The Impact of the Disinvestment by Astrazeneca at Alderley Park, Cheshire Final Report Contents
The i mpact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Volume 2: Future Market Demand Assessment Final Report
Commercial in Confidence
11 February 2014
The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report Contents
Executive Summary ...... i 1. Introduction ...... 1 2. Setting the Scene ...... 5 3. Thinking & Planning for Demand ...... 30 4. Projection 1 – An Initial Perspective on Demand ...... 43 5. Qualitative Perspectives on Demand – the General View ...... 53 6. Qualitative Perspectives on Demand – the particular case of HE and Research Institutes ...... 72 7. Projection 2 - A Revised Perspective on Demand ...... 78 8. The Story of Existing and Pipeline Supply ...... 81 9. A Forward View of Economic Impact ...... 89 10. Conclusions and Recommendations ...... 93
Annex A: Stakeholder Consultation ...... A-1 Annex B: Key Assumptions in the Demand Model ...... B-1 Annex C: Lessons from elsewhere ...... C-1 Annex D: Summary of the physical offer at Alderley Park (Mereside Zone) ...... D-1 Annex E: Key maps from the Witty Review ...... E-1
Contact: Luke Delahunty Tel: 0161 475 2106 email: [email protected]
Approved by: Simon Pringle Date: 11 February 2014 Director
www.sqw.co.uk The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report Executive Summary
1. In March 2013, AstraZeneca announced its intention to relocate its R&D functions from its current site at Alderley Park in Cheshire East to a new site in Cambridge by 2016. Alderley Park currently supports around 3,000 staff, and is AstraZeneca’s largest R&D facility globally. Under these plans, R&D activity will no longer be carried out at Alderley Park, with around 1,600 roles relocated to Cambridge. Around 700 non-R&D AstraZeneca roles are expected to remain at the site.
2. Cheshire East Council, on behalf of the Alderley Park Task Force, commissioned SQW Ltd (SQW), supported by Bionow, to undertake a study into the effects of AstraZeneca’s relocation decision. The study involved two complementary work strands: an Economic Impact Assessment (reported separately) and a Market Demand Assessment. This Executive Summary focus on the latter of these studies.
Study Findings
Context
Sector Trends . . .
3. The Life Sciences sector is projected to grow significantly over the coming years. The market prospects for the sector generally in OECD countries are highly positive for the future. This is an encouraging general backdrop for the repurposing of activity at Alderley Park.
4. Outside the OECD, the position is more disruptive with radical changes in demand anticipated in the BRIC economies and, most notably, those in Asia. This is leading to consequential shifts in the ‘geography’ of Life Science R&D, clinical trials and manufacturing. It is also stimulating major investments in new translational medicine capability in new geographies, to serve new, growth markets. A key challenge for the industry is to find sustainable value in Europe.
5. The expiry of patents on many pharmaceuticals companies’ main products is a key factor, leading to the growth of the generic pharmaceuticals market. In many countries, cost-cutting pressures on healthcare regimes are driving increasing demand for cheaper alternatives.
6. In response, the industry is making substantial efforts to change business models, which include investing more in developing ‘niche buster’ therapies. There are moves for greater involvement by Small and Medium-sized Enterprises (SMEs) through the growth of ‘open innovation’. In so doing, there are severe challenges for SMEs in the UK in securing risk investment for innovation.
Policy Drivers
7. At EU and UK levels, the policy landscape for the Life Sciences is supportive. Life Science is a key focus for the Horizon 2020 programme, with its emphasis on seeking to build European leadership in key enabling technologies, and their combination. The Strategy for UK Life
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Sciences, and the Technology Strategy Board’s initiatives, define a clear agenda for developing the UK’s capacity and capability within the Life Science arena.
8. The NHS, as the largest integrated national health system in the world, offers major potential for Life Science companies, through the unrivalled size of its patient database, as a value- creator and an engine of economic growth, and because of the trend towards increased private sector involvement.
9. With appropriate focus and targeting, there is a real opportunity for Alderley Park to align and link with these emerging policy agendas. In so doing, this would put the facility at the centre of the government’s thinking and plans for the sector’s future growth and development.
Qualitative messages for demand at Alderley Park – general
10. Interviews with more than 60 senior and expert stakeholders to take views on the likely demand for a Human Health Science-focused facility at Alderley Park reveal the following:
• Alderley Park is perceived as an opportunity of national significance, and there is wide support for its development:
‹ There is a significant supply of (generally, lower quality) bioscience space currently available across the North, but most sites are experiencing high occupancy levels. The pipeline of proposed future space is significant
‹ The landing of one or two significant ‘rain-maker’ investments at Alderley Park is viewed as being important in terms of triggering wider momentum, and providing comfort to hesitant firms who may be considering the facility
‹ Retention of both an active AstraZeneca R&D presence on-site, and the technical skills to operate the existing specialist science facilities, will be powerful and distinguishing components in a rebirthed site’s success.
• Creating a complementary, yet differentiated, offer at the regional/Northern level will be key:
‹ There is a strong call for the site to be seen as a strategic play for the North of England’s economic and scientific well-being, not simply a property scheme
‹ A strategic decision needs be taken as to whether Alderley Park should position itself in the UK’s Premier League of Life Science players, or whether it should be leading a First Division effort
‹ The lack of a shared vision and strategy for growing the North West’s Life Science base is a major issue. Without this, there is limited clarity as to where Alderley Park will fit in.
• Whilst being opportunistic and flexible, a facility at Alderley Park should have a core differentiating focus. The Task Force’s proposal that this be around Human Health Science is broadly endorsed. Within this space Alderley Park should target companies and organisations, including health charities, engaged in drug discovery and development R&D, as well as support services and associated product areas
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• Several niche target sub-sectors are identified for focus within the overarching Human Health Science umbrella. These include the following, which might be progressed through the creation of formal centres of excellence:
‹ In terms of general sectoral trends : molecular diagnostics; companion diagnostics; stratified (personalised) medicine; clinical trials; biologics; and synthetic biology
‹ Reflecting Alderley Park’s specialist facilities and services : in-vivo activities; cytotoxic activities; pilot manufacturing; radio-labelling; high-throughput screening; high-end mass spectrometry; and compound management/storage.
• Demand is expected from:
‹ Start-up businesses developed by former AstraZeneca employees (supported through the BioHub model), as well as a modest number of spin-outs from local universities and NHS Trusts
‹ SMEs in Human Health Science currently located across the UK, but primarily from within the North West and neighbouring areas
‹ Inward investors looking to access UK (including NHS) and European markets
‹ To a lesser extent, the research councils, universities, NHS and health charities, looking to establish R&D ‘projects’ or centres at Alderley Park.
• The quality of the Alderley Park offer is identified as being key:
‹ It is a facility of quality, sophistication, and scale. This, together with its specialist equipment, makes it a very significant asset for the Life Science sector in the North of England
‹ Given its excellence, there is a clear concern that the quality of the asset may fall off in the future
‹ Flexibility will be needed to allow specialist firms to configure their spaces as they so wish. Business experts anticipate a demand for lease flexibility in terms of duration, and in terms of restrictions/covenants.
• On the mix of provision:
‹ The primary demand will be for general/specialist laboratory and write-up space, especially from amongst those firms engaged in drug discovery and biotechnology (including diagnostic and therapeutic development activities)
‹ Office space is likely to be an important part of the mix, especially for those firms providing services of a non-physical nature, either to tenant firms at Alderley Park, or elsewhere in the Human Health Sciences sector
‹ The basic supporting infrastructure at Alderley Park is judged positively.
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• There are mixed views on the site’ physical connectivity. . . and access to specialist skills and expertise:
‹ Physical connectivity to Alderley Park is judged, generally, to be good, with the potential to improve further over time
‹ Access to specialist skills is good, with a steady supply of graduates and postgraduates from the North West’s universities
‹ The loss of AstraZeneca itself from the North West cluster is likely to have a direct impact on the availability of skills and capabilities in the region for the long-term, given the strength of the AstraZeneca diaspora in the North West.
• The North West cluster is seen as being distinctive, with significant growth potential:
‹ It is different to the clusters within the Golden Triangle and the central Scotland belt. It benefits from a large, diverse population (including a large number of graduates), a significant grouping of healthcare-related institutions and facilities, and a strong manufacturing/engineering heritage as well as several large-scale bio-manufacturing plants
‹ The North West is able to provide a different offer given that it has well- established bio-manufacturing strengths (e.g. at Macclesfield and south Liverpool) as well as significant R&D and academic/clinical expertise (predominantly in the urban centres).
• Linkages between Alderley Park and the wider cluster need to be strengthened:
‹ The dominant view is that, to date, these have been limited in scale. As Alderley Park looks to a new future, it needs to be seen, and perform, as a more integrated part of the North West Life Sciences ecosystem
‹ There are opportunities to establish relationships with the local Higher Education base, NHS Trusts, as well as health charities. These should be explored, and could, over time, become very important. Qualitative messages for demand at Alderley Park – Higher Education and research institutes
• It is highly unlikely that Alderley Park has a role to play in hosting student teaching. By contrast, it does have potential to accommodate HE spin-outs. However, overall, the view is that this component of the potential tenant mix at Alderley Park will be modest.
• The relocation of research activity at Alderley Park has clear potential, not least around the use of specialist equipment and expertise. But, neither of the two most relevant research councils – the Biotechnology and Biological Sciences Research Council (BBSRC) and the Medical Research Council (MRC) – are considering new institutes, and it is highly unlikely that they will in the future.
