Select Committee on Trade and Industry Appendices to the Minutes of Evidence


Memorandum by Bionow (North West Development Agency) on behalf of the North West Biotechnology Cluster

  This submission is provided to the Committee to highlight, in particular, the benefits of appropriate cluster development and the specific role that specialised incubators can play in the development of the biotechnology industry.


1.1  Background

  The North West of England has a proud tradition in pharmaceuticals, life sciences and clinical research and biotechnology, especially biomanufacturing. For example, the first commercial production of a biologic, insulin, was undertaken at Eli Lilly at Speke, Liverpool. The Region has all the components of a true cluster for biomedical biotechnology (though not all at critical mass) and the ability to support the entire business life cycle of a biotech/pharma company—from discovery to mature manufacturing business, from start up venture to global company, from potential to profit. See Appendix 1—Cluster Timeline.

1.2  Industry Profile

  There are some 120 biotech/pharma companies employing about 17,000 in total with 60 in the identified "core" group (13,500 employees) ie R&D based biomedical companies (drug development, diagnostics, devices and healthcare). Of these, five are multi-national pharmaceutical companies (AZ, GSK, Eli Lilly, Aventis and BMS) and account for about 70% of the "core" employees. Assuming a GDP of £70,174 per employee (ABPI figures for 1999) the contribution of this core cluster is £947,349 million. Biotechnology employees are considered to contribute three times the average industry GDP so employment in this cluster is very high value-added. While the majority of biotechnology companies (drug discovery) are not in profit they can attract substantial investment funding. Typically this will be in stages: seed (£100K); first round (£2-10M); second round (£10-30M) and IPO (£100-300M). The North West does, however, house one of the UK's two profitable biotech companies—Powderject (Evans Vaccines). Opportunities for supply chain development within the region are also significant given the trend towards outsourcing among both biotechnology and pharmaceutical companies particularly in R&D, manufacture and clinical trials. See Appendix 2—Regional Map of Companies.

1.3  Cluster Characteristics:

    —  The Biotechnology Cluster in the north-west is focused on biomedicine as this is where the region can play to its strengths in the global marketplace ie therapeutics, clinical research, diagnostics and devices.

    —  The cluster is geographically focused between Manchester and Liverpool, along the M62/M56 corridor and down into Cheshire.

    —  The cluster is characterised by a considerable strengths in the academic and clinical base (Manchester and Liverpool plus Daresbury), relatively few mature (listed) R&D based biotechnology companies and a major pharmaceutical presence, particularly in manufacturing.

    —  The cluster is "Marilyn Monroe" shaped in terms of its component parts—full at the top (science and clinical base) and bottom (major pharmaceutical presence) but with a slim waist (fewer mature biotech companies). The aim is to expand the waistline while maintaining the curves!


2.1  History

  The North West has always had a strong pharmaceutical and chemical company presence and, as previously mentioned, certain of these companies (eg Eli Lilly) had developed biologics manufacturing capability. However, the number of start-up R&D biotechnology companies was relatively small although there was a flurry of technology-based companies (several now listed) started in the late 80s/90s from UMIST eg Tepnel, Osmetech (previously Aromascan) as well as Medeval, a CRO spun out from Manchester University. Notably, both Universities had developed technology transfer companies at this time (UMIST Ventures Ltd and Vuman Ltd) from which these companies were launched.

