Written evidence submitted by The Institute of Cancer Research (BUF61)

The Institute of Cancer Research (ICR) is one of the world’s most influential cancer research organisations. We are a research institute, a postgraduate college of the University of London and a registered charity. The ICR collaborates extensively with businesses to commercialise its research for patient benefit. We welcome the opportunity to feed into this inquiry, and share our experiences. 

Summary

• Scientific research is a key driver of UK innovation. The gradual decline in the UK’s science spending risks slowing scientific progress and damaging the UK’s ambition to be internationally competitive in scientific and technological innovation. Funding streams from the private, public and charity sectors are interconnected and reductions in public funding can’t necessarily be compensated through other routes.

• There is a major funding gap that prevents medical research discoveries from being optimally translated into new products and also prevents these products being tested in clinical trials – the so-called ‘valley of death’. Academic organisations can help bridge this gap, by sharing risk in early-stage drug discovery and development with industry, but Government support is also required to fund projects through ‘proof of concept’ to a stage when businesses are willing to invest.

• The UK, through organisations like the ICR, is internationally competitive at commercialising its research through business-university collaboration. The ICR per capita is the most successful higher education organization in the UK at commercialising its research, and plays an important role in shouldering the risk in early-stage drug discovery and development, to bridge the ‘valley of death’.

• The Higher Education Innovation Fund is essential to support business-university collaboration and organisations such as the ICR have used it successfully to interact with industry. We highly recommend that this funding stream is increased in the future.  The funding needs to be guaranteed for a number of years so that cohorts of highly skilled professionals can be developed and retained. Building links with industry is about building relationships and this requires time and continuity.

• The ICR works with and supports small and medium enterprises (SMEs) where appropriate but we must partner with companies most suited to the work that we do. Taking a drug through the final phases of clinical trials will usually be done by a multi-national pharmaceutical company, and we would not prioritise a local or small business over one that has the capacity to do this, as the economic and patient benefit may not be realised by partnering such technologies with an SME.

• There are a plethora of schemes in place to support business-university collaboration, and the landscape is prohibitively complicated, and needs to be evaluated and simplified. There is a lack of stability in this area and continuity is also essential to allow both HEIs and industry to build up knowledge and experience of the schemes.

• The weight of Impact in the REF should not be increased until we have had time to analyse the effect of its introduction. Translational research must not be supported at the expense of the blue skies research, from which paradigm shifts and whole new areas of economic activity will arise. Both are essential.

What are the key strengths and weaknesses of the UK’s innovation system in relation to business-university collaboration? 

The ICR feels that an accurate picture of the international landscape is described in the recent BIS analysis paper, Insights from international benchmarking of the UK science and innovation systems[1]. The report describes the UK’s world class strength in research, higher education and business environment, but weaknesses in the UK’s talent base and investment in research and development (R&D).

Here we highlight some of the strengths and weaknesses which we have experienced in the fields in which we commercialise our research.

Research and research funding

A report prepared by Elsevier for the UK’s Department for Business, Innovation and Skills (BIS), International Comparative Performance of the UK Research Base – 2013[2], describes the UK as punching above its weight in research. The UK represents just 0.9% of global population, but accounts for 3.2% of R&D expenditure, 11.6% of citations and 15.9% of the world's most highly cited articles.

The UK has many institutions of international standing and is world leading in many research fields. The life sciences are a particular success story.

For example, the ICR is the world’s most successful academic organisation at discovering new cancer drugs. We have discovered 17 preclinical drug development candidates since 2005, either alone or in collaboration with commercial partners, and seven of our preclinical drug development candidates have progressed into clinical trials.

In order to maintain the UK’s excellent science base, it is important to consider funding for research in the UK. The UK draws strengths from its mixed funding ecosystem for biomedical research, with support from Government, charities and industry. However, the funding streams from charity, government and industry are complementary and reductions in one cannot simply be compensated for by the others. Government money is vital for encouraging investment from the charity and private sectors and some funding streams are essential in order to preserve the flow of money from other sources – for example HEFCE’s Charity Research Support Fund and Higher Education Innovation Fund.