• There are three live opportunities for Alderley Park (i) the Catapult for Diagnostics for Stratified Medicine, and (ii) the intention of the TSB’s Formulation Special Interest Group to establish an open access innovation space for advanced formulated product
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design/manufacture, and (iii) the Engineering and Physical Sciences Research Council’s (EPSRC) call to establish up to six multidisciplinary Synthetic Biology Research Centres.
• In terms of the potential demand from health charities, there is no current evidence, in the plans and strategies of appropriate targets, to suggest a requirement for the sorts of facilities or accommodation at Alderley Park.
A quantitative assessment of demand
11. An Excel-based Demand Assessment Model for Alderley Park developed by the study team has helped to inform a rounded assessment of demand for space at the facility. In the period 2013 to 2030, the Model (informed by feedback from senior-level stakeholder consultations) projects demand for 67k sq. m of space, of which 22k sq. m is ‘Office Only’ and 45k sq. m is ‘Laboratory and Office’. Over the period, this translates into an average annual take-up of 3.7k sq.m per annum. Importantly, some 8.4k sq. m of this projected additional demand (c12%) will be accounted for by the retained 700 non-R&D AstraZeneca staff on-site.
Existing and pipeline supply
12. Across the defined supply-side area for the study, there is currently a significant supply of office and laboratory space (more than 90k sq. m) with a clear focus on Life Science R&D and related purposes. Some of the identified schemes are relatively modern and some are much older. Similarly, some sites are located in city-centre environments close to NHS Trusts and university Life Science departments, whilst others are based in out-of-town locations, often near to motorway junctions. Looking to the future, the amount of accommodation focused towards occupiers from within the Life Sciences is expected to increase substantially, as pipeline developments (estimated to total c340k sq. m) are brought forward.
13. Given the size and nature of both the existing supply of accommodation across this part of the North West, as well as the various schemes that are in the pipeline, there is no shortage of space in potential competitor locations for Alderley Park. It is vital, therefore, that Alderley Park develops a strong brand and Unique Selling Point (USP), maximising the clear strengths of its sophisticated hard and soft infrastructures. Additionally, it will be important for any science park development at Alderley Park, as well as those other significant North West schemes in the pipeline, to be progressed in a coherent, complementary, and mutually reinforcing fashion.
Conclusions and Recommendations
14. In light of the evidence presented in this report, the overarching conclusion from the study is that a high-quality science park development, focused on the ‘ Human Health Sciences, Technologies, R&D and processes ’ should be progressed at Alderley Park.
15. More specifically, the scheme should seek to build on Alderley Park’s well-developed heritage and USP as a major innovation hub for drug discovery and development, leveraging the specialist facilities and expertise retained on-site, as well as differentiating its offer clearly from potential competitor locations across the North of England.
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16. Based on the totality of the report and its evidence base, 20 detailed recommendations are identified. These have been grouped into five overall ‘Progression Themes’, as below:
Executive Summary Table 1: Recommendations Progression Theme 1: Develop a long -term vision and strategy for Alderley Park 1. A clear and focused statement of the intent that Alderley Park is ‘opening for business’ should be declared by the Task Force. This will inform the market and wider stakeholders that the site will have a targeted focus on Human Health Sciences, Technologies, R&D and processes, and will be progressed as a collaborative and integrated part of the North West of England’s Life Sciences ecosystem. [Task Force/successor body, and senior-level partners in the North West] 2. There is a very extensive body of experience in repurposing large -scale facilities such a s those at Alderley Park . The Task Force and partners are recommended strongly to review this material early, and ensure that as detailed commitments and sale deals are entered into, these are informed by this learning. The unhelpful reinventing of wheels should be avoided. [Task Force/successor body, and new site owner/operator] 3. A decision should be taken on the future strategic positioning of Alderley Park in the UK’s Life Sciences hierarchy – simply put, should Alderley Park be seen as part of the UK’s Premier League of Life Science locations (alongside Cambridge, Oxford, and the wider Golden Triangle) or should it be leading the First Division effort which complements this (alongside key assets in Scotland and the other regions)? The advice to the Task Force from this report is that the second of these options is the more flexible, and realistic, starting choice. [Task Force/successor body, new site owner/operator, key regional/city-regional/sub-regional partners (including the Local Enterprise Partnerships,( LEPs)), Department for Business, Innovation and Skills (BIS)] 4. Informed by Recommendation 8 below, it is recommended that a specific development vision and marketing strategy for Alderley Park be produced. It should describe unambiguously where Alderley Park will fit within the ‘map’ of Life Science activity regionally and at the level of the North England. These efforts should have a strong focus on setting and the differentiated offer of the facility, thereby helping to address current underlying partnership concerns, and reduce uncertainty. [Task Force/successor body, new site owner/operator, sub-regional/regional partners, the North West Business Leadership Team, the emerging North West Life Sciences Group, and the two Academic Health Science Networks] Progression Theme 2: Build and sustain a highly differentiated offer at Alderley Park
5. Retention of an active AstraZeneca R&D activity on-site would be a very powerful, and distinguishing, ingredient for the rebirthed site’s success. A commitment to an R&D office or ‘gateway’, which provides Park tenants with future access to AstraZeneca’s knowledge, R&D troubleshooting expertise, and international networks, would be an innovative solution . The Task Force is recommended to explore the feasibility of progressing this outcome with AstraZeneca. [Task Force/successor body, new site owner/operator, AstraZeneca] 6. Effort and resource should be invested in attracting early, high profile ‘rainmaker’ anchor tenants, from across the UK or overseas , to kick-start the scheme, launch a culture of Open Innovation, and evidence the ‘open for business’ imperative. Partners are recommended to work together to make sure that strategically important investment projects are not lost to competitor locations elsewhere in the UK or Europe. As significant R&D functions are attracted to the site, this will go some way to offsetting the loss of high quality jobs, talent, and access to international networks caused by site disinvestment. [Task Force/successor body, sub-regional/regional partners, UK Trade and Investment (UKTI)] 7. Whilst AstraZeneca remains at Alderley Park, there may be some firms who may be attracted to the facility specifically to develop links with the firm before it moves to Cambridge . Linking with the point immediately above, the Task Force is recommended to explore with AstraZeneca the scope for engaging actively with these sorts of opportunistic firms. [Task Force/successor body, AstraZeneca] Progression Theme 3: Develop and integrate with the wider North West Life Sciences cluster 8. An evidenced strategy for the integrated development of the Life Sciences across the North West of England should be developed , setting out the offer, development priorities, and assets (this in terms of academic science/clinical bases, land and property, specialist facilities/equipment, and wider innovation ecosystem resources). This work should link to the recent evidence base developed by the North West Business Leadership Team, and build on previous strategic thinking for the sector in the region. It should also align with national Life Sciences mapping work being led by UKTI and partners. [Task Force/successor body, new site owner/operator, sub-regional/regional
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partners, the North West Business Leadership Team, the emerging North West Life Sciences Group, and the two Academic Health Science Networks] 9. The site’s new owner should be alert fully to the wider plans elsewhere in the region for Life - Science-facing land and property, and engage and support accordingly . At the same time, counterpart operators from across the North West should aim to position their schemes as best they can, to complement Alderley Park’s intent and offer. By driving maturely for differentiation and complementation, genuine synergy should be realised. [New owner, with advice from the Task Force/successor body, and other scheme operators and promoters in the North West/North of England] 10. The relocation of Higher Education research activity to Alderley Park has potential , not least around specific equipment and facilities at the site. The alignment of the site coming to market with the forthcoming development of the national Science and Innovation Strategy in 2014 is helpful, and an opportunity of coincidence that the partners are recommended to leverage actively for Alderley Park’s benefit. [Task Force/successor body, regional university partners] 11. A number of ‘live’ opportunities exist for A lderley Park and should be captured . Specifically, the Diagnostics for Stratified Medicine Catapult, the Synthetic Biology Research Centre, the TSB’s Formulation Special Interest Group, and the current bid to Round 5 of the Regional Growth Fund are all recommended to be pursued actively, using political influence and corporate leverage. [Task Force/successor body, new site owner/operator, regional university partners, NHS Trusts]
12. Recognising the calibre and quality of staff that AstraZeneca has been able to attract to, and retain in, the North West, it is recommended that partners consider what alternative strategies and actions are now appropriate to ensure that ‘the regional skills pool’ is not permanently diminished . [Task Force/successor body, and wider partners in the North West of England, Cogent ] [Shared recommendation with Volume 1 – Economic Impact Assessment] Progression Theme 4: Maximise demand from the ‘AZ entrepreneurs’, and foster a sizeable start-up community 13. There is a time -limited opportunity to create a significant community of start -ups at Alderley Park from amongst former AZ employees . This should be recognised as a priority by the Task Force and supported as such. In addition to tailored incubation support, early stage firms will require start-up finance, and attention should be given to assembling suitable packages drawing on, for example, Regional Growth Fund 5, other public, private company, and Angel cash. [Task Force/successor body, new site owner/operator, regional partners, BIS] 14. A strategy for ensuring that specialist equipment/services/facilities are not transferred to Cambridge and retained at Alderley Park post 2017 is recommended . This should ensure that ‘kit’ is matched up with ‘expertise’ to operate and manage these assets, perhaps through the medium of specialist spin-out companies. This strategy should be framed by a detailed audit of all specialist equipment, technical facilities, and operational expertise at Alderley Park, initiated as soon as possible in conjunction with AstraZeneca. [Task Force/successor body, AstraZeneca new site owner/operator]
