Biomedical Catalyst programme provides model for Government funding of UK science and technology innovations, says expert

In a new report, the House of Commons' Science and Technology Committee criticised Government efforts to support UK businesses in their efforts to commercialise "technological innovation" and said that it is not deriving the "full economic benefits" from the UK's scientific research capabilities.

The Committee said that the Government did not have a "coherent innovation policy". It said that businesses' confidence to invest in innovation would be aided if the Government made a "definite commitment" to help businesses with initiatives in areas such as "procurement, R&D focus or fiscal policies" to help those companies overcome the so-called 'valley of death'. The term refers to the difficulties some companies have in obtaining enough finance to develop their research and development programmes to a stage where they can attract meaningful amounts of venture capital interest and/or license those programmes to a third party.

However, the Committee described the Government's support for businesses in the life sciences sector as "excellent". It said that "there is real innovation taking place in how that sector might be supported".

One of the funding initiatives the Government has developed to help life sciences businesses to fund early stage research and development and overcome the 'valley of death' is the Biomedical Catalyst. The Biomedical Catalyst was established by the Government late in 2011 as an initiative to help medical scientists win finance to develop their research in a bid to address the 'valley of death' funding gap.

On Monday the Government announced that 51 businesses would receive a share of £47.2 million in the "second wave" of funding announced as part of the Biomedical Catalyst programme.

Life sciences law specialist Allistair Booth of Pinsent Masons, the law firm behind Out-Law.com, said the Biomedical Catalyst programme had made a significant impact in the life sciences sector. 

"The Parliamentary Select Committee's highlighting of the need to bridge the so called 'valley of death' is to be welcomed," Booth said. "The Biomedical Catalyst grant programme has delivered tangible results in the life sciences sector and is a good template for the Government to use to assist UK businesses in their efforts to translate their technological advances into products on the market or marketable assets."

Andrew Miller MP who chairs the Science and Technology Committee said that British entrepreneurs were being "badly let down by a lack of access to financial support". Too often they are having to "sell out to private equity investors or larger foreign companies to get ideas off the ground", he said.

"Equity investments have a place, but too many companies are forced into over-reliance on this route because other types of funding are unavailable," Miller said in a statement. "Pension funds used to be a source of patient capital for firms that needed time to bridge the so-called ‘valley of death’ and get new technologies to market, but regulation has changed the way they operate and restricted this sort of finance."

"The Government needs to look at how it can provide the infrastructure to support innovation by ensuring small technology firms have access to finance, facilities and advice. The new business development bank could help in this area and the Government should seek to develop the market in technology equities and ensure that the market has access to information that may change the perception of the relative risk of these equities," he added.

The Government claimed that it has "set out a clear approach" to exploit the UK's "science and research base".

"We are helping innovative SMEs access finance by investing in Enterprise Capital Funds and the UK Innovation Investment Fund, on top of introducing a substantial R&D tax credit scheme," a spokesperson for the Department for Business, Innovation and Skills (BIS) said. "We are setting up a Business Bank to support the development of diverse finance markets for businesses. Despite enormous economic pressure we have protected the £4.6 billion annual budget for science and research."

"Over £1.2 billion is being invested over three years through the Technology Strategy Board to support business-led innovation, of which £250 million is being spent establishing a network of Catapult Centres to bring new technologies to market. This week we announced around £50 million of projects supported by the Biomedical Catalyst, a £180 million programme to bridge the ‘valley of death’ in biomedical sciences," the spokesperson added.