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We’ve had plans, strategies and roadmaps, but now the U.K. life sciences sector has a Vision.

This new document, released by the government last week, replaces the hugely successful industrial strategy for life sciences. This had a major bearing on the sector’s recent growth and direction, creating solid foundations to build.

The new strategy – because that’s what it ultimately is – has been in the pipeline for some time. Delayed by Covid and then further due to ministerial changes within BEIS, the government department responsible for its delivery, it is now finally here.

A broad consultation exercise saw a variety of voices from across the sector feed into its development and, on the whole, it covers much of the ground the industry wanted it to.

If there was one flaw with the Vision’s predecessor it was being too light on detail about how the life sciences business environment needed to flourish too.

As regular readers will know, a recurring theme in the analysis of the industry’s fortunes in the U.K. is that great ideas are rarely the problem; translating them into scale-ups and midsize businesses is more of a challenge.

Thankfully, a whole quarter of the Vision is devoted to creating ‘an outstanding environment for life sciences businesses to start, grow and invest’ and is broken down into five key areas.

First among these is access to capital, which is perhaps one the most significant roadblocks to growth that I witness in the U.K. today.

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What the Vision does well is diagnose the problems. It rightly highlights that many promising new life science companies struggle to scale in the U.K. and so turn to the U.S. for investment.

Further, it highlights the relatively poor growth in the quantum of VC capital focussed on life sciences raised in the U.K. compared to the States – 61% and 201% since 2016 respectively.

It also carries the eyebrow-raising stat that going public on the Nasdaq will on average net businesses a valuation 20-30% greater than on London’s public markets.

But it is in its solutions to these that the Vision needs to provide some more clarity.

The creation of a Life Science Scale-Up Taskforce sounds great although it must look at access to finance from both sides of the fence: yes, the availability of ready capital but also the investability of life science businesses.

This is a major area of focus within our own innovation districts and a topic I’ve touched on before. A great idea and a great business are two very different things.

As for helping attract more private capital, the Vision has already ticked off one of its goals with the launch of the GBP200m Life Sciences Investment Programme (LSIP).

Operated by British Patient Capital, which has already invested GBP150m into the sector since 2018, the programme will aim to seed several new funds.

Each fund will have a GBP250m minimum threshold – with GBP50-100m from BPC to be joined by capital from private fund managers targeting the sector. Among them will be the U.A.E.’s Mubadala Investment Company as part of its U.A.E. U.K. Sovereign Investment Partnership.

In principle, this all sounds great. The programme should bring fresh blood into the funding ecosystem, while its stated aim of supporting later stage growth pinpoints the moment in the life sciences business cycle where poor access to capital is at its most acute.

But to use the age old cliche, the devil is in the detail. Late stage investment could feasibly see one or two firms take up all of a GBP250m fund. If the end result is 100 companies taking on GBP2.5m each then I’d question its efficacy.

Another of the Vision’s other goals – the ‘development of a world-leading U.K. Life Sciences VC ecosystem’ is also on the money. Its core solution is to import talent from U.S. hotspots like Boston and San Francisco to ‘support and upskill’ U.K. investors. This is both novel and potentially very interesting.

But is it just a skills issue in the U.K. VC marketplace? I’d argue that it has bigger cultural barriers to overcome, even if some bright American minds can help fill gaps missing from local experience.

The U.K. actually has a large and thriving private equity and venture capital sectors, home to more transactions than anywhere else in Europe.

What it lacks are the bigger risk appetites of their American counterparts where writing huge cheques to businesses that have yet to celebrate their first birthday is commonplace.

There is also a culture of ‘fail fast and break things’ in the U.S. that embraces the need to learn from failure. This is pivotal to scientific development too but at odds with the British fixation of investing in firms with already proven returns from which you’ll start planning your exit in 36 months.

In delivering on its Vision, the government needs to think more deeply about how it can affect change in the U.K.’s VC and private equity industries, as it’s unlikely that a few fresh faced American VC specialists will be able to undo years of learned behaviour.

These concerns aside, the new Vision looks to be a good build on the successful industrial strategy. There are also promising signs that the environment for private capital in the U.K. is already improving.

The Bioindustry Association (BIA) released data last week showing that U.K. life sciences businesses raised GBP2.39bn in private capital during the first half of 2021 – this follows a total of GBP2.81bn in all of 2020, itself a record-breaking year. And while the U.S. VC market might have grown by 200%, 61% is not too shabby…

The Vision has its sights set on the right targets. With a little more clarity, we can start to see how we might reach them.

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