2.2  Incubators—Catalysts for Clustering

  A second wind of biotechnology company initiation came in the late 1990s with the development of the Manchester Biotechnology Incubator (Manchester Biotech Ltd). The project was initiated in 1994 and founded by members of the School of Biological Sciences[1] and was supported by the University of Manchester and ERDF funding. Manchester Biotech Ltd has since merged with the aforementioned Vuman Ltd to form Manchester Innovation Ltd (MIL CEO: Dr Maire Smith), which is responsible for both the University exploitation activities and the Incubator. The Incubator, formerly opened in 1999 is now full and MIL has spun out, supported or accommodated some 13 new biotechnology companies to-date. It is a clearly recognised "hub" for biotechnology activity and a catalyst for clustering, being centrally located in the "Manchester Health Corridor" and co-located with both universities and hospitals plus The Wellcome Trust Clinical Research Facility, and the NoWGEN facility (to be developed). A second, adjacent incubator/technology development project—the Core Technology Facility—is also underway. MerseyBIO (within the University of Liverpool, Director: Mr John McQuillian) is developing another biotechnology incubator (due for completion late 2002) and acting as another "hub" for biotechnology development in Merseyside. A number of commercial technologies have been identified and potential companies are under consideration.

  It is important to note that both specialised incubators are geographically located within centres of academic research and clinical excellence where there is both the necessary calibre of research and sufficient critical mass to generate new spin out activity.

2.3  The Regional Biotechnology Cluster Programme (Bionow)—Capitalising on Opportunity and

Co-ordinating Potential.

  Bionow is the NWDA's biotechnology cluster development programme with a primary aim to promote, support and develop the biotechnology industry in the North West as part of the Region's economic development and regeneration strategy. The North West Development Agency (NWDA) and, previously, Inward (the North West's Inward Investment organisation and now subsumed within the NWDA), have been most supportive of biotechnology development and have clearly recognised the value of the knowledge economy within the Agency's Business Development Directorate under Mr John Burrows OBE. In 1999 the NWDA identified a number of potential clusters for the region including biotechnology and sought funding for a number of pilot programmes including biotechnology. The Sector Director came originally on secondment (but is now directly employed) from the Biotechnology Incubator in March 2000. Bionow was initiated at that time and then formerly launched by Dr Tom McKillop, CEO of AstraZeneca, in November 2000 at the first Bionow Conference. Bionow has only limited human resource (Director, Project Manager and Administrator/PA) and funding but is able to undertake a number of roles to help develop and support the cluster in the wider framework of the NWDA:

    —  Managing NWDA's biotechnology cluster development programme with a Biomedicine and Healthcare focus.

    —  Information and advice.

    —  Accessing partner agencies, science base, technology transfer operations, professional services.

    —  Trade Missions.

    —  Inward Investment Support.

    —  Network Events, Conferences and Workshops.

    —  Direct Management and Championing of Strategic Projects.

    —  Industry Working Parties.

  Bionow has a membership[2] of some 500 individuals and is supported by an Industry-led Steering Committee/Advisory Group, chaired by Mr Peter Raymond, Chairman of Tepnel Plc. A recent survey to the membership revealed that the Bionow programme is providing value to a majority of the members.

Newsletters (monthly email and quarterly hard copy) 72%
Quarterly network evenings84%
Signposting and general advice30%
Workshops and conferences40%

R&D based SMEs (start up)91%
R&D based SMEs (mature)75%
Universities and Research Institutes78%
Tech Transfer & Exploitation Orgs81%
Professional Support Companies63%
Large Pharma38%

The apparent success of Bionow in a relatively short period is probably due to a number of factors:

    —  Presence of the necessary components for a true traded cluster though not all at critical mass.

    —  Ownership and full support at RDA level.

    —  Small but dedicated executive cluster team with a strong sectoral knowledge and, in the case of the Sector Director, a well established network of private and public sector contracts at regional and national level and credibility in the sector.

    —  Enthusiastic and senior individuals who have taken on entrepreneurial, mentoring or promotional roles for the community and/or provided expert input to major projects above and beyond their direct responsibilities[3].

    —  Co-operation rather than competition between key organisations to develop and support truly regional projects eg NoWGEN (the NW Genetics Knowledge Park).

    —  Well recognised hubs such as the Manchester Bio Incubator (Manchester Innovation Ltd) and MerseyBIO.

