UK drug discovery needs stronger funding effort, report shows 

Great British Pounds, Investment

Improvements to the ways medicines are discovered are essential for the future health of patients, a new report by Medicines Discovery Catapult (MDC) shows.  

The State of the Discovery Nation (SODN) 2024: ‘Fostering a Dynamic, Sustainable Medicines Discovery Sector’ report states that the industry must work together to de-risk funding in drug discovery and attract more investors. 

The report, released in partnership with the UK BioIndustry Association and the Association of the British Pharmaceutical Industry, looks at how life sciences companies have been impacted by recent economic instability.   

It indicates how economic events such as inflation and geopolitical instability have led to a dramatic drop in therapeutic company investment. Specifically, the analysis shows a reduction in the amount and available sources of financing between 2020 and 2022. It shows that small-to-medium enterprise (SME) funding dropped from £3.04 billion to £1.7 billion between 2021 and 2022, with a reduction in public equity funding being the main factor behind the decrease. This was compounded by the inflationary increase in R&D costs over the period. 

This means that the industry is now witnessing a combination of reduced investment and higher costs, made worse by shortages of skilled staff and laboratory space. More so, the report indicates that companies cannot afford to generate data to prove to investors and pharmaceutical companies that they are “investment ready”. MDC states that without funding, innovative companies with unique skill lets are at risk to be lost.  

The report says that a shift in mindset, combined with practical steps to boost investment, is needed. If not, innovative companies will be at risk and large company pipelines will be starved, whilst the delivery of new medicines will be slowed.  

The SODN report highlights just how important the life sciences sector is to UK productivity, not to mention patient health. In 2021. UK life science companies generated £108.1 billion in turnover, and accounting for 35% of all life sciences start-ups created since 2012.  

Steps needed for the UK to secure a rich medicines pipeline include:   

  • Creating strong partnerships with translational experts, who can take early-stage discoveries through to late-stage clinical development so SMEs can de-risk assets for investment wherever they are in the UK. 
  • Providing high-quality laboratory facilities and incubator spaces for companies at all stages of maturity 
  • Making funds available, visible and accessible to support SMEs. Leverage private/public initiatives to co-develop pipelines of high-quality fit-to-fund companies. 

Professor Chris Molloy, CEO of Medicines Discovery Catapult, said: “If we want to keep the life sciences sector healthy and able to compete on a global stage, it is not enough to ask investors to simply become more comfortable with high-risk investments. We need to de-risk the innovation as much as we can. For early-stage companies, we need to offer more coordinated access to the skills and technologies they need to generate ‘investment-ready’ data sets. For investors, we need to provide them with a holistic picture of the health landscape and the UK medicines discovery pipeline so they have more insights to make funding decisions. In short, our sector deserves a purposeful fit-to-fund programme that will ultimately serve our patients, our pensions and our national productivity.” 

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