Advanced Research and Invention Agency Bill

Written evidence submitted by the BioIndustry Association (ARIAB03)

 

Advanced Research and Invention Agency Public Bill Committee

 

Introduction

 

1. The BioIndustry Association (BIA) is the trade association for innovative life sciences in the UK. Our goal is to secure the UK's position as a global hub and as the best location for innovative research and commercialisation, enabling our world-leading research base to deliver healthcare solutions that can truly make a difference to people's lives.

2. Our members include:

· Start-ups, biotechnology and innovative life science companies

· Pharmaceutical and technological companies

· Universities, research centres, tech transfer offices, incubators and accelerators

· A wide range of life science service providers: investors, lawyers, IP consultants, and communications agencies

3. The BIA’s members are at the forefront of innovative scientific developments targeting areas of unmet medical need. This innovation leads to better outcomes for patients, to the development of the knowledge-based economy and to economic growth. Many of our members are small, pre-revenue companies operating at the translation interface between academia and commercialisation.

4. The BIA welcomes the UK Government’s publication of the Advanced Research and Invention Agency (ARIA), and the opportunity to share views with the Public Bill Committee considering this legislation in the House of Commons. The following submission contains the BIA’s views on the considerations that should be made when establishing ARIA and broadly how different aspects of it might function, particularly in relation to the wider UK R&D funding landscape for life sciences. Whilst no specific amendments have been suggested by the BIA, we hope the following submission provides useful context for the committee when examining the bill.

The role of ARIA

 

5. The role of ARIA must be unique. It must not be "just another funder". The key aspect that sets US DARPA apart from other R&D funders is its vision, which is driven by extraordinary ambition. While US DARPA projects often have a very specific problem that is quite practical (e.g. prepare for the next pandemic by learning to quickly develop and deliver a vaccine), the agency’s unique remit means that it seeks a solution that goes way beyond the minimum required to resolve the need (e.g. develop 100,000 doses of any vaccine made from DNA within 24 hours in a container in the desert). The scope of this ambition pushes academics and companies alike to find ways to meet the target. These ambitious targets are not developed by DARPA overnight; rather, they are designed with a great deal of thought, so that even projects that fall short of their target are capable of delivering transformative change. For ARIA to truly differentiate itself from existing R&D funders in the UK, it must embrace an equally extraordinary ambition and vision.

6. For ARIA to succeed, it should:

· Clearly identify, articulate, design and address challenges that are under-served by existing public funders, industry, and investors.

· Fund research from any discipline in a technology-agnostic way at any stage of the innovation pipeline.

· Actively manage the overall R&D process throughout its projects whilst providing flexibility and freedom to the individual researcher groups and companies which it funds.

· Work with end-users (customers), industry and downstream investors to ensure the solutions its projects are developing are implemented in practice.

· Operate with a high degree of autonomy from central government and have long-term horizons.

7. The March 2020 Budget stated that the Government would "invest at least £800 million" in a "blue skies" funding agency, which would fund "high risk, high reward science". In the existing UK context, finding breakthrough ideas is not what is holding the UK back from being a global leader in innovation, but the issues lie in the way these ideas are developed, commercialised and taken forward. Furthermore, the US DARPA has not been successful by funding blue skies research. Rather, its success can largely be attributed to addressing the ‘valley of death’ [1] – the gap between early-stage research and late-stage commercial development in which high-risk research projects struggle to secure either government funding or private investment. It is important to note that the US DARPA is not bridging the ‘valley of death’ by only providing funding to these high-risk projects; the agency also has an important role in guiding projects through the R&D process to ensure the new technologies ultimately reach the market and are applied in practice.

 

8. Most R&D funding programmes in the UK – whether academic or business focused – are competition-focused, with clear processes and bureaucracies around them. Established scientific and commercial concepts have particular funding routes which are working reasonably well. To make a difference in the UK’s science and innovation landscape, ARIA should take a difference approach compared to existing funders by instead funding novel and high-risk ideas. As noted in ‘Visions of ARPA’, published by the Policy Exchange, "if more than half of ARPA’s projects succeed fully it will be being too cautious". However, while ARIA’s extraordinary ambition may mean that its projects fail more often compared to other R&D funding agencies, this does not mean that ARIA should overlook failure.

9. Technical failure in reaching milestones that were set in the proposal stage should be accommodated and supported with agile re-planning, contingency funding and flexible consortiums. However, if a project is failing to make innovative leaps in the right direction at the right speed, it must be judged a failure as quickly as possible and dropped. This will allow ARIA to spend more money in the right places. Every 12 months, US DARPA tests the progress of its projects to see how far they get towards the overall objective. If the project fails in a way that is deemed fundamental to the objective, the project is swiftly discontinued. US DARPA project managers are held to equally high standards and if the projects they are managing are not progressing towards the objective, they are dismissed. ARIA must develop a similar attitude to failure, which is a radically different approach to funding compared to what the UKRI and the Government are currently taking and are used to.

