LONDON (Reuters) -
Banks, investors and big drug companies should consider creating a 10-billion-pound ($15.7 billion) "megafund" to help biotech firms in London and across Britain compete with U.S. rivals, London mayor Boris Johnson said on Thursday.
Britain is a leader in academic scientific work and also home to two of the world's top drugmakers - GlaxoSmithKline and AstraZeneca - yet emerging life science companies often find it difficult to secure funding.
The suggested new pool of debt and equity finance is designed to help plug that gap and is one of a number of ideas being floated at a conference in London bringing together leading figures in industry, finance and research.
The meeting includes representatives from Eli Lilly, Pfizer, Imperial Innovations, Silicon Valley Bank , the European Investment Bank and JP Morgan.
"We hope to harness our role as a global financial center that will bring more life-saving drugs to market and deliver a huge boost to the economy," Johnson said.
The suggested megafund would be able to invest in multiple drugs at different stages of development, with investors receiving a percentage of the royalties from successful products or licensing revenues that result.
The proposed creation of the fund follows the launch of MedCity last year to promote life sciences research, development, entrepreneurship and commercialisation in the UK. MedCity executive Eliot Forster suggested that the UK was failing to capitalise on its world-class research base because of a lack of adequate investment in the pharmaceutical and biotech sectors. "If you compare the UK to other leading life sciences hubs, we are extremely competitive – we have huge innovation, creativity and entrepreneurial drive, and we are increasingly agile in translating exciting research into spin-out companies," Forster stated.
The executive continued "if we want to develop another [GlaxoSmithKline] 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."