A £10 billion ‘megafund’ to help UK pharma firms develop new drugs will be discussed at a conference held by the mayor of London’s office today.
The conference will be hosted in conjunction with research body MedCity and will bring together pharma, finance and research leaders to discuss options for increasing investment in UK pharma.
The mayor’s office says that UK companies often face financing challenges for late-stage drug development, as investors perceive life sciences to be riskier than other sectors.
“Capital is a key ingredient that grows companies and brings therapies to market, and at the moment we simply don’t have enough of it,” says Eliot Forster, executive chair of MedCity. “If we want to develop another GSK or AstraZeneca, if we want to get a full return on the investment we put into our research base, and if we want better therapies more quickly, this is an issue we have to address.”
Lower risk
The proposed megafund could reach up to £10 billion in the long term and would be created using a mix of debt and equity finance. It would able to invest simultaneously in multiple drugs at different stages of development, which would lower the overall risk of investment by pooling various projects into a single portfolio.
Attendees at the conference will also discuss taking advantage of the InnovFin programme set up by the European Commission and the European Investment Bank, which is expected to provide more than £17 billion of new financing for research and innovation over the next five years.
Other options being considered include tax incentives for investors who hold onto shares for more than 10 years, and capital gains incentives where lower capital gains tax is paid the longer it takes to get a return.
