower rents and wages, but a lack of growth capital and space meant he had trouble expanding. those businesses.

The fact that many scientists spend time overseeing the renovation of an old building puts off executives who have raised funds and launched spin-outs before, he said. “They’re just going to move to Boston and make their lives easier.”

‘NOT KEEPING UP’

Lab developers say more space is in the works, but the challenge of building large modern labs in densely built university towns cannot be ignored.

“Basically, these are pretty small cities, experiencing extremely fast growth rates,” said Artem Korolev, director of developer Mission Street.

Anna Strongman agreed. Leads a joint venture between the University of Oxford and Legal & General (LGEN.L) to build laboratories and houses. Strongman said the industry needed to address the impact new projects would have on housing, traffic, energy and schools to keep the local community in the loop.

But going further, with more houses and train lines, would require more government involvement.

“We are a country that does not have a growth solution and there is one in Oxford,” he said. “There is incredible potential.”

Pioneer Group, which provides funding and lab space in Britain, said action was needed now to tackle “crazy” demand. “If the planning takes years to come to fruition, the opportunity may have been missed,” said CEO Glenn Crocker.

Alistair Cory, director of Oxford’s Begbroke Science Park, welcomed the government’s renewed focus on supporting the life sciences sector, saying a leadership vacuum in recent years had resulted in glacial progress.

“We are not keeping up with those who are accelerating the fastest around us, be it North America, parts of Europe, parts of Asia and particularly China,” he said.

Back in Cambridge, Elton de Qkine resigns himself to facing another real estate challenge in the near future.

“Every two years or so, if you’re successful, you need to move, and that’s detrimental,” he said. “It affects the speed at which you can grow.”

($1 = 0.7994 pounds)

Reporting by Kate Holton in London and Toby Melville in Oxford; Edited by David Clarke

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