15. Pan-regional discussions are underway regarding the use of high-field Nuclear Magnetic Resonance (NMR) instruments across the North West, Yorkshire and Humber, and North East regions, covered by the N8 university partnership. There is a clear opportunity, breaking sooner rather than later, to link this proposal to the existing NMR infrastructure at Alderley Park . It is recommended that this potential opportunity be explored fully. [Task Force/successor body, regional university partners, N8 university partners] 16. There is a significant opportunity for the AstraZeneca diaspora in the North West to come together in a formalised manner to provide expert mentoring to the new business start-up community at Alderley Park . This could play a vital value-adding role alongside existing incubation efforts in providing valuable management, leadership, and international experience needed to establish and build new Life Science firms. It is recommended that the feasibility of such a model be tested formally and, as appropriate, progressed. [Task Force/successor body, regional partners, AstraZeneca, and former employees’ networks] Progression Theme 5: Meet the key delivery ch allenges
17. Given the current excellence of the Alderley Park infrastructure, there is an underlying risk that the quality of the asset may reduce in the future, given that a new owner may not wish to invest at the same scale as the present one . The Task Force is recommended to recognise this as a key issue, and to be alert to it as discussions about site ownership and medium-term development plans are progressed. [Task Force/successor body, new site owner/operator]
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18. Alderley Park does not have a strong r eputation for engaging more generally with the North West Life Science cluster . This issue needs to be addressed actively, and to be seen as such. Linked to this, opportunities to develop site-to-partner linkages (e.g. to the sub-region’s HEI base, NHS Trusts etc.), need to be progressed, especially so where there is little prospect of these partners having a physical preference at the facility. Accordingly, it is recommended that action be progressed promptly and with visibility to start repositioning the engagement profile and activity of Alderley Park. [Task Force/successor body, new site owner/operator, and regional partners] 19. Given the complexity of the forthcoming task, the new owner of the site is recommended to appoint a proven and recognised sector specialist with delivery skills to help bring forward the development and implementation of the facility. Key competences to ensure here include experience in supporting start-ups, second-stage development, securing Foreign Direct investment, and networking. [New owner, with advice from the Task Force/successor body]
20. Alderley Park’s offer lacks the co-location and ’thick market’ benefits that characterise Life Science investment within certain segments of the market, typically in urban locations. This ‘detachment’ from urban centres cannot easily be addressed physically, but can be mitigated by communication and virtualisation technologies, and collaborative behaviours. It is recommended that consideration be given to how the ‘challenge of geography’ can be addressed, as part of the new facility’s proposition to the market. [Task Force/successor body, new site owner/operator] Source: SQW
17. Responsibility for implementing these recommendations rests with a number of different groups and partner organisations. However, it is envisaged that the Task Force, AstraZeneca and its Board, and the new site owner/operator will adopt significant leadership roles, ensuring that the 20 recommended actions are delivered effectively and quickly, for the long- term benefit of Alderley Park, the wider North West Life Sciences cluster, and UK plc.
viii The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report 1. Introduction
Study Context and Purpose
1.1 In March 2013, AstraZeneca announced its intention to relocate its R&D functions from its current site at Alderley Park in Cheshire East to a new site in Cambridge (at the Cambridge Biomedical Campus) by 2016. Comprising a total footprint of around 300,000 sq. m, Alderley Park currently supports around 3,000 staff and is AstraZeneca’s largest R&D facility globally. The Alderley Park site forms a core component of the economies of Cheshire and Warrington and the southern half of the Manchester City Region, and is one of the most significant commercial R&D assets in the UK.
1.2 Under the plans announced by AstraZeneca, R&D activity will no longer be carried out at Alderley Park, with around 1,600 roles relocated from Alderley Park to the new location in Cambridge. Around 700 non-R&D AstraZeneca roles are expected to remain at Alderley Park in support functions following the disinvestment.
1.3 In response to the announcement, a Task Force was formed involving representatives of Local Authorities (Cheshire East and Manchester City Council), the Cheshire and Warrington Local Enterprise Partnership, the University of Manchester, Bionow, the Department of Business, Innovation and Skills (BIS), and AstraZeneca, with the support of local MPs, to mitigate the effects of the disinvestment on Cheshire East, and the wider North West of England, and to ensure a sustainable economic future for the Alderley Park site.
1.4 On behalf of the Task Force, and to inform its work, Cheshire East Council commissioned SQW Ltd (SQW) in summer 2013 to undertake a study into the effects of AstraZeneca’s relocation decision. The study involves two complementary, work strands:
• Strand 1: Economic Impact Assessment (EIA) to identify the quantitative and qualitative effects of the relocation on the impact area, with a focus on the Gross Value Added (GVA) and employment effects
• Strand 2: Future Market Demand Assessment to inform the future development and use of the Alderley Park site post-AstraZeneca’s relocation, with a specific focus on its on-going role as a major location for knowledge-based economic activity and enterprise in the Cheshire and Warrington, and wider North West regional economy.
1.5 The study, and its complementary strands, has been overseen by an Executive Group comprising representatives from Cheshire East Council, Manchester City Council, the Cheshire and Warrington Local Enterprise Partnership, the University of Manchester, Bionow, BIS Local and AstraZeneca, with the Executive Group reporting to the Alderley Park Task Force.
1.6 This report, Volume 2, sets out the findings of the second strand of work; as such, it should be read alongside the separate Economic Impact Assessment Report, Volume 1.
1.7 In framing this Demand Assessment, two high-level objectives were defined in the original Terms of Reference:
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• Create a detailed ‘bank of knowledge’ of the Life Science sector in the North West and UK to inform the Task Force’s thinking on demand-side considerations. The knowledge resource should assess the strengths and weaknesses of the North West’s Life Science offer, and consider how the Alderley Park site can add to the existing offer, creating a leading-class Life Science cluster in, and for, the North West of England.
• Undertake a ‘soft market’ test on the current/future (facilities) requirements for Higher Education (HE) and research institutions across the UK, but specifically within the North West region, and assess the potential of Alderley Park in supporting these, as part of a wider regional Life Science offer.
1.8 Deliberately, this report seeks to address these requirements jointly, rather than as separate issues, reflecting the increasingly close inter-relationship and synergy between Higher Education (HE), the wider research base, and the growth and development of the Life Science sector. To treat these elements in isolation of one another is, potentially, artificial.
1.9 One further caveat is made up-front. Whilst this demand work has sought to provide as ‘firm’ and tangible an offer to the market as possible, AstraZeneca is still considering carefully its final position regarding residual site use and infrastructure legacy. The potential for further changes in AstraZeneca’s thinking as it achieves its final end game, and the consequences for demand, should be borne in mind when reading this report.
Parameters
1.10 At the outset of this report, the reader should be clear on three key framing parameters:
• The focus of attention for the demand work is the 80,000 sq. m of space at Alderley Park, known as the Mereside Zone. This demand work does not take in any elements of the wider site outside this area.
• The hypothesis for undertaking the demand assessment is that Alderley Park should, going forward, become a nationally recognised centre of expertise in ‘Human Health Sciences, Technologies, R&D and processes’. This definition was approved formally by the Task Force at its meeting on 29 August 2013.
• In seeking to review demand in any context, it is critically important to be alert to potential displacement effects i.e. in Alderley Park’s case, its future success is secured simply at the expense of other similar existing, or proposed, developments. It was outwith the scope of this study to map these displacement effects nationally, or even regionally. So, pragmatically, a supply-side study area within a 45-mile radius of Alderley Park was defined, within which competitor offers have been characterised and reviewed to help provide a net, rather than simple gross, assessment of demand at Alderley Park. The operating experience of other comparator sites and successful Life Science clusters further afield have also been reviewed as part of the study process, although this does not form part of the more detailed supply assessment.
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Study Approach
1.11 The programme of research comprised a mixed methods approach with four main areas of activity:
• An extensive consultation programme with national, sub-regional and local stakeholders, covering businesses, universities, funders, the NHS, government departments, local authorities and science parks/incubators. These consultations, engaging more than 60 stakeholders and firms, were undertaken to (i) raise awareness of the emerging Alderley Park opportunity, but (ii) more fundamentally, to capture expert views on the likely scale and nature of demand for accommodation at Alderley Park over the coming years. Annex A sets out details of all consultees involved.
• The development of an Excel space–based Demand Assessment Model, populated with a suite of assumptions drawn from information collected through the desk research, and revised in the light of evidenced feedback from an extensive programme of senior-level stakeholder consultations (see previous bullet point).
• Desk research on likely future market conditions and emerging trends within the Life Sciences, drawn from key policy documents and secondary data concerning the sector globally, in the UK, and in the North West of England. Additionally, the study reviewed the existing and pipeline supply of accommodation for companies within a 45-mile radius of Alderley Park, as well as undertaking a review of potential demand opportunities arising from key developments within the NHS, HE, and the wider research base in the UK.
• Web research and the transfer of tacit knowledge of the SQW/Bionow team on significant Bio- and Life Science incubation and science park developments across the UK and internationally, identifying what has worked well, why, and where there is appropriate application for Alderley Park.
1.12 The report is a key analytical element of the work that the Alderley Park Task Force, working through the Executive Group, has commissioned to deliver a vision and future delivery plan for the Alderley Park site, both absolutely, and in the context of the wider regional landscape within which the site sits.