2.4  Strategy and Project Co-ordination

  Bionow is able to champion, support and in some case directly manage major projects to aid cluster development. This regional role allows for co-ordination of projects to ensure maximum synergy and added value. These projects, both operational and in development, are set against a number of recommendations (R1-R4) to be set before the North West Science Council by Bionow on behalf of the Biotechnology Cluster:

    —  Recommendation One (R1): Build on excellence and invest in the science and technology base with major infrastructure projects and support programmes.

    —  Recommendation Two (R2): Bridge the academic/clinical to commercial gap by fully developing both the Manchester and Liverpool "Health Corridors" and other regional nodes.

    —  Recommendation Three (R3): Promote clinical trials capability and clinical expertise alongside basic science in order to ensure that genomics and post genomics tools are used and accessed effectively and within a clear framework for health benefit and wealth creation.

    —  Recommendation Four (R4): Although there are notable activities in other parts of the region, support activities should, ideally, be located within the geographic core of the cluster and/or aligned with the key Research Universities and Institutions to maximise effectiveness.
Project TitleRecommendation
Manchester Biotechnology Incubator^R2, R4
Core Technology Facility (CTF)*R2, R4
MerseyBIO Incubator^R2, R4
Institute for Biomedical Informatics*R1, R4
Trustech^R2, R4
Genetics Innovation Unit^R2, R4
National Biomanufacturing Centre (NBC)* R1, R2, R4
Genetics Knowledge Park (NoWGEN)* R2, R4
NW Genomics Consortium^R1, R4
Molecular Imaging Centre (MIC)^ R2, R3, R4
Clinical Research Database^R3, R4
*  Projects Championed or directly managed by Bionow.

  ^  Projects supported by Bionow eg support letters, promotional activities, advisory role etc or are being considered.

  See also Appendix 3—Regional Biotechnology Project Linkage.

2.5  Recent Advances

  In the last 12-18 months the North West Region has achieved the following:

    —  12 new core start-up biotechnology companies gaining more than £25 million in investment and employing over 300 people to-date.

    —  New facilities for six established companies from outside the region (UK, US and Europe) representing investment in excess of £50 million.

    —  Major investment (c£150 million) by established pharma and biotech—AstraZeneca, Powderject (Evans) and Aviron (MedImmune).

    —  Successful bid for NoWGEN one of five UK Genetic Knowledge Parks.

    —  Bionow highlighted as case study for best practice by DTI plus.

    —  £18 million investment in Science Base via Smith Committee to support programmes in Genomics, Post-Genomics (the NW Genomics Consortium) and Molecular Imaging Research.

    —  £19 million infrastructure funding for life science to University of Manchester (£15 million) and UMIST (£4 million).

    —  £10 million Research Council funding for a joint Manchester-Liverpool Tissue Engineering Research programme.

    —  Suceessful bid for one of two National Clinical Genetics Reference Laboratory in Manchester.

  See also Appendix 4—Cluster Profile Update.


  The North West Biotechnology Cluster has developed a noticeable energy and sense of community over the last two to three years. This has been stimulated by the Manchester Biotechnology Incubator project, in particular, as well as the effort and enthusiasm of many companies and individuals in the Region. The cluster has been further developed and more widely recognised as a result of the NWDA's Bionow cluster programme, several publicly funded projects and a number of strategic studies and funding bodies such as the Smith Committee and NW Science and Daresbury Review Committee (both in 2000). The NW Science Council is set to provide further direction and support with regard to the underpinning science and clinical research required for cluster development. Public funding and organisation has been crucial to this activity and it is important that it is maintained at a sufficient level to enable this work to be continued.