Through the HEFCE Charity Research Support Fund, public funding is provided pro rata to charity research grants to cover some of the overhead costs, in order to address some of the shortfall between the full costs of research and the direct research costs that charities will only pay. This is a vital funding stream for the ICR as 75% of ICR’s research grant income comes from charities. The Charity Research Support Fund has not kept pace with the growth in charitable grant funding and this funding stream is already being eroded. In the 2007-8 academic year the CRSF provided 33.6p of additional funding per £1 of charity research funding. By the 2013-14 academic year this figure has gone down to 27.3 pence per pound, pound and will fall further to 26.3 pence per pound in 2014-15. With the value of the Charity Research Support Fund decreasing, organisations like the ICR will make an increasing loss on research projects we run with charity funding.  If this continues, our ability to improve patient outcomes through research will be compromised.

The Higher Education Innovation Fund allows the ICR to bring private money in to support our work by facilitating us to form partnerships with companies and commercialise our research.

With such an interconnected funding ecosystem we need to look at the funding landscape for UK science as a whole.  When many of our competitor countries are increasing their research spend, the UK is going in the opposite direction.  A freeze in the science budget at £4.6 billion is a real-terms cut once the depreciating effect of inflation is taken into account.  A long term funding strategy for science is essential, particularly when the gap is widening between UK investment in R&D and that of our competitor countries. We were particularly concerned to note that R&D investment in the UK is less than two thirds of that in the US as a % of GDP.

Capital funding is of particular concern. At the ICR, for instance, public sector capital funding has fallen significantly from £17.3 million for the three-year period 2008-2011 to an allocation of £5.9 million for the four-year period 2011-2015. We have so far been able to counterbalance these falls, by growing our voluntary and royalty income and obtaining new funding through an investment trust. However, the ICR does not have enough income to subsidise both the decrease in funding for capital investment, and to meet the full economic costs of research due to erosion of the Charity Research Support Fund.

This decline in the UK’s science spending risks damaging the UK’s ambition to be internationally competitive in scientific and technological innovation.

Commercialising research

The UK is successful by international standards at commercialising its research, but a major gap remains between our scientific understanding of cancers and the development of new treatments. This gap is particularly apparent with diseases such as cancer where advances in gene sequencing have driven huge advances in our understanding of the genetic causes of cancers, providing exciting prospects for new treatments.

This so-called ‘valley of death’ exists because businesses are becoming more risk averse and are unwilling to fund early-stage proof of concept, validation studies and early phase clinical trials where there is a high risk that they will not see a return in their investment.

The Wellcome Trust’s Strategic Awards are an excellent example of a vital funding scheme helping to fill this gap, and we welcome Government initiatives such as the Biomedical Catalyst fund to also help address these important issues. In order to bridge this funding gap, there is a real need for effective risk-sharing initiatives which are likely to involve partnerships between businesses, universities, Government and charities.

A weakness in business-university collaboration in the UK is a lack of coherence around the schemes to support this activity. The sector lacks clarity, with high turnover and multiple schemes in the current system - such as the Catapult Centres, Catalyst funding, Knowledge Transfer Networks, University Enterprise zones, Innovation Vouchers, Launchpads, and at least 17 different funding schemes addressing different aspects of the business R&D process. With the landscape constantly changing, there is a lack of stability and it is difficult for both HEIs and industry to gain and keep knowledge of how all of these funding schemes work.

Whilst some of these schemes have been highly successful in encouraging business-university collaboration, schemes end and new schemes are initiated before it is possible to properly measure whether they have had an effect. There is a need to review and evaluate existing schemes and simplify the landscape before setting up new ones.  Mostly what the UK needs is stability.

In the US there are two main schemes in place to support Small and Medium Enterprises (SMEs) in innovation, research and development - the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) schemes - which have been around for many years. SMEs have experience of accessing them.  We feel that this sort of simplicity and continuity is needed to support UK business-university collaboration.