This Report
1.13 The remainder of this report is structured as follows:
• Section 2: presents a summary of the context for the study, including background information on the Mereside Zone at Alderley Park, a review of relevant policy, and a vital statistics summary of the Life Sciences sector in the UK and at the level of the North of England
• Section 3 : identifies a number of critical lessons and success factors that might frame demand at Alderley Park, drawing on UK and international experience
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• Section 4 : sets out the headline demand numbers from ‘Projection 1’, an initial run of SQW’s Demand Assessment Model for Alderley Park, prior to external calibration and formal testing with stakeholders
• Section 5 : contains a thorough synthesis of the qualitative messages captured from the consultation programme with senior-level stakeholders and firms. This is then augmented in Section 6 with qualitative perspectives of likely demand at Alderley Park specifically from the higher education and research institute segments
• Section 7: provides the results from ‘Projection 2’, a revised version of the Demand Assessment Model for Alderley Park, which incorporates the ‘calibrating feedback’ from the programme of fieldwork consultations with stakeholders and firms
• Section 8: includes a summary assessment of locations within a 45-mile radius of Alderley Park, covering existing and pipeline supply, and with which Alderley Park could, potentially, be in competition
• Section 9: offers a forward view of the net economic impact associated with AstraZeneca’s disinvestment decision, informed by the market demand assessment presented in Section 7
• Finally , Section 10 : presents our overall conclusions and recommendations based on the evidence collected throughout the study process.
1.14 Additionally, a series of supporting annexes are presented:
• Annex A - provides details of those study stakeholders consulted for judgements on qualitative aspects of impact and contains a copy of the topic guide that was used during all discussions
• Annex B – presents an overview of SQW’s Demand Assessment Model for Alderley Park
• Annex C – contains a review of the critical success factors and lessons from elsewhere in developing internationally competitive Life Science clusters and operating relevant science/research parks, as well as providing learning lessons on the redeployment of large pharma and science-facing assets
• Annex D – sets out a summary of the size and mix of space available at the Mereside Zone of Alderley Park, which will be the spatial focus for any future Human Health Science hub
• Annex E – comprises a suite of ‘heat’ maps focused on the Life Sciences, which have been adapted from the recent Witty Review of the role of universities in supporting economic growth. They highlight key industrial and academic strengths across the Life Sciences within the major urban centres around Alderley Park.
4 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report 2. Setting the Scene
2.1 This Section provides an overview of the background to, and policy context for, the study. Specifically, it covers the following components:
• An overview of the Mereside Zone at Alderley Park, on which the demand work has focused
• A review of the main drivers and trends within the Life Sciences sector, highlighting the ‘direction of travel’ opportunities that this provides, for a potential facility at Alderley Park
• A summary analysis of key Life Science sector characteristics in the North West and across the UK more broadly.
Alderley Park
2.2 Alderley Park is AstraZeneca’s global lead centre for cancer research. It is a major asset of international quality and reputation. During the last decade or so, the site has benefitted from a significant amount of capital investment. This includes £330 million invested in new facilities since 1997, and in excess of £250 million in the ongoing improvement of older assets and infrastructure, providing facilities including state of the art laboratories, an on-site energy plant, restaurant and cafés, a high quality conference centre and multi-storey car parking. All of these facilities are set within a campus environment that incorporates parkland, woodland and lakes.
2.3 Its comprehensive infrastructure offering and installed technical support base are strong differentiators from comparator science parks in other parts of northern England. Indeed, it is one of few facilities in the UK (and Europe) with such a fully integrated and attractive package of specialist equipment and facilities to support drug discovery and development.
2.4 The Mereside Zone of the site offers around 80,000 sq. m of high quality bioscience facilities. The space takes in 19 blocks of buildings (see Figure 2-1), which are allocated to a variety of different categories. The key assets can be summarised as per Table 2-1 below, whilst a more detailed breakdown is provided in Annex D.
2.5 On-site facilities include a large amount of specialist technical and laboratory equipment. For example, the Biobank provides a large data archive that facilitates highly specialised research activities. The Biological Service and Imaging Building houses many of the imaging suites at Alderley Park, including the Nuclear Magnetic Resonance (NMR) and Positron Emission Tomography (PET) scanning facilities. There are also high quality in-vivo facilities, comprising vivaria and rodent houses.
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Table 2-1: Floorspace by usage type within the Mereside Zone at Alderley Park
Total Net Internal Area Key Features (sq. m)
• High quality (premium) chemistry and biology Specialist lab/Write- 22,420 laboratories with associated write-up space Up
• Older/lower specification chemistry and biology labs with Generalised 34,500 associated write-up space lab/Write-Up
• Some open plan offices General flexible 15,000 • Some individual units and meeting rooms office
• In-vivo facilities • Specialist waste handling systems • NMR and PET scanners Specialist technical 7,500 • facility Biobank data archive • Compound library • High throughput screening/robotics
• Servicing areas Wider Facilities 1,000 • Glass cleaning
Total 80,420 Source: SQW
2.6 Despite the site’s non-urban location, it benefits from good transport links and sophisticated labour, business and knowledge markets in Manchester, Liverpool, Sheffield, Leeds, plus the parts of the Midlands and North Wales can be easily accessed, as Figure 2-2 shows. The map also highlights specifically the extensive network of Life Science-related services and industry nearby, including a number of universities with a major Life Science presence, teaching hospitals, industrial hubs of Life Science activity, and health charity-funded facilities.
6 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report Figure 2-1: Map of the Mereside Zone showing the 19 blocks/buildings
Source: Adapted from the Alderley Park Development Prospectus
7 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report Figure 2-2: Alderley Park in context – map of major health and Life Science innovation assets
Source: Produced by SQW, December 2013. Contains Ordnance Survey data (C) Crown copyright and database rights (2013). Licence number 100030994
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Drivers and policies in the Life Sciences . . . & implications
2.7 In setting the context for the demand assessment presented later in this report, it is important to understand the wider environment which is shaping and influencing demand. The remainder of this section focuses on this issue, with the first section, which follows immediately below, looking at the influence of public policy on the likely future shape of demand in general terms. This is then followed with a commentary providing a ‘here and now’ view of the size of the Life Science sector at both UK and North of England levels, and with which Alderley Park will have an opportunity to interact in the short-term.
2.8 Throughout this material, the text is populated with ‘Implications for Alderley Park’ message boxes, to highlight the key points being made.
Dimensioning demand
2.9 The industry that provides products and services for human health is linked to diverse areas of science, technology, business activity, and markets. Its markets range from national to global, with strong influences at national level, from the prevailing healthcare system and its ‘payers’, and at national or transnational/regional levels, from regulatory systems for the approval of new drugs and devices.
2.10 In a recent report, the King’s Fund offers a long term forecast on healthcare funding. Across the 27 EU countries (plus Norway), public spending on health could rise from a baseline of 6.7% of GDP in 2007, to 13% by 2060. Across all OECD countries, public healthcare spending is projected to rise from 5.7% of GDP in 2005 to between 7.7% and 9.6% by 2050, with spending on long-term care possibly doubling or trebling to between 2.4% and 3.3% of GDP over the same period. The report’s authors note: ‘If private spending via social and other insurance schemes is added in, all of these figures increase considerably’ .
2.11 The King’s Fund report suggests that if the next 50 years shows similar growth to the past 50, the UK could be spending nearly 20% of its entire wealth on the public provision of health and social care, with this higher spending having a positive impact not only on the population’s health, well-being and quality-of-life, but also a wider positive impact on economic activity and productivity.
2.12 Based on these forecasts, the opportunities overall for economic development and business benefit in the field of healthcare, across the OECD, remain on an upward growth trajectory. This is encouraging generally for facilities in the proposed footprint that Alderley Park intends currently to occupy.
Implications for Alderley Park The market prospects generally for Life Science products, both in terms of their growth and level of resourcing in the OECD economies is highly positive for the future. This is an encouraging general backdrop for the repurposing and regrowth of Human Health Science activity at Alderley Park.
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Drivers for change . . .
Shifting industry loci
2.13 In many ways, the OECD ‘story’ is familiar, and well understood. Outside the OECD area, however, the position is much more disruptive with radical changes in demand anticipated in the BRIC economies and perhaps, most notably, those in Asia. This is leading to consequential shifts in the ‘geography’ of Life Science R&D, clinical trials and manufacturing. It is also stimulating major investments in new translational medicine capability, in places such as Singapore, to serve new growth markets. Without doubt, this will put pressure on Western- based product and service innovations, to which any development at Alderley Park will want to be alert.
2.14 One important issue for the industry given this emerging demand shift is to find sustainable value in Europe. LEK Consulting estimates that total Pharma spending within the EU5 (Germany, France, Italy, Spain and UK) will decline from 17.6% to 12.7% of the global market by 2016, but for higher-margin branded pharmaceuticals the BRIC countries are expected to contribute only c.7% through to 2016.
‘Where will we by the year 2020? We will have successfully transitioned the system from one which “fixes people after they’re sick” to one of preventative, diagnostic genomic-based medicine. Treating patients for the conditions we know they are likely to develop, and re-architecting the system around that reality. A system which will provide for virtual care through bio-connectivity, and extension of the hospital into a community-care oriented structure. A consumer driven, retail oriented health care environment for non-critical care treatment that provides significant opportunities for cost reduction. Real time analytics and location-intelligence capabilities, which provide for community-wide monitoring of emerging health care challenges. “Just-in- time” knowledge concepts, which will help to deal with a profession in which the volume of knowledge doubles every six years. That and much, much more.
