Regenerative Medicine: S&T Committee Report

Baroness Sharp of Guildford Excerpts

Thursday 13th March 2014 Lords Chamber

[Baroness Sharp of Guildford (LD)]

My Lords, as a member of the committee, I thank the noble Lord, Lord Patel, for his excellent introduction to the debate. I repeat the thanks to the noble Lord, Lord Krebs, who cannot be with us today, who was an excellent chairman, and to Professor Fiona Watt, our specialist adviser.

Working on this report took me back to the 1980s when, in my position in the science policy research unit at the University of Sussex, I was an alien social scientist sitting in as a fly on the wall on an experiment in university/industry collaboration called the Protein Engineering Club, which was an attempt to assist the process of carrying science from the laboratory through to industrialisation and commercialisation. Then, as now with regenerative medicine, there were great hopes about what might be achieved. As we were working with proteins and antibodies, we hoped, for example, that regulation would get easier rather than more difficult because we were working with biological entities rather than chemical entities that were alien to the body.

There was also hope that the rise of the venture capital industry in the United States would rapidly spread to the United Kingdom—there was some indication that it was coming—and that this would lead to a wholesale change in the process of coping with, as they put it, the valley of the shadow of death—the process of financing commercialisation—with a wave of new firms that would be well funded, developed and built up, either contracting to or, as in many cases, being bought up by larger firms.

Looking back on it, the work that was done then has been very much the foundation of the current range of biotechnology medicines that are now coming on to the market, but it was 25 to 30 years ago. It has taken a very long time to get many of these medicines on to the market, and indeed some of them are still working their way on to it. The regulatory process, far from getting easier, has if anything become considerably more difficult and complex. The financing is no easier; venture capital waxes and wanes, largely with the macroeconomy. Big pharma itself has waxed and waned. The sort of work that was being done in the Protein Engineering Club has in many senses provided an underpinning for the technology for the two big British pharmaceutical companies, GlaxoSmithKline and AstraZeneca, in their current success. Nevertheless, there have been many ups and downs in the process.

The lesson that comes through clearly in the report is that there are great hopes for these new medicines but much hype. In paragraph 19, we talk about the possibility of regenerative medicine that may provide treatments for long-term, chronic diseases, such as Parkinson’s, cardiovascular disease and diabetes, but we also say:

“Many submissions to the inquiry offered a ‘health warning’, however, that public expectations must be managed as many of these treatments are relatively far from delivery to the wider public”.

As my noble friend Lord Willis said, regenerative medicine is not a short-term fix.

Our report identified the four main challenges to be overcome. Other noble Lords have spoken at some length about some of the issues. One is the science itself. As the noble Earl, Lord Selborne, said, it is moving under our feet. It is a highly innovative area where new ideas are bubbling up and being tested all the time. In no sense is the science stabilised. It is an extremely stimulating environment, but because things do not stand still, it is always a matter of the science moving forward and innovation having to adapt to the new developments that are taking place. The regulatory framework is increasingly complex—perhaps unnecessarily complex, as my noble friend Lord Willis suggested. We were hoping that an expert group could be set up which would manage to find some way to simplify it. Scale up—the shift from the laboratory to larger scale production—is also a considerable problem. There are always completely unforeseen difficulties in such processes. Cells do not behave on a larger scale as they do in a laboratory dish. Finally, there is the business model. It is very important that there should be patient capital. One is looking at 25 years, a whole generation, for such medicines to come on to the market. There has to be capital that is prepared to put its money down and wait for results.

On the whole it seems to me, as it does to others, that the processes the Government have put in place have been appropriate. As my noble friend Lord Willis said, the Government have played their cards well. They have designated regenerative medicine as one of the eight great technologies and have concentrated on the life sciences with the emphasis on investment in the research base, where we have a considerable comparative advantage. In November 2011, they produced their strategy for the life sciences, reinforcing what they call the “life sciences ecosystem”, and, in particular, bringing together R&D in the National Health Service and academic research supported by the research councils and seeking to exploit what other countries see as the UK’s unique advantage in having a unified health service as a platform for assessing the effectiveness of treatments.

Building on this, and into this, indeed, is the Technology Strategy Board. Its April 2012 report A Strategy for UK Regenerative Medicine dealt with the translation from research into commercialisation and concentrated in particular on the regulatory framework, manufacturing and industrial collaboration. Alongside the TSB initiatives is the Cell Therapy Catapult, which was originally a technology and innovation centre to help develop an emerging industry to be a precursor to what could be a £10 billion industry. The catapult is working on a five-year plan pulling academic and industry plans together and ensuring a voice for this new technology within government here and within Europe.

All of this is very positive, except when we come to what is happening in California. The California Institute for Regenerative Medicine—CIRM—has been raising $3 billion in 30-year bonds. The National Institutes of Health is spending $1.3 billion on regenerative medicine. In the UK, TSB is spending £16.25 million over the next three years; approximately £5.5 million a year. Catapult has core funding of £70 million over five years—£14 million a year core funding—and is hoping that the third sector will add another £10 million, and industry another £10 million, making somewhere in the region of £35 million a year. However, much of that is still a matter of hope, although both sectors are beginning to put more money into this area. Putting it all together, we are looking at something in the region of £70 million to £100 million a year for this sector, compared with the $3 billion that the Californians have raised through 30-year bonds.

Our recommendation 13 to the Government was that the ESRC and the Technology Strategy Board should do an evaluation of innovative funding models. The Government must, we said, put their money where their mouth is: we cannot expect the goose to lay golden eggs unless we feed it. The UK public spending and accounting framework is, to my mind, quite unduly risk-averse and focused on the short term in many senses. The centralisation of all capital funding via the Treasury cuts out intermediate authorities as raisers of capital. This compares with the United States, where states such as California, come in and can raise money for innovation. In Germany, the Länder, again, can go to the capital market and raise money for innovation and then work in conjunction with the Landesbank. There is no encouragement here by the Government of highlyconcentrated funding mechanisms at a regional level. The response of the Government to this recommendation was non-committal at best. They said:

“The TSB and Research Councils will respond to the recommendation to evaluate innovative funding models for late stage clinical development”.

Indeed, the TSB and the research councils welcomed the idea. The Government’s response continued:

“The Government is confident that regenerative medicine has enormous potential which is why we invest in the research base through the Research Councils and support commercialisation through the TSB. We cannot commit to adopting policy recommendations on regenerative medicine that might emerge from an Economic and Social Research Council … and TSB study … although we will consider any recommendations of such a study”.

As I say, that is non-committal at best. Unless we are prepared to think big in the way that California does, we shall end up—as we did in some senses with protein engineering—with positive but relatively little gains from this new technology while others grab the really big gains.