Recommendations:

• Government should play a stronger role in funding projects across the valley of death and invest in early stage research and risk sharing initiatives

• The current support for business-university collaboration is prohibitively complicated, this needs to be evaluated and simplified.

• Strategies to support business-university collaboration need to be long term and consistent.

Regulatory framework

The regulatory framework for biomedical developments is overly complex and rigid, and needs to be simplified and much more proportional.  The ICR is supportive of both the early access scheme and adaptive licensing, as long as there is suitable follow up for patients, and data is collected and fed back to the companies and regulatory bodies.

In our own drug discovery work at the ICR, getting promising innovation medicine (PIM) designation through the early access to medicines scheme may help us to attract commercial partners, by increasing the speed at which products come to market, and therefore increasing the likely market share for the companies who go on to develop the drugs. 

How competitive is business-university collaboration in the UK against relevant international comparators?

The UK is widely regarded as successful at commercialising its intellectual property, and ranks top for invention disclosures per unit of R&D expenditure, third in licence revenue per unit of R&D expenditure, second for start-ups and spin-offs per unit of R&D expenditure when compared with other research-intensive countries, fast-growing nations and other international benchmarks[3].

The ICR is per capita the most successful higher education institution in the UK at commercialising its research, and holds up strongly against international competitors.  During the 2012-13 academic year the ICR entered into agreements with 71 different commercial organisations, governing areas such as drug discovery and the development of medical technologies.

Whilst the primary aim of our collaboration with industry is to support the translation of our research into patient benefit, analysis of the higher education business and community interaction (HEBCI) survey data shows that ICR generates significantly more income per head of academic staff than any other higher education institution. In terms of absolute amounts of revenue generated the ICR is second in the UK, behind the (much larger) University of Cambridge.

We are only aware of five US universities that have a greater invention income than the ICR when adjusted for size - Princeton University, Northwestern University, New York University, Wake Forest University and Columbia University.

Due to the ICR’s success in the field of drug discovery and development and commercialising our research in this area, the ICR is known as an exemplar of the ‘therapeutic centres of excellence’ model of drug discovery that is advocated by many of the leading learned societies in the field[4]. We believe that the ICR’s success in commercialising research is due to:

• Our innovative basic science and world class drug discovery

• Close partnership with an excellent disease-specific hospital

• The flexibility of our partnership models

• Maintaining good communications with relevant industry contacts to ensure we understand industry requirements and have a ready market for our drug discovery efforts. This is helped by recruiting drug discovery scientists with industry experience

• HEIF funding to support us in commercialising our research

• Strong leadership with talented and entrepreneurial staff with significant industrial experience

• Staff who are passionate about linking high-quality science to improved outcomes for cancer patients.

Recent BIS analysis found that the UK exhibits “a sustained, long-term pattern of under-investment in public and private research and development and publicly funded innovation”.  How does this affect business-university collaboration in the UK?

The under-investment in R&D described affects UK innovation in several ways.

Firstly by affecting the pipeline of innovative scientific discoveries which have the potential to be commercialised and developed for the benefit of the population. The gradual decline in the UK’s science spending risks slowing scientific progress and damaging scientific and technological innovation.

Secondly, by creating a funding gap that prevents innovative scientific discoveries from progressing to new treatments, on to early stage clinical trials and beyond, due to the ‘valley of death’. In our experience, companies prefer to take on projects which already have clinical proof of concept, creating an innovation gap where the impact and benefits of scientific discoveries cannot be fully realised due to lack of early stage funding.

As a specific example of the impact of the decrease in funding in one of the fields that the ICR works in, there is also a significant threat to UK drug discovery capability due to the decline in skilled practitioners in drug discovery associated with the contraction in the pharmaceutical and biotech industries. It is vital that we retain capacity to train the next generation of drug discovery scientists, and there is a significant role for academic institutions in training these students. The ICR does not qualify for Research Council funded studentships, and charities fund few PhD studentships. The ICR is able to fund some studentships directly, but not at level to meet national these national skills shortages.

