How is the Brexit referendum affecting the UK’s biotech and life sciences sectors?
By: Tara Chloe Dusanj
UK voters will be heading to the polls on Thursday to make the big decision regarding the EU referendum. The polls have remained fairly even which has created uncertainty for British life science sector.
The road to the referendum is fairly short. Official campaigning to ‘stay’ or ‘leave’ the EU began on February 5, with polls opening Thursday, when the British public will make the decision. The decision concerns whether the UK should stay a part of the EU, restrict its role or leave completely.
Europe has always been complicated, but new issues of immigration and taxes led the government to offer a referendum as part of their previous campaign for election. Some people believe that the Union has gone too far. The opposing right and left sides of British politics are accusing the other of scare-mongering and misinformation.
The right side is arguing that European law is eroding British sovereignty. This has increased demands on services as a result of the increased immigration from the EU.
The left side is arguing that the UK has a special place in the EU. They think that integration is positive for the economy. There is much contention, but a lot of the backlash is regarding the lack of facts about what the post-Brexit landscape would look like. For the electorates, the main issues are macroeconomics and immigration.
There is no clear understanding of what the economy and level of immigration will look like if the UK stays or goes.
In regards to life science, the pharma, biotech and healthcare industries won’t be top priority for Thursday’s voters. The UK’s state-run National Health Service (NHS) is linked to these industries. Pharma, biotech, medicine and tech are key markets and growth industries in the UK.
There has been recent question and debate of what will happen to theses entities, and their governing bodies.
Back in February, when political campaigning commenced, the BIA spoke with FireceBiotech. CEO Steve Bates says that he has plans in place for however the vote goes. In his own words: “if we remain in the EU and take on reforms as a whole, as well as slowing down the U.K’s rate of integration, we’ve got to know how the sector will work within that.”
“[we] will see the prime minister of the U.K. become the president of the EU next year…and there are some things we’d like to put on the agenda for life sciences during that period.”
This would be the case if the U.K. votes ‘out.’ Besides that, future implications are hard to predict. Bates says that they are worried about how the European medicines regulatory structure will operate if it is not a part of the EU. They wonder what the future holds for the unified patent initiative (run on European basis) and the future flow of investments. Bates claims they don’t really know what they are facing, which makes it hard to execute detailed planning.
This week, UK-based antifungal biotech F2G Ltd gained an impressive $60 million in a VC raise, with much of the pot coming from Novo Nordisk (NYSE:NVO), Novartis (NYSE:NVS), and other investment firms.
The CEO of F2G, Ian Nicholson, spoke with FierceBiotech, stating, “F2G has benefitted from harmonized regulatory incentives in the EU…we have been the beneficiary of EU FP7 funding and approximately 25% of our highly skilled staff are from other EU countries. “We rely on current freedom of movement for these individuals.”
Bates and Nicholson are both concerned about medicines regulation. The European Medicines Agency (EMA) is based in London, and is in charge of the central marketing of medicines in both the European Union and the European Economic Area (EEA).
The MHRA is the UK’s primary drug regulator, and over the years, they have taken on more authority. They shoulder approximately a third of the EMA’s regulatory work. With so many things at stake, it is uncertain what will happen on Thursday. Bates assures that much about the UK life sciences sector will remain intact.
He feels the sector will still be manageable and “excellent.” However he expects uncertainties in specific areas that are extremely complicated. Bates claims that there will be a moment for the BIA, and other life science affiliations to meet with MPs and regulators in hopes to formulate the best possible deal for the sector.
For now, the UK biotech and investment community will have to hold their breath and prepare for Thursday’s vote.
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Securities Disclosure: I, Tara Chloe Dusanj, hold no direct investment interest in any company mentioned in this article.