The fact is, we are going to witness more change in the world of health care in the next ten years than we have seen in the last 200.’
Source: Carroll (2011) opening keynote address, World Pharma Innovation Congress, London
Implications for Alderley Park Whilst the outlook at the level of the OECD overall is positive, it will become increasingly difficult to drive long-term sustainable value in Life Science activity in Europe.
At the same time, whilst global demand for healthcare products will grow, the geography of this demand will evolve as developing southern and eastern economies become more important.
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The rise of the generics . . . and the responses being made
2.15 The growing, but changing, geography of demand is a key consideration in understanding prospects for the Life Science sector. So too is the expiry of patents on many pharma companies’ main products which has led to the growth of the generic pharmaceuticals markets. Generic pharmaceuticals already account for over half of the global pharmaceuticals market by volume, but only about a fifth by total value 1. In addition, and notwithstanding the spending projections above, in many markets the cost-cutting pressures on healthcare are allied to increasing demand for cheaper alternatives. However, this is far from the whole story. This is also an industry facing substantial challenge and opportunity associated with quite fundamental shifts in approach to healthcare. The industry is making substantial efforts to change business models, which include investing more in developing ‘niche buster’ therapies.
2.16 As the pharma industry, in particular, in Europe and North America comes to terms with these changes, demand is rising for innovation based on scientific advances and more effective translational processes. High value niches are being identified, such as those for new, combined bio-pharma and diagnostic products, to advance the provision of stratified and personalised medicine. Companies active in these areas which locate at Alderley Park would not only be choosing a location with relevant, high quality facilities on site, but also to an area close to other key elements of the translational process – bioscience research in universities, facilities for clinical trials in the surrounding population, clinical excellence in North West hospitals and a North West business cluster with a skilled workforce. However, innovation is a ‘people contact’ activity and management of Alderley Park will need to work proactively to ensure that business-to-business contact between tenants is supplemented by actions which facilitate connections with key actors in the translational pathway that are not co-located.
Implications for Alderley Park To ensure that the sector continues to compete on content, rather than price alone, in Europe and North America, there will be increased emphasis given to innovation driven from scientific advance and translational processes. If Alderley Park is to capitalise on this area, then it will need to adopt a strongly ‘porous’ operating model which seeks actively to develop these relationships wherever these centres of expertise exist, rather than operating as a self-contained and isolated operation.
2.17 Change is also an important feature of the industry and its markets when viewed from a UK perspective. The following view of market factors emphasises the changes in business models within the pharma industry and the opportunities this offers to smaller players in the context of ‘open innovation’. However, it highlights the severe challenges for SMEs in the UK in securing risk investment for innovation.
‘’Globally, the selective pressures of demographic shift, changing patient & payer needs, declining success rates in R&D, return on investment (ROI) and general economic malaise, are giving rise to new ways of working and
1 IMS Institute for Healthcare Informatics (http://www.imshealth.com/deployedfiles/ims/Global/Content/Insights/IMS%20Institute%20for%20Healthcare%20I nformatics/Global%20Use%20of%20Meds%202011/Medicines_Outlook_Through_2016_Report.pdf )
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changing relationships between the major stakeholders. Big Pharma, Biotech, the Universities and Investors are developing new perspectives and transforming working practices. Just as Big Pharma has reduced in-house R&D, favouring outsourcing, in-licensing and acquisition, many Venture Capitalists (VCs) have withdrawn from traditional investment in early stage drug discovery companies, which increasingly cannot meet the ROI and time horizons required by the funds’ Limited Partners.’
Source: Anon (2013) Realignment: UK Life Science Start-up report 2012. Report by Mobius Life Sciences and BioCity See: http://www.mobiuslifesciences.com/report
2.18 The implications for Alderley Park are both strategic and directly commercial. Facilitating successful access to finance for new start-ups and growth companies on the Park should both attract and retain growth businesses; building a critical mass of growth businesses at Alderley Park both supports the commercial success of the facility and the GVA of the local economy. Achieving success may include, amongst other elements, supporting the investment-readiness of tenants; gaining ‘attention’ for investable propositions with funding sources; creating opportunities for firms to ‘pitch’ to venture capital funds and potentially, building a dedicated source of seed and early stage finance.
Implications for Alderley Park Providing access to finance, building a critical mass of growth businesses with operating density, and ensuring access to services that support the investment readiness in the round of tenants will all be key elements if Alderley Park is to play seriously, and effectively, at the quality-end of the Human Health Sciences segment.
Open Innovation - the new collaboration imperative
2.19 Large drug development companies are developing their ‘absorptive capacity’ in the context of outsourcing and partnering to achieve business efficiency and product development effectiveness – referred to as the adoption of ‘open innovation’. This interaction and partnership between larger and smaller businesses is allowing for, and opening up, the possibility of developing new products and new markets.
2.20 This challenges the competencies of all those wishing to engage in the translational research and development process e.g. it challenges university researchers in terms of strategic partnering and delivery, not only their research credentials. Crucially, for present and potential tenants at Alderley Park, it opens up opportunities throughout the translational process (but notably at pre-clinical and early clinical stages) for innovative SMEs, for example in the development and screening of biomarkers to target the application of therapies.
2.21 By way of example, Figure 2-3 illustrates the translational pathway in the context of stratified and personalised medicine. Today, large and small bio-pharmaceutical companies, and niche diagnostic companies (including start-ups), are actively developing drug-diagnostic combination products. The targeted therapies Herceptin and Glivec have proved that the benefits of using companion diagnostics can far outweigh the challenge posed by a limited target population. Increasingly, innovation is no longer just the preserve of ‘big pharma’ R&D centres (although these large, international companies still have the advantage of market presence and reach), with smaller business now being able to access opportunities through strategic and collaborative partnerships.
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Figure 2-3: Drug Development and Companion Diagnostic Development Pathways
Source: SQW, adapted from Frost & Sullivan
2.22 With the growth of open innovation and the competitive pressures for more effective, efficient translational pathways, there is a substantial business and economic development prize for those with excellent science and technology plus the strategic partnerships involving research, business and clinical practice. But this is a prize that many locations, both in the UK and internationally, are competing for. The challenge for stakeholders at Alderley Park is to help provide tenants, especially SMEs working on innovative therapies and diagnostics, with differentially advantageous access to partners in the translational process, and to sources of finance. This is an ongoing process – a ‘mind-set’ for collaboration - which seriously challenges the resources of new and young companies. For the management of Alderley Park, the task is to facilitate tenants’ access to the partnerships that are crucial to their business, and especially to support this where there is not the advantage of co-location. Additionally, a second challenge will be to ensure that the favourable physical layout and ‘connectedness’ of Alderley Park from an open innovation perspective - as a fully integrated purpose built facility for a large single occupier – is not lost in the future as the campus evolves and develops.
Implications for Alderley Park ‘Open innovation’ is no longer theory; it is increasingly the business model driving the operation of the Life Science sector, especially for those elements competing based on content.
Full understanding and partnering capability is vital to open innovation and the commercial success of SMEs in drug discovery and related fields. Places that assist large, medium and smaller firms to do this well will prove to be attractive locations. Deployed in a way which is more effective than the competition, this could be a key selling proposition for Alderley Park, and which if done well could give Alderley Park a unique positioning in the UK and international landscapes.
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. . . and Policy Positions?
2.23 Support for research and technology development, and for innovation, in the medical biosciences is provided at UK and EU levels. Stimuli are provided by the funding of programmes/projects and of the Research and Technological Development (RTD) infrastructure, which benefits researchers and innovative companies. The process of prioritisation and framing of these publicly-backed initiatives typically involves extensive consultation with industry, the research-base and others on technology and market foresight, and on how to meet major societal challenges. The policy positions provide useful intelligence on tomorrow’s ‘hot topics’.
The European Perspective – Horizon 2020
2.24 Health has been a major theme in the EU’s FP7 Programme, with €6.1 billion earmarked to it. Its successor, Horizon 2020, will be launched in 2014. It has the overall objectives of building European leadership in enabling and industrial technologies, with dedicated support for the specific areas: ICT; nanotechnologies; advanced materials; biotechnology; advanced manufacturing and processing; and space. It will also provide support for cross-cutting actions to capture benefits from combining several Key Enabling Technologies (KETs). The KETs currently in scope include: micro- and nano-electronics; photonics; nanotechnologies; advanced materials; biotechnology; advanced manufacturing and processing. Horizon 2020 will also include actions to facilitate access to risk finance and to support innovation in SMEs.
2.25 The currently expected main areas to receive support in the Horizon 2020 health research work programme for 2014-2015 include those listed in the table below. Participation in international RTD consortia is not for every innovative SME. However, over the term of Horizon 2020, for the management of Alderley Park, the task is to work with tenant companies in order to establish the relevance of European programme funding to them and, where necessary, to facilitate participation in projects that will bring RTD funding and business value. Networking between European science and technology parks is one way of brokering connections between innovative SMEs in the context of RTD project proposal development.
