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Letters: Innovation is alive and thriving in UK

Your article proclaiming the “death of early-stage drug discovery firms” (Why have Britain’s biotech stars faded away?, 30 August) fails to spot a huge change in the pharmaceutical industry, which has had a dramatically positive effect on the biotech sector. The pharmaceutical industry faces up to 0bn in losses as brand names face competition from cheap generic alternatives. As a result, most big pharmaceutical firms have moved away from internal R&D towards buying in new development-stage products with high growth prospects. Morgan Stanley has estimated that bought-in compounds will deliver three times as much value per pound invested as in-house research, so this approach makes sense overall.

As a leading venture capital company, we have recently sold three UK biotech companies to major pharmaceutical companies for more than 0m. Last year, Johnson & Johnson acquired Imperial College-based Respivert, which is developing new treatments for asthma, chronic obstructive pulmonary disease and cystic fibrosis. Before that Pfizer acquired Oxford-based Powdermed for its novel vaccine products, including its pandemic flu drug. AstraZeneca’s earlier acquisition of Cambridge-based Kudos has been equally successful: AstraZeneca has recently announced phase two study data showing that Kudos’s drug Olaparib can shrink or stabilise tumours in half of serious ovarian cancer patients possessing a particular target mutation.

The reason why the UK public biotech market is shrinking is thus a simple one. Successful early-stage biotech companies are being increasingly bought directly by big pharmaceutical companies. These are able to devote substantial funds and expertise to developing such life-changing new drugs, something that the older small public biotech companies cannot do, because of a shortage of cash. Innovation in the UK is thriving and healthy. Patients will continue to benefit from novel therapies discovered in UK biotech companies, even if these companies never tap the public markets.

Kate Bingham

Managing partner, SV Life Sciences Managers LLP

• Is there any reason why the government should not solve its problems with the commercial banks (City attacks Cable after claim banks are using euro crisis to delay reform, 1 September) by creating state banks to serve as the vehicle to supply credit for cash-strapped businesses, directly funded by the government and deposits from companies and the public, and acting as a safe deposit for pension funds etc? Could not the Post Office be brought into such a system and thereby retain its important social role; and bearing in mind that the Bank of England, overseeing the private banking sector, is already in the public domain, there can be no pretence that private management is superior to public.

Francis Westoby

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