Life science: from academia, to businesses and clinicians, the sector has never been more at the forefront of society.
COVID-19 has highlighted, some gaps where we need to be better prepared. However, it has also seen some of the best of the industry. We have seen hospitals built in days, the UK’s largest biomedical research facility transform into a testing centre and the creation of mobile, inflatable research laboratories.
Pharmaceutical companies are working together like never before. The COVID-19 Therapeutics Accelerator brings together industry leaders, universities and charities come together to discover and trial new therapies. Dr Jeremy Farrar, Director of Wellcome, said: ‘Science is moving at a phenomenal pace against COVID-19, but to get ahead of this epidemic we need greater investment and to ensure research coordination.’
Over the past 18 months, the UK life science real estate market has been growing in stature. Investors and developers are understanding the unique requirements and the ecosystem for growth companies is improving. The fundamentals of the UK life science market are strong and long-term the pandemic should not change this. The UK has a world class research base, talent and a growing ability to translate research into companies.
Life science companies are long-term investments requiring patient capital and in many cases are well placed to see through dips in the market. In the first few weeks of 2020 several life science venture capital firms have raised over $5bn of new capital to invest.
In the height of the pandemic two biotechs also went public (IPO) both raising more than 25% on their first day of trading. Over the past month we have seen a number of global pharma occupiers’ complete transactions and new laboratory buildings and campuses progress their development. However, as we continue to battle the pandemic it is important to start to look forward at what trends will arise and their impact.
- Increased M&A activity. Life science has always been a comparatively active market for M&A but as market caps decrease it will present an opportunity for cash rich pharma to acquire new assets.
- Updated regulatory pathways to boost innovation and speed to market. Post COVID-19 we may see a shift in how clinical trials are designed, conducted and monitored, an area where the UK is already a global leader.
- Increased public sector investment in facilities and services. The pandemic has highlighted gaps where we need to be better prepared. The government’s, pre-COVID-19, announcement of a big funding boost was welcomed but will only be effective if we have the right facilities. This may also create unique joint-venture opportunities between the public and private sectors.
- Life science real estate developments are long-term propositions. These centres need to be sustainable over the long-term and as such they should be able to manage bumps in the market. Many of the UK’s largest upcoming life science projects have continued development throughout the pandemic.
- Diversification of portfolios towards alternatives. The repercussions from this pandemic will be felt harder in some sectors than others. As investors and developers begin to reassess their portfolios, they will begin the search for alternative, growth sectors, of which life science should be at the top of their list.
Long-term, UK life science is well placed to come through this and will continue to be one of the key growth sectors for the UK economy. When the market does return to normal, we predict more landlords and investors diversifying their portfolio and starting their journey in the life science sector.
