Member Article

North West needs continued investment in life sciences

With a £42m life-sciences investment fund set to be launched this year and pledges from Prime Minister David Cameron and Chancellor George Osborne to make the North West a global centre for science and innovation, much is being promised in this sector.

As an investment director at SPARK Impact, which manages the £30m North West Fund for Biomedical, I can see the positive effect which funding of this nature has. We have invested £24.5m of the North West Fund for Biomedical to date in numerous successful innovations spanning med-tech, health services and anti-infectives to name just a few.

Examples include Stockport-based Oxtox which is developing Drugsensor™ to rapidly detect drugs of abuse in saliva and two companies based at Manchester Science Park - advanced medical imaging company Bioxydyn, which has recently launched its software product Pulmolux and Zilico, which has developed a technology to improve cervical cancer diagnosis.

The £42m is certainly extremely welcome but I do believe that the area needs ten times this amount to support growing firms beyond the early stages.

Hopefully, it will give Manchester and the broader North West the confidence to display grander medium term ambitions. Life science is undeniably capital intensive - a single company may need £5m or more over its life cycle. Indeed, in drug development, £5m might only fund a single trial when several are needed. It follows that the region will eventually need ten times more capital than what is currently on offer.

We should not be afraid to make our case to the investors who can provide it as the North West, and in particular Manchester, has a world-class life science base. It nonetheless suffers from a well-recognised ‘funding gap’ at the £50,000- £300,000 level and our own experience suggests another at the £1-3m mark.

Larger funds, with longer time horizons, are ideally placed to address this gap. By providing both the capital and the patience required by companies along their full life cycle, maximum value will be achieved, delivering excellent returns for their investors, creating high-value, knowledge-economy jobs along the way.

Attracting real investment into the region this year will be key. Manchester has clearly got the private sector waiting to invest and improve infrastructure but we also need to look beyond this and have the capital to support both emerging and current life sciences businesses to allow them to prosper. Venture capital and private equity backing will be an integral part in helping to ensure Manchester is equal to its status of European City for Science.

This was posted in Bdaily's Members' News section by Dr Andy Round, SPARK Impact .