DR PHILIP WRIGHT, DR ALEXANDER DUNCAN AND DR GILL SAMUELS

TUESDAY 19 NOVEMBER 2002

  511. Good morning, lady and gentlemen. Perhaps, Dr Wright, you could introduce your colleagues and then we will get started.
  (Dr Wright) Thank you, Chairman. First of all, I am joined on my left by Dr Gillian Samuels who is Director of Science Policy at Pfizer; and also by Dr Alex Duncan who is Executive Vice President of Drug Discovery at Cambridge Antibody Technology. I, myself, am Director of Science and Technology at the ABPI.

  512. Perhaps you could just start off by telling us a wee bit about the ABPI membership, who you represent and what your involvement in biotech is as a pharmaceutical industry.
  (Dr Wright) Certainly. Membership of ABPI encompasses a very broad range of companies from large multinationals to what I would call growing biopharmaceutical companies. We also have a variety of categories of membership. They cover what we would consider the more regular totally integrated pharmaceutical companies and they go from some of the UK based biopharmaceutical companies up to the large multi-nationals. We have membership drawn from companies which are based in the UK, of course, the US and Japan. We also have two other categories of membership. We have a research affiliates group which is principally the contract research organisations who provide services to the industry, and also we have a general affiliates membership who provide other types of services (consultants, legal advice and other types of services) to the pharmaceutical sector.

  513. How successful are you in recruiting membership in its varying forms from the small biotech companies? One imagines that your old pharma members would be in there anyway, but in picking up the small companies and giving them the benefit of trade association representation, how successful are you in doing that?
  (Dr Wright) I think it is interesting because if you look at our membership list—which is available, of course, from our website—what we tend to find is that companies become interested in the ABPI when they start growing from being a fledgling company and start having issues and considering how they get compounds and products through to the market place; when they start hitting upon the key issues that actually affect all companies whatever size (which are the regulatory environment, access to skills and knowledge, and also common concerns around animal extremists). When they start hitting those sorts of issues, they tend to be fairly interested in the role of the ABPI. The other point you mentioned earlier was what the role of the pharmaceutical industry was in terms of biotechnology. I must admit, I always seem to have a problem with the word biotechnology in terms of defining it; I am always slightly uncomfortable by it. If you are talking about a biopharmaceutical industry or life sciences and new emerging technologies, it is true to say that probably the biggest funder of what you are considering biotechnology and the life sciences is actually the large multi-national companies. Gill, I do not know if you would like to add anything on that?
  (Dr Samuels) Yes, just to reinforce the point that Philip is making that although often the industry is split in people's minds between the small biotech and the big pharmaceutical, we use biotechnology as much as anybody else in our discovery and development programmes and we have a large number of partnerships with colleagues in biotech companies. We are heavily dependent on biotech. It is an enabling technology for us.

  514. Your position as Director of Science and Technology, is that an admin job or is it a research job?
  (Dr Wright) My principle role is in terms of external affairs working and liaising, for example, with regulators both within the UK and at the European level. We work through, for example, our European federation. My role is very much to assist in creating the climate where companies can carry out research and actually bring new medicines through to patients. That is what I see my principle role as being. That does not mean to say that we do not actually, as well, assist companies either trying to bring together consortia, linking people and facilitating maybe new research areas.

  Chairman: I think at this point I would like to ask my colleague Jonathan Djanogly to come in because he has a constituency specific area that he is concerned with.

  515. There are a number of UK Government initiatives at the moment—Genome Valley, Biotech Clusters, Working Groups, Pharmaceutical Industry Competitiveness Task Force, R&D Tax Credits—to what extent do you find that these actually make a difference in the UK to the R&D climate?
  (Dr Wright) If I may start on that and maybe I will ask Gill to finish off. My first point is, I think, one of the most successful ones has been the Pharmaceutical Industry Competitiveness Task Force. The success of that has been the partnership approach taken between ourselves and member companies and government, and also the follow-up that has happened since. It was not just about coming up with some proposals and recommendations, it was actually the follow up work monitoring the impact. I think that is key to any type of initiative that is brought about.
  (Dr Samuels) I would just reinforce what Philip has said about the Pharmaceutical Industry Competitiveness Task Force and cite, in particular, the excellent work that has been done around regulation and some of the anti-terrorism measures which have helped us significantly in terms of the use of animals in medical research, which is an on-going problem for us in the UK and—speaking from a foreign national pharmaceutical company which has a huge investment here in the UK with about five and a half thousand people and spending £10 million a week on R&D—certainly if the climate changes in terms of the use of animals in medical research and that becomes significantly more difficult here in the UK, it will bear on our ability to invest more here in the UK.