Dr Linda Magee

Biotechnology Sector Director & Head of Bionow,

North West Development Agency

5 April 2002


  Annex 1  Cluster Timeline*

  Annex 2  Regional Map of Companies*

  Annex 3  Regional Biotechnology Project Linkage*

  Annex 4  Cluster Profile Update

  See also:

*Not Printed

Annex 4

North West Cluster Mapping Update 2002: Biotechnology Executive Summary[4]

  The North West biotechnology cluster [5] is probably the most dynamic of the UK's life science clusters. The number of companies in the cluster has grown considerably in the past two years, increasing by over 70%. The core biomedical biotechnology companies [6] have increased from 42 to 72 and the total number of companies from 100 to 172.

  There are 20,000 people employed in these companies 15,000 of which are employed in the region's 72 core companies. Although many more who are key contributors to the cluster are employed in the public sector eg Universities, Research Institutes and Hospitals.

  Since August 2000 the average investment into the cluster companies has increased from £0.62M to £1.83M (this data excludes a major investment into a single company).

  The key strength and growth segment of the region's biotechnology sector is biomedical and biopharmaceutical biotechnology with sub-clusters in bio/pharmaceutical manufacturing and a mix of therapeutic and diagnostic technologies amongst the biotechnology companies. 94% have human healthcare as a single or predominant commercial or technical focus.

  The North West is home to seven multinational pharmaceutical companies: AstraZeneca, Aventis Pharma, Bristol-Myers Squibb, Eli Lilly & Co., GlaxoSmithKline, Miza and Aviron (Medimmune). AstraZeneca also has its largest world R&D centre in Cheshire.

  The North West has 17 listed biotechnology/healthcare companies of which 10 have a significant proportion of their operation in the North West. These companies are: Advanced Medial Solutions, Applied Biosystems, ML Laboratories, Drew Scientific, Maelor, Osmetech, Protherics Molecular Design, PowderJect Pharmaceuticals, Provalis, Tepenel Life Sciences and SSL International.

  A particular industrial strength is pharmaceutical and biopharmaceutical manufacturing. Making the NW one of the only UK regions that has strengths in the full pipeline of technologies from drug discovery to manufacturing for the market.

  Annual turnover across the core companies in the region currently totals approximately £2 billion and company turnover has increased by an average of 13% since 2000.

  The Manchester BioIncubator, MerseyBIO and other regional incubation initiatives (classified as outside the "core") have a significant contribution to make with regard to the region's deal flow.

  The epicentre of the North West's biotechnology cluster is the Manchester-Liverpool corridor but the cluster has a significant presence in Cheshire and the south of the region.

  A significant R&D and clinical community, affordable space for company growth, a significant biomanufacturing capability and good international access, all contribute to the region's growth and are the source of competitive advantage.

15 April 2002

1   Professor Mark Ferguson, CBE, Professor John Hickman and Dr Linda Magee. Back

2   Bionow is a brand within the NWDA and supported by public funding with occasional sponsorship for network evenings and conferences etc. Membership is free and open to company or organisations clearly focused on biotechnology eg R&D based biotechnology companies, pharmaceutical companies, professional advisers and investors, incubators and technology transfer organisations, entrepreneurs and key academics. Back

3   These individuals include Professor Mark Ferguson (Renovo & University of Manchester), Mr Peter Raymond (Tepnel), Dr Crawford Brown (Eden Biopharm), Dr Chris Preston (GSK), Professor Julian Crampton (University of Liverpool), (all members of the Bionow Steering Committee) & Dr John Stageman (AZ) (member of NW Science Council) and Dr Paul Drayson (Powderject) (member of the Merseyside Life Sciences Steering Group). Back

4   This summary was prepared by Dr Mike Fisher, Biotechnology Project Manager, Bionow, NWDA, from a confidential report prepared by ANGLE Technology, May 2002 for NWDA. This extract is distributed with kind permission of NWDA. Back

5   The cluster is related specifically to biomedical biotechnology companies and this was the focus of the study. The cluster study also included companies close to the north west border, although they are outside the formal NWDA regional boundary. Back

6   Core biotechnology companies for this study were defined as "companies that use modern biological techniques to develop products or services to serve the needs of human healthcare". Back

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