Table 2-2: Personalising Health and Care: Research Themes Understanding health, ageing and disease: • understanding health, ageing and disease: determinants, risk factors and pathways • understanding diseases: systems medicine • understanding common mechanisms of diseases and their relevance in co-morbidities. Effective health promotion, disease prevention, preparedness and screening: • health promotion and disease prevention: improved inter-sector co-operation for environment and health based interventions • health promotion and disease prevention: translating ‘omics’ into stratified approaches • evaluating existing screening and prevention programmes • improving the control of infectious epidemics and foodborne outbreaks through rapid identification of pathogens • vaccine development for poverty-related and neglected infectious diseases: tuberculosis • vaccine development for poverty-related and neglected infectious diseases – HIV/AIDS Improving Diagnosis: • development of new diagnostic tools and technologies: in vitro devices, assays and platforms • development of new diagnostic tools and technologies: in vivo medical imaging technologies • clinical validation of biomarkers and/or diagnostic medical devices
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Innovative treatments and technologies: • new therapies for chronic non-communicable diseases • new therapies for rare diseases • clinical research on regenerative medicine • tools and technologies for advanced therapies • comparing the effectiveness of existing healthcare interventions in the elderly • establishing effectiveness of health care interventions in the paediatric population Advancing active and healthy ageing: • advancing active and healthy ageing with ICT: Service robotics within assisted living environments • advancing active and healthy ageing with ICT: ICT solutions for independent living with cognitive impairment • advancing active and healthy ageing with ICT: Early risk detection and intervention • promoting mental wellbeing in the ageing population • integrated, sustainable, citizen-centred care • developing and comparing new models for safe and efficient, prevention oriented, health and care systems • piloting personalised medicine in health and care systems • advanced ICT systems and services for Integrated Care • self-management of health and disease: citizen engagement and m-Health • self-management of health and disease and patient empowerment supported by ICT • self-management of health and disease and decision support systems based on predictive computer modelling used by the patient him/herself • public procurement of innovative e-Health services • improving health information, data exploitation and providing an evidence base for health policies and regulation • digital representation of health data to improve disease diagnosis and treatment • foresight for health policy development and regulation • advancing bioinformatics to meet biomedical and clinical needs • new approaches to improve predictive human safety testing • e-Health interoperability Source: Working document to be formally confirmed by the European Commission: http://ec.europa.eu/research/horizon2020/pdf/work programmes/health_draft_work_programme .pdf#view=fit&pagemode=none
2.26 The European ‘system’ for advancing innovation in health bioscience also involves a range of relevant, influential networks and co-ordination initiatives that can be very difficult for SMEs to keep track of and benefit from. There is, therefore, merit in the management, at facilities such as Alderley Park, providing ‘qualified’ intelligence on information and emerging opportunities of relevance to tenants on an ongoing basis.
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Implications for Alderley Park Biotechnology is a key focus for the Horizon 2020 programme, with its emphasis on seeking to build European leadership in key enabling technologies, and their combination.
Whilst Horizon 2020 in and of itself is unlikely to create new markets, it will be a major resource to support activity in Europe’s Life Science, biotechnology, and related sectors, and as such will be an important backdrop to any development at Alderley Park.
Ensuring that Alderley Park is alert to the Horizon 2020 ‘opportunity’, and that tenant firms are being linked actively into the range of relevant networks, and coordination initiatives, flowing from the range of forthcoming European programmes, could be a key element of the facility’s differentiated value.
The UK perspective – the Strategy for UK Life Sciences and Technology Strategy Board initiatives
2.27 In terms of UK initiatives, the implications for Alderley Park and support for its tenants are broadly similar at the level of RTD projects/programmes, albeit focused on domestic collaboration for certain opportunities. The important additional factor concerns opportunities to attract RTD infrastructure investments to the Park.
2.28 The Strategy for UK Life Sciences prepared by the Office for Life Sciences, which sits within BIS, confirms the importance accorded to the Life Science sector by government, the scale of its potential business and economic value to the UK, and the strategic actions government intends to take to realise its policy goals. Three quotes from the BIS document set the overall context and provide the assurance, if any is still required, that investment of resources by North West stakeholders in the Life Sciences would be wholly in line with government policy for a sector viewed as having major and ongoing economic importance for the UK.
‘For over 40 years, the UK Life Sciences industry – covering medical devices, medical diagnostics and pharmaceuticals, through to synthetic and industrial biotechnology – has been one of the most successful globally.’
‘The industry is highly innovative and dynamic – it is growing faster than the economy as a whole and is a key source of high-skill, high-tech jobs. Pharmaceuticals, medical biotechnology and medical technology sectors together comprise around 4,500 firms, employing 165,000 staff, with an R&D spend of nearly £5bn and an annual turnover of over £50bn.’
‘We (i.e. Government) are committed to delivering global leadership in Life Sciences – we will re-energise the sector and provide the integration it needs to work effectively, the capability it needs to develop and grow, and the incentives to innovate and ultimately deliver better outcomes for healthcare and patients.’
Source: BIS (2011) Strategy for UK Life Sciences industry. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/32457/11-1429-strategy-for-uk-life- sciences.pdf
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2.29 A further UK-wide perspective on fields of interest and priority for innovation support can be obtained from a review of the TSB’s strategies and actions. In the biosciences, the TSB identifies particular opportunities for UK companies in three priority areas:
• Characterisation and discovery tools: (i) commercial application of sequencing technologies focusing on genomics; (ii) phenotyping technologies; (iii) integration of omics technologies and development of biological imaging systems, biosensors, probes/markers, diagnostic platforms
• Production and processing : (i) metabolic engineering; (ii) novel manufacturing processes for producing biological products and novel biological production systems; (iii) formulation and delivery approaches for biological products including biopharmaceuticals and functional foods
• Bioinformatics: approaches to organising, filtering and interpreting biological data including biological system, data visualisation, and user centred design.
2.30 The current TSB Delivery Plan (for 2013-14) refers to investments of up to £68m in a range of activities including the Cell Therapy Catapult and the Biomedical Catalyst, with a focus on: better disease detection, prevention and management; tailored treatments for disease and potential cures. It is committing £30m in support of enabling technologies, in the collaboration and cross-fertilisation of ideas between sectors such as robotics and autonomous systems, advanced materials, biosciences, electronics, sensors and photonics, and ICT. It is also providing up to £7m to special interest groups and an innovation and knowledge centre in synthetic biology, the latter to focus on areas of disruptive technology.
2.31 The TSB is investing in the health domain through the following activities:
• Assisted Living Innovation Platform : helping businesses to deliver products, systems and services to help people live independently for longer – how they want and where they want
• Stratified Medicine Innovation Platform : supporting companies to create cost- effective solutions for delivering the right treatment to the right patient at the right time
• Regenerative medicine and cell therapy programme: helping UK businesses take advantage of the next generation of treatments to deliver long-term relief or cures for diseases
• Biomedical Catalyst , in partnership with the MRC to cover challenges in a more holistic way, and support a more open approach to innovation which bridges between academic and commercial activities in therapeutic development, medical devices, diagnostics and e-health/m-health solutions.
2.32 The implication for stakeholders and management at Alderley Park is the need for alertness and agility in sensing and responding to major new opportunities to make the Park the location of choice for UK RTD infrastructure.
2.33 Earlier this year, support for the establishment of a new Catapult in the area of Diagnostics for Stratified Medicine (DfSM Catapult) was announced. Consultations on this closed in
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December 2013, with capability assessments for those areas interested in developing the Catapult scheduled to take place during 2014. At this stage, it is unclear as to what the property requirements for the facility would be, but the Cell Therapy Catapult, which was established in 2012, receives core funding of c£10m per annum and currently occupies c930 sq. m of laboratory and office space at Guy’s Hospital in central London.
2.34 In addition, the TSB has recently established a Special Interest Group in the area of ‘Formulation’, an enabling technology which is described as the creation of multi-component, often multi-phase products. It has relevance in markets such as: personal care; pharmaceuticals; and food. It involves a university and SME supply chain with activities in measurement equipment, modelling and simulation, high-throughput automation, surfactants, particle design, materials science and colloid science. There is reference by the TSB to ‘strong direct industry engagement’ with companies that include AstraZeneca, Pfizer, GSK, Bristol Myers-Squibb and many others.
2.35 The Special Interest Group has a ‘vision’ for a new national Formulation Centre:
‘An open-access innovation space for advanced formulated product design and manufacture comprising a central hub connecting to spokes of world class cross-sector expertise, technology and skills, and enabling companies to accelerate to market high value products and processes underpinned by a step-change in predictive design capability built on mechanistic understanding of complex formulated systems’.
2.36 This is an example of a ‘lead’, not yet a ‘prospect’ for Alderley Park. Thinking on this Formulation Centre is at a fairly advanced stage, but still merits closer investigation by the Task Force. The wider point for the future is the need for Alderley Park stakeholders to be alert to and engage at the earliest possible stage in discussions around investment in the national RTD infrastructure.
Implications for Alderley Park The Strategy for UK Life Sciences, and Technology Strategy Board’s initiatives, set a clear and defined agenda for developing the UK’s capacity and capability in the Life Science arena. With appropriate focus and targeting, there is a real opportunity for Alderley Park to align and link with these agendas, create some funding and operating mass, and thereby put the facility at the centre of the government’s thinking and plans for the sector’s development and growth.
2.37 Finally, a ‘roadmap’ for the development of UK capability in synthetic biology was published by the TSB in 2012 2. This defines Synthetic Biology as: ‘ the design and engineering of biologically based parts, novel devices and systems as well as the redesign of existing, natural biological systems. It has the potential to deliver important new applications and improve existing industrial processes – resulting in economic growth and job creation.’ In principle, the conduct and commercialisation of research in this area may benefit from access to the kind of ‘wet lab’ and associated facilities that are readily available at Alderley Park.
2 http://www.rcuk.ac.uk/documents/publications/SyntheticBiologyRoadmap.pdf
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2.38 Synthetic biology is regarded by the EPSRC 3 as a ‘nascent technology’ with applications in quite diverse end user markets; it is a ‘platform technology’. One of the key application areas identified in the roadmap is ‘medicines and healthcare’.
2.39 Among the recommendations in the ‘roadmap’ is investment in ‘ a network of multidisciplinary centres to establish an outstanding UK synthetic biology resource’ . Building on existing UK capability 4, the roadmap recommends that:
‘Sufficient resources should be deployed within the UK to ensure availability of research capacity and a full spectrum of essential facilities including sequencing and synthesis, CAD, and robotics commensurate with the needs of the innovation community.’
2.40 As part of a larger ‘Synthetic Biology for Growth Programme’, the BBSRC in collaboration with the EPSRC, launched a Call for Proposals earlier this year to establish up to six multi- disciplinary Synthetic Biology Research Centres over two years 5. Whilst this call is now closed, it is likely that chosen locations will be within university campuses; accordingly, immediate prospects for Alderley Park will depend on the bids that have been submitted. However, this is the ‘beginning’ in terms of national capability building and it may be an area of future potential for Alderley Park, specifically in supporting the commercialisation of research output through innovative SMEs.
Implications for Alderley Park A number of specific opportunities are flowing out of national policy for the Life Science sector, and it will be vital that stakeholders and management at Alderley Park are alert and agile in sensing and responding to these, in line with the intent to make the Park a location of choice for the UK’s RTD infrastructure for Life Sciences. The appropriate use of political influence will be helpful here.
Current opportunities to keep ‘in focus’ include:
• The Catapult in the area of Diagnostics for Stratified Medicine is a clear, present and highly relevant opportunity for Alderley Park, which its stakeholders (rightly) have moved swiftly to exploit. Progressing this bid should remain a key priority
• The intention of the TSB’s Formulation Special Interest Group to establish an open access innovation space for advanced formulated product design and manufacture
3 http://www.epsrc.ac.uk/research/ourportfolio/researchareas/Pages/synthbio.aspx 4 A new £10m Innovation and Knowledge Centre (IKC), ‘SynbiCITE’ based at Imperial College, has been funded by the Technology Strategy Board, the Engineering and Physical Sciences Research Council (EPSRC) and Biotechnology and Biological Sciences Research Council (BBSRC) with the aim of helping to turn academia and industry-based research into commercial success. 5 http://www.bbsrc.ac.uk/funding/opportunities/2013/synthetic-biology-research-centres.aspx
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• The opportunity that could present for Alderley Park flowing from the EPSRC’s call to establish up to six multi-disciplinary Synthetic Biology Research Centres over the next two years.
The National Health Service
2.41 The UK’s National Health Service is the largest integrated national health system in the world, playing a major role in the national and regional economies as a generator of value and jobs, and with a very significant and mature patient database.
2.42 Historically, the organisation has not been seen as a source of innovation, or a testing ground for innovative new products. Given, however, the ongoing budgetary challenges which it faces, the ageing national population, and the need to harness innovation to deliver effectiveness, the NHS has implemented a number of changes to its structure, including the development of industry-relevant networks and centres. Some of these are summarised below:
• Research Networks , such as the Medicines for Children Research Network, headquartered in Liverpool, and aimed at increasing the number of industry- sponsored clinical trials performed by the NHS
• Academic Health Science Centres , such as the one in Manchester (and the shadow equivalent in Liverpool, being driven by Liverpool Health Partners), aimed at bringing excellence in academic/clinical science to bear on the translational pathway. The Manchester Academic Health Science Centre (MAHSC) is one of only six formally accredited partnerships in England by the Department of Health and the only one outside the South East 6
• An increased focus on promoting the commercialisation of both innovation within the organisation, and also opening up the NHS’s infrastructure to support the testing and evaluation of new products. A key driver here is to secure improved and more cost-effective treatments of patients using NHS services.
Implications for Alderley Park The NHS is a significant, large, and multifaceted partner for any development at Alderley Park. To open-up optimally the translational pathway to businesses locating at Alderley Park, extensive linkages with the NHS and its key parts will need to be built, maintained and developed progressively. This will need sophisticated partnership and relationship management competencies on the part of any operator at Alderley Park.
6 Further details can be accessed via the Department of Health website: https://www.gov.uk/government/news/top-nhs- and-university-alliances-recognised-by-department-of-health
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The NHS is progressing a programme of initiatives to open up its infrastructures to new ideas, approaches, and innovations. Through its networks and influence, the Task Force can have a role in ‘paving the way’ for Alderley Park to start to access and capitalise on these.
Realising the benefits from the conducive policy context
2.43 As indicated above, there is a strongly supportive policy landscape in the UK and the EU for innovative developments in the Life Science space. This is backed by public funding for RTD projects and programmes, for development of RTD capability and infrastructure, and for networking and knowledge exchange. Publicly-backed interventions acknowledge the requirement and challenge of supporting SMEs within the innovation ‘system’; arguably this is now more relevant than ever given the shift in ‘big Pharma’ business models within the drug discovery and development value chain; this shift is towards ‘open innovation’ in general and towards partnering in the co-development of diagnostics and therapies in particular. The issue then is how to ensure SMEs benefit in practice. This is explored in more detail below in terms of the levers and tools that could be available to Alderley Park’s management team.
2.44 For young, growth-oriented SMEs, access to the funding provided from publicly-backed support schemes can be associated with significant, and daunting, ‘opportunity costs’ – especially first-time access. Many of the schemes, notably in Europe, require collaboration, something that can be difficult to engineer on an as-needed, just-in-time basis. Preparatory networking is far from cost free. As a source of differentiation, the ‘offer’ to new tenants in the context of Alderley Park could include not only access to affordable, high quality facilities – arguably the basic requirement of the employment space offer – but also a supportive environment which: (a) facilitates strategic networking (within the research-base, industry, and potentially other Science Park facilities); (b) ‘flags up’ relevant opportunities; (c) can assist with critical opportunity appraisal; (d) can support proposal development; and (e) can, if required, share the burden of collaborative project administration.
2.45 Of course, the provision of this and other candidate ‘differentiators’ referred to below are not cost-free, a factor which should not be overlooked. This said, costs can frequently be recouped from successfully realised bids.
Attracting investment in new RTD capability
2.46 The opportunities presented by publicly-backed investments in RTD infrastructure bring particular challenges for Alderley Park with its present status. The proposed Diagnostics for Stratified Medicine Catapult is a case in point. The ‘offer’ to host the Catapult can of course be based on the ready availability of appropriate, specialist accommodation at Alderley Park. This is, in essence, a proposition which emphasises a cost-saving opportunity. The relative importance of other locational factors are more problematic when the decisions made for other Catapults are considered: these include ones with multiple sites; strong links to one or more universities, but not necessarily located on, or adjacent to, a campus; and with little or no pattern in terms of co-location with major company stakeholders/funders. For Alderley Park, in addition to offering cost savings, another factor in building the case for attracting
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investment in RTD capability could be co-location with a community on the Park which is dominated by SMEs in cognate Human Health Science sub-sector(s).
2.47 A Catapult has the potential for national reach towards major companies in the value chain wherever it is located. At Alderley Park, one differentiator may be the additional, spill-over benefits to be gained from co-location with innovative SMEs with growth ambitions.
Operating in an inter and national investment market
2.48 The scale of spending on healthcare is set on an upward trajectory as a percentage of GDP in the UK and across the OECD, whilst it is also expected to grow in a number of emerging economies. International market opportunities for the pharmaceutical industry are broadening beyond Europe and North America, especially with the growth of Asian markets. In the OECD, the advances in regenerative medicine and in the development of biomarkers to aid closer targeting of therapies provide important high value opportunities. Whilst the balance in demand for drug therapies in the Asian markets between ‘generic’ products, application of existing branded therapies, potential for new ‘blockbusters’ for Asian populations and new, niche therapies remains to be resolved, investments in innovation for Asian markets is now substantial.
2.49 However, for ambitious growth companies in Asian economies, investment in the UK offers a number of attractive features, for example: an open and flexible regulatory system; excellence in pre-clinical research; knowledge and experience within the research base and industry in translational research; access to the NHS, the largest national healthcare system in the world, and its unrivalled databases of patient records; from a UK base, opportunities to tap into and learn from existing and upcoming major programmes of RTD in the UK and Europe; and access to stable, high value Europe-wide markets.
2.50 As a potential differentiator, the ‘offer’ to international investors in the context of Alderley Park should include not only ready access to high quality facilities, to a skilled workforce and a conducive regulatory and fiscal environment – arguably the basic requirements for all Foreign Direct Investment (FDI) – but also a ‘soft infrastructure’ that will facilitate rapid, effective and sustainable ‘connectedness’ to key parts of the innovation ‘ecosystem’ in the UK and Europe.
Powering innovation
2.51 The supportive policy context and the availability of publicly-backed initiatives in support of RTD, innovation and enhanced national capability are all important factors in the ‘landscape’ and should provide reassurance on industry prospects to potential investors in Alderley Park. The previous discussion has highlighted candidate actions that might be taken to ensure that tenant companies gain optimal business benefit – important, on the basis that what is good for tenant businesses is good for investors in Alderley Park.