Recommendation:

• Government should play a stronger role in funding projects across the valley of death and invest in early stage research and risk sharing initiatives.

Will the changes to Higher Education Innovation Funding (HEIF), proposed in the Witty Review, be successful in increasing university engagement with innovative SMEs?

In the Witty Review, Sir Andrew recommended that the Government should make an explicit long-term commitment to HEIF funding, increasing the funding to £250 million per year. We welcome Sir Andrew’s comments on the importance of this funding. HEIF funding has been a critical factor in the ICR’s success in engaging with companies to develop our science for the benefit of patients. Building links with industry is about building relationships and this requires continuity.  This funding needs to be guaranteed for a number of years to allow these to be developed and retained.

The Government states that it is unable to increase the level of HEIF funding at the present time, but we strongly recommend that this is considered in future.

Sir Andrew also makes the recommendation that institutions’ HEIF strategies should include details of how HEIs are working with local SMEs, as a route to incentivise HEIs to work with local business. We find the suggestion that HEIF strategies should focus on local SMEs to be overly restrictive. The majority of SMEs lack the capacity to take up the outputs of university research and it is important that universities continue to support access by all types of companies to their IP assets to ensure that they are developed for economic and public benefit. HEIF funding should be available to support all forms of knowledge exchange, and it is important that HEIs have the opportunity to capitalise on their strengths, rather than providing a restrictive model for these activities.

At the ICR, our main HEIF funded activities include protecting ICR technologies (primarily through patenting), establishing collaborations with industry, and licensing technologies to industry. Because of the specialist nature of the ICR, the primary target sectors for our knowledge exchange activities are the pharmaceutical, biotechnology and medical equipment industries. It is important for us to work with companies that will take our research findings to cancer patients; speed to impact and patient benefit is our primary driver in choosing our partners. We need partners with the available expertise and resources and this is not always found within SMEs. Our market place is international, and we will always seek to engage with the most appropriate partner no matter their size and where in the world they are located. With our drugs discovery research, we often work with large and sometimes distant pharmaceutical companies, as they have the resource and expertise to take products through regulatory approval and to the market. We feel that prioritising a local business without a track record or capability in our field might not maximise our chances of taking a technology to patients and realising the economic benefit of our research.

Equally, the local university might not be the most relevant partner for SMEs.

Recommendations:

• We highly recommend that an increase in the amount of HEIF funding available is considered in future long term planning.

• We do not believe that HEIF strategies should focus on SMEs and local businesses, but that HEIs should work with companies most able to generate social and economic benefit from their research.

What has been the effect of including commercial ‘impact’ criteria in REF assessments, and should the weighting increase to 25% as suggested in the Witty Review?

We would have concerns over making decisions on this proposal before the effect of including ‘Impact’ in the current REF exercise has been monitored carefully and the outcome of including impact has been assessed.

A potential outcome of the inclusion of Impact in the REF is that funding will move from blue skies research to applied research, which may not be most appropriate for HEIs and the UK in the longer term. We need a balance of both basic and applied research and many important technologies, such as smartphones and low cost genome sequencing, were developed as a result of basic research, the application of which was not identified when it was carried out. We need to ensure there remains the capacity and incentive to make the serendipitous discoveries that can have huge impact as well as those where the impact is planned. Increased weighting of Impact in the REF could increase the danger of missing these opportunities.

Recommendation:

• The effect of introducing Impact in the REF should be monitored and the weight should not be increased until we have had time to analyse the effect of its introduction.

How can Local Enterprise Partnerships (LEPs), universities and Government encourage greater regional R&D investment?

The Regional Development Agencies (RDAs) were abolished in 2012, and some of their remit around economic development was later taken on by LEPs. We welcomed the LEPs’ aim of maximising the potential for effective collaboration between HEIs and business as there is a need for some regional infrastructure to stimulate and exploit ideas and raise productivity.

Again we feel that there is a need for continuity and stability in order to get the most success from this model. There is still a lack of clarity over the work of the LEPs and how HEIs can best interact with them. 

28 April 2014