  516. What more would you like to see done to deal with the problem?
  (Dr Wright) I think one of the interesting things is that the US recently brought out a law—it was signed into legislation in July—which was actually brought in under the anti-terrorist act, but it was quite clear and precisely focussed on activities against legitimate businesses that use animals, and it made quite clear penalties associated with the level of economic damage caused. I think there has been a lot of effort over the last couple of years in attacking and combatting animal extremism, but we still have a long way to go.

  517. What impact do you think that animal extremism is having on the industry at the moment?
  (Dr Wright) It is certainly, I think, a disincentive for attracting overseas investment in the UK.
  (Dr Samuels) If I might add to what Philip has said, I think it is also a disincentive as far as people who might think of a career in R&D in the UK, and I do not think that applies just to the industry; I think it applies to our colleagues in academia as well. Of course that is a serious problem for us because we depend very heavily on and invest in the academic science base here in the UK, not just from the point of view of basic R&D but from the point of view of the training of scientists who subsequently come into the industry. If animal extremism prevents our colleagues in academia from doing R&D using animals in medical research, then we cannot find the graduates with the appropriate qualifications and experience that we need to come into industry.
  (Dr Duncan) There are two comments I would like to add, first of all to reiterate what my colleagues have already said and certainly in terms of in vivo pharmacology skills they are already very hard to acquire. The other part of your question which was on R&D tax credits, I think for a small company they have been quite beneficial. There is a European definition which effectively limits being able to sell that sort of tax incentive back to the government in return for cash. For a company which is a few years away from profitability that is quite an asset to have. It does stop when you get to about 250 people and last year we actually went through the 250 barrier and we actually had a debate within the company about whether we should restrict the growth of the company so that we could claim the tax credit, or continue to recruit. That was actually a very difficult decision to make. In the end we actually did restrict our recruitment. That does not send a very good message to me personally, and I do not know what can be done about that, since it is a European definition, but I would urge the Committee to think about those incentives. I think what this is all about is sustainability of biotech and it is important that we get a critical mass of UK companies that are profitable companies. It is unlikely, in my view, that those are going to be under the 250 people in terms of head count. I would urge you to think about what can be done. That is certainly a very good incentive for the smaller companies.

  518. Are you actually saying from that that possibly the Committee could be looking at slightly the wrong thing insofar as we have been concentrating on biotech startups? Are you saying that actually the growth in biotech is going to come from larger companies and that is what we should be looking at?
  (Dr Duncan) I think the biotech industry in the UK is 10 to 15 years old now and there are a number of good companies that are out there that are moving towards profitability and I think it is important in terms of the sustainability of the industry that we look at how we push those companies into profitability. I certainly think there are other things we need to look at in terms of the smaller companies, there are a number of issues particularly around financing for them, but in terms of UK competitiveness we need to be looking at the American model, I think, not looking so much at the German model where there are a number of younger companies, but looking at a more mature industry which can be seen overseas in the US. And how do we get a critical mass of companies that are actually profitable ones, because those are the ones which will drive sustainability and competitiveness in the futures.
  (Dr Wright) I think that these biotech startups—as they go on and become larger—they come to a point when they are starting to get a product through development and maybe into the market, and there is a variety of routes to do that. Whether that's through contracting out or whether they do it in-house, if they are going to invest internally then what the UK should be trying to do is to remain competitive at that point as well as to retain the current tranche of growing biotech companies here. The point is that we compete on a global basis. These companies do not have their market solely in the UK; the major market is the US. There are significant benefits and initiatives around the world to attract investment in a variety of different countries (Singapore is particularly worth noting at this point) and they will try and attract the growing ones because they know that a number of those will become the future bigger companies of tomorrow.
  (Dr Samuels) I might add that it is particularly important that projects which are started in the small biotech companies get to a point where they are providing enough data to attract partnerships from some of the larger companies, such as my own, where we can apply some of our expertise in clinical development to ensure that that science gets brought through to the market place.
  (Dr Duncan) Just one last point, I think we, in the United Kingdom, have been very good at starting things. What we need to be doing is being good at finishing them off.

  519. You have already touched on a few areas that my question covers, but is there one thing which is the biggest hindrance to the growth of smaller companies, or is it a combination of the sort of things you have already been mentioning?
  (Dr Duncan) What we need to do is to provide the right environment, and I think that is a combination of a lot of different things, I do not think there is one single thing. We need to provide an environment for growth which has got to encompass infrastructure, planning, all those public sector sort of things, which actually are quite easy to cock-up as well. It is important that we get that right. We need to make sure that there is good access to financial capital and we need to continue to make sure that there is good access to human capital as well. There are lots of different environmental things.