2.52 However, there are of course other factors of relevance to ‘powering innovation’ and business growth. One of these is access to risk finance. This can be especially important for growth- oriented firms seeking to develop and commercially exploit intangible assets (intellectual capital and property) which have high potential value but which typically are also associated with considerable uncertainty in terms of efficacy and time to market.
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Data from the British Venture Capital Association reveal that the total number of biotech and pharma companies in receipt of venture capital finance (aggregated figures for seed through to late stage venture funding using BVCA definitions) was 48 in 2012. In the NW, the number of firms across the healthcare sector (including pharma) receiving VC funding from BVCA members was 16.
Source: BVCA (2013) Private Equity and Venture Capital Report on Investment Activity 2012. See: http://www.bvca.co.uk/Portals/0/library/Files/News/2013/RIA_2012.pdf
The recent report into Life Science start-ups in the UK by Mobius Life Science and BioCity 7 indicates that during the period 2006-11 c.26 new firms are recorded to the North West. Another c.30 firms started in the NE and Yorkshire & Humberside during the same period. These start-ups include firms in ‘med tech’, ‘bio/pharma’ and ‘specialist services’. In reporting these data, the report’s authors (rightly) state that: ‘Whilst we shouldn’t place too much emphasis on the absolute number of companies, indeed more is not necessarily better, these businesses do form the next generation of the industry and the level of activity can be an indicator of the overall health of the sector’. In terms of investment by sub-sectors, the increase during 2007- 2011 in investment in what the authors term the ‘non small molecule’ sub- sector is notable, in contrast to the relative stability of investment in the ‘small molecule therapeutics’ sub-sector.
The Mobius/BioCity report shows that in absolute terms the North of England lags in terms of investment raised by Life Science start-ups behind the South East, of England, East of England, London and Scotland.
Source: Anon (2013) Realignment: UK Life Science Start-up report 2012. Report by Mobius Life Sciences and BioCity. See: http://www.mobiuslifesciences.com/report
2.53 A differentiator for Alderley Park could include providing better access to support for the community of tenant companies than is available at competitor locations: (i) to raise the profile of investment opportunities they offer with potential investors, regionally and nationally; (ii) to access high quality investment readiness support – helping to develop and sustain a high quality deal flow; and (iii) to provide opportunities to engage with and pitch to potential investors.
2.54 More generally, this highlights the relevance of attracting a mix of companies to the Park, including professional service providers and companies dedicated to commercialisation, as well as ‘mainstay’ bioscience product companies.
The Life Sciences sector in the UK and the North of England 8 . . . & implications
2.55 The immediately preceding section has set the scene in terms of the UK and European policy context. This has focused on the top-down push that policy will give to the development of
7 For example, biotech companies whose business model is focused on developing preclinical drug development programmes (based on intellectual property from various sources - universities, research institutes, industry or internal sources) to a ‘commercialisation readiness’ position at which they can be licensed to large pharma/biotech companies, or spun out as standalone companies. 8 The material and data in this Section draw heavily on the recent work by Bionow for the Cheshire/Warrington, Greater Manchester, and Liverpool Local Enterprise partnerships. Bionow are working as SQW’s collaborators on the AstraZeneca dis-investment studies.
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the Life Science sector into the future, and how, in response, Alderley Park might seek to exploit and leverage this.
2.56 As a counterpoint to this, the material that follows describes the ‘here and now’ nature of the existing Life Science sector in the UK, the North of England, and the North West, and what this might mean for Alderley Park in terms of its positioning. Again, ‘Implications for Alderley Park’ boxes are offered throughout, to highlight the key messages to the reader.
The UK
2.57 The UK has one of the most significant and productive biomedical/Life Science industries in the world, contributing to patient well-being, improving the sustainability of the economy and supporting growth. The industry is high-tech, innovative and highly diverse, spanning pharmaceuticals, and biotechnology, through to analytics, diagnostics, and contract research, and on to contract manufacturing, medical devices and healthcare. These are supported by a specialist support chain of wider technology, materials, and supply companies. At the end of 2012, the UK sector as a whole comprised 4,500 companies, employing approximately 166,000 people, and generating a turnover of £50 billion nationwide.
2.58 The sector in the UK can be structured around four broad sub-domains:
• Medical Technologies 9: The medical technology sector has exhibited continuous growth throughout the global financial crisis. Trend data show a 1% increase in turnover and 4% increase in employment between 2011 and 2012 and total company numbers have decreased by 6%; there were eight new companies formed, and 189 company closures (due mainly to mergers or acquisitions). However, between 2009 and 2012 the sector exhibited an increase in company numbers, a 36% increase in employment, and a 50% increase in turnover. The overwhelming majority of medical technology companies are SMEs, with 99% of firms in the sector employing fewer than 250 people.
• Trend data for this sector shows that the cardiovascular, neurology and radiotherapy segments exhibited the highest increases in turnover in 2012. This said, the number of companies in most segments decreased in 2012, with those providing medical imaging, anaesthetic and respiratory and infection, radiotherapy equipment, ICT and e-health, in vitro diagnostic technology and implantable devices experiencing the greatest falls.
Table 2-3: Top 3 industry segments in the Medical Technology Sector By number of By turnover By employment companies Radiotherapy Equipment Professional Services Professional Services
Neurology Single Use Technology Assistive Technology
9 For the purpose of this report, the BIS definition of Medical Technology companies is used, which includes the medical technology and diagnostics sector, and are those companies whose major business activity involves the development, manufacture, or distribution of medical devices as defined by European Union Medical Devices Directive (93/42/ECC) and companies who have significant activity, defined as more than 10% of their turnover, in supplying specialist services to the medical technology sector (i.e. the specialist supply chain).
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By number of By turnover By employment companies In Vitro Diagnostics Cardiovascular Devices Single Use Technology Source: Bionow, 2013 and BIS 2012
• Medical Biotechnology 10 : In 2012, the UK Medical Biotechnology sector comprised 980 companies, and employed close to 26,000 individuals generating a turnover of £3.7bn. Between 2011 and 2012, trend data show an increase of 5% in turnover and a small (0.3%) increase in employment. There was also a small overall fall in company numbers of 4%; three new companies were formed, and 48 ceased trading between 2011 and 2012. The sector is dominated by SMEs, with 98% of all companies employing less than 250 staff, indeed, 53% of companies in this sector have less than five employees. There is a healthy mix of young and older companies and a large percentage of companies (49%) are over 10 years old.
• The sub-domain sector includes a large segment of 636 specialist services companies employing over 6,410 people with a turnover of over £2bn – this equates to more than 50% of the total sector turnover. Within this segment, specialist consultants continue to be the largest segment, while specialist suppliers are next largest. The medical biotechnology segments of advanced therapeutics, small molecules, and specialist services have all exhibited increased turnover in 2012 compared to 2011. The specialist services segment has also seen an increase in staff numbers but, more widely, employment has decreased in most segments by between 2% and 30%. The number of companies in all the parts of this sector fell in 2012, with the exception of blood and tissue products, which remained the same.
Table 2-4: Top 3 industry segments in the Medical Biotechnology Sector By number of By turnover By employment companies Small Molecules Specialist Services Specialist Services
In Vitro Diagnostics Small Molecules Small Molecules
Antibodies Antibodies Therapeutic Proteins Source: Bionow, 2013 and BIS 2012
• Industrial Biotechnology : The Industrial Biotechnology sector is comprised of over 80 companies, which employ just short of 1,600 people and generate a turnover of £438m. These are companies whose principal activity is the development, manufacture and selling of products and services that use or contain biological material as catalysts or feedstock to make industrial products. Companies that use industrial biotechnology to make products or provide services which do not constitute a major proportion of their total turnover are not captured in BIS' data, which this report has accessed. This sector, therefore, contributes to a wider economic activity than that of the core 80 or so companies. Some studies have indicated that industrial biotechnology has the potential to make a significant impact to the sustainability strategies of industries such as Chemicals, Waste Treatment,
10 Based on BIS’ definition Medical Biotechnology Companies comprises those a) discovering or developing new therapeutics that achieve their principal action in or on the human body by pharmacological, immunological or metabolic means OR b) which offer specialised sector specific services; and drug companies with an annual turnover of less than $1bn
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Energy Production and Plastics which have a combined turnover of £81bn, and employ 800,000 people.
• Based on a sample of companies, there was a positive growth trend in the sector between 2011 and 2012, with 21% and 15% increases, respectively, in employment and turnover. Companies involved in biofuels, specialist services (contract suppliers, engineering, and consultancy) and fine and speciality chemicals have shown consistent growth over the last four years and remain the largest segments in the sector. The sector is dominated by SMEs with fewer than 250 employees, and 88% of companies are more than 4 years old.
• Pharmaceuticals 11 : The UK Pharmaceutical Sector comprises about 400 companies. The sector is a major contributor to the UK economy, with a combined turnover of £30bn and employment of just below 70,000 people. It spends close to £5bn per annum on R&D and makes an important contribution to the UK's trade balance. Based on a sample of companies, the sector has seen an overall decrease in turnover and employment of 5.4% and 9.7%, respectively, between 2011 and 2012. These decreases have been concentrated in the top 20 global research-based pharmaceutical companies with presence in the UK, and reflect the global restructuring and financial challenges facing the sector. Collectively, these global companies have shown a fall of nearly 7% in annual turnover, and employment is now nearly some 5,000 people fewer.
• The development of small molecules is the largest pharmaceutical segment followed by specialist suppliers