10. When the idea for a new agency was announced, the BIA called for this to be modelled in a similar way to then then-newly formed UK Government’s Vaccines Taskforce, and we are pleased to see the Government take this on board when designing ARIA and highlight the "winning formula" of the task force as an aim it wishes to uphold in ARIA. [2] We welcome the specific design of ARIA to enable its work to take place at great speed, with flexibility and minimised bureaucracy, as we have seen how the minimum bureaucracy approach towards funding multiple potential vaccine solutions has paid dividends in the UK. By working in this way on a project of such scale with so much at stake, the Government has begun a culture shift around funding and decision making which will benefit ARIA if it continues in this way.

11. As many commentators have observed, a key to the US DARPA’s success is the established "customer" as the end of the R&D process, the US Department of Defense, which requires a solution to a specific problem. For the UK Government’s Vaccine Taskforce, the customer is the Department for Health and Social Care (DHSC) and Public Health England, again with a specific problem to be solved. While not all ARIA projects may have that established customer at the end of the R&D process, the problem which each project is trying to solve must be clearly defined. ARIA project managers will then be able to fund R&D activities within academic teams, companies or other groups to address that challenge, drawing on the breadth of expertise within the UK science and industry base. As the solution to the problem emerges, it is vital that ARIA’s project managers provide a guiding hand throughout the R&D process and work to engage the Government, companies and/or investors which can either act as the final customer, or bring the project to market. ARIA cannot fulfil these critical roles by focusing on blue skies research alone. However, within each individual group, flexibility and freedom will be essential for the innovation process.

12. The US DARPA is a small organisation within the large US innovation system and has a proportionally small budget. However, the proposed annual budget of £200m for ARIA is a small amount and not sufficient for the agency to fund a novel idea from discovery all the way through to market. Furthermore, the decision to not guarantee long-term funding post 2023-24 makes it difficult for ARIA project managers to plan effectively. Bringing a product to market is expensive, takes time and requires considerable private investment, especially in life sciences. This is another reason why it is vital that ARIA project managers work with the private sector and investors to secure additional investment and/or industry partnerships as the R&D projects progress. A framework for if, how and when the R&D is handed over fully to the private sector for final commercialisation will be crucial and should be thought about carefully during the setup of ARIA. It is essential that the way ARIA funds R&D makes the commercialisation of the products as easy as possible. In addition, a small and relatively short-term ARIA budget will necessarily affect its vision, ambitions, and impact. It is therefore important that the Government is mindful of this and does not expect results that are on par with US DARPA’s achievements or spread the budget too thinly by attempting to address as many challenges as its US counterpart. For ARIA to truly be effective in bringing blue sky ideas to commercialisation, the agency needs financial security for longer than three years to achieve this.

13. The success of ARIA should be measured over a long timeline that stretches 10+ years. As such, the Government should not expect the agency to contribute to its (pre-pandemic) ambition of raising R&D to 2.4% of GDP by 2027. The bureaucratic oversight by government must also be minimal to ensure the agency can develop an extraordinary ambition and fund the high-risk R&D projects necessary to deliver on its core function and promise. The Government should be cognisant of the UK’s heritage, expertise and capabilities within existing institutions and ensure ARIAA, in whatever shape it takes, complements these, integrates seamlessly and avoids past mistakes in the Government’s management of innovation policy. An article last year by the then-Interim Executive Chair of Innovate UK, Ian Campbell, and David Bott, a former director of the Technology Strategy Board (as Innovate UK was previously named), explores this and should be considered by the committee. [3]

ARIA ’s focus

 

14. ARIA should be small, flat, flexible, and centred around highly capable project managers with a high degree of autonomy over the projects they oversee. In addition, ARIA must be subject to little political oversight. We therefore welcome the Business Secretary confirming to the Science and Technology Select Committee recently that the missions and priorities of ARIA will be decided by "the people we hire", and that Government Ministers will not determine the specific projects, as was recommended by the BIA.

15. Following the recommendation by the BIA for the Government to have a role in setting the general themes and/or challenges that ARIA is to address, we are pleased that the Business Secretary confirmed this, saying that the Government will set the "tramlines where the UK has comparative advantage" and what areas it wants to see dynamic innovation in. [4]

16. The BIA also recommended that the Industrial Strategy Grand Challenges (ageing society, clean growth, future of mobility, and AI and data) could provide a suitable and broad framework for the themes ARIA should focus on. It is welcome that the Government has acknowledged the importance of this and pledged that ARIA’s priorities be based on these existing grand challenges. However, it is important that the Grand Challenges are only seen as a broad framework, and not a formal structure which would bind the agency to fund a certain number of projects in each Grand Challenge. This is important to avoid some high-risk, high-growth technologies, which could make significant contributions to more than one Grand Challenge, being overlooked.

17. Biotech R&D is inherently high-risk, and it often takes 10-15 years to develop an idea into a product on the market. As such, ARIA will have important lessons to be learned from the biotech sector, particularly from venture capital investors and biotech entrepreneurs who are experienced in driving high-risk, outsourced projects which are terminated quickly if they are not working. We recommend the Committee calls on venture capitalists in its evidence sessions to see what can be learnt from them, and the BIA would be happy to facilitate this.

April 2021