The old rivalry between Cambridge and Oxford University is now focused on competition for biotech funding
It was back in the 1990s that Cambridge first became known as Silicon Fen, after the Science Park established by the University’s Trinity College twenty years earlier developed into an increasingly successful cluster of high-tech companies. In the following decade, tech spawned biotech, and Cambridge became the UK’s base for life sciences, attracting investment from companies such as AstraZeneca. Now, however, it is encountering a real challenge from its old rival, Oxford.
According to the Dow Jones VentureSource database, Cambridge-based start-ups raised £102.6 million in venture capital in the first ten months of 2015, while those based in Oxford outpaced them with £110.7 million. Other fundraising efforts have also been going well. In May alone, Oxford-based Adaptimmune, a cancer-drug developer, raised $175 million from Nasdaq investors. Circassia, meanwhile, raised £275 million through a share placement in London, having secured £202 million through its initial public offering the year before. This was followed in July 2015 by Immunocore’s $320 million (£213 million) private fundraising deal, Europe’s biggest biotech funding deal of the year.
As in Cambridge, this is not happening by chance. Eyeing the successes of its rival, Oxford has brought together public and private organisations, helped by dollops of EU and UK government funding, in order to develop its biotech industry. Much of the effort focuses around the University, of course. According to Isis Innovation, university researchers have started 50+ companies since 2005, more than any other UK University and 11 so far in 2015. Existing companies, such as UCB Pharma, are also getting involved through alliances and support networks. Next up will be a ‘Biotech Escalator’ for start-ups, which will offer labs and other facilities all housed in a new 17,000 square-foot research centre opposite the University’s medical school.
The University’s efforts are being backed by those of the City Council, the County Council and local business groupings. Together, through the Oxford Strategic Partnership, they have drawn up an economic strategy for the city that puts biotech – along with other industries such as car manufacturing, tourism and retail – at the centre of the city’s development. According to the OSP’s latest report, there are already around 7,200 biotech jobs in Oxfordshire, most of them in a cluster of 163 companies, of which 49 are in the city itself.
Yet for all the excitement about Oxford’s prospects, it is still Cambridge that is the bigger player in the UK. Its lead, established early on, was cemented by AstraZeneca’s decision to base its global R&D headquarters there, as well as the foundation of important ventures such as Genomics England. And although Oxford is making up lost ground, it remains reluctant to challenge its Fen rival head-on. Instead, the talk centres on a biotech triangle connecting the two university cities through London, home to Imperial College and UCL, thus neatly bringing together four of the world’s top six universities, according to the QS Rankings.
The UK’s biotech 'cluster', though, is even wider spread than that, with places as far apart as Kent, Nottingham and Edinburgh all claiming their own biotech hubs. Together, they allow the UK to claim the position of Europe’s biggest attractor of biotech funding, although it is chicken feed compared to that of the US.
Indeed, the whole of the life science sector in the UK has struggled to expand much beyond AstraZeneca and GlaxoSmithKline, and both of them have fallen down the global rankings as the industry has consolidated. And for all the recent efforts, the country’s research labs remain notorious for their failure to exploit the fruits of their research. The classic example remains that of Humira, the first fully human antibody blockbuster drug, developed by Cambridge Antibody Technology but commercialised by Abbott Laboratories of the US (and now its spin-off AbbVie).
One problem is infrastructure. Although both Oxford and Cambridge are well-connected with London – allowing for that biotech triangle – the age and architecture of both cities imposes some constraints. Housing is expensive and roads often congested, while green belts and other planning rules limit development. The authorities are doing their best to tackle the problems. In early 2014, for example, the Oxford City Deal aimed to soup up the city’s transport links and encourage housing development. But it remains a delicate balance.
The biggest problem is funding, though. Despite Oxford’s success in raising funds in recent years, and the revival of venture capital generally, investors remain chary with their money. The patent box has certainly helped, as have the UK’s low tax rates. Yet investors looking for those advantages are still heading for Ireland instead, ignoring the lures of both Oxford and Cambridge.
For all the recent efforts, the UK's research labs remain notorious for their failure to exploit the fruits of their researchAna Nicholls is chief healthcare analyst, Economist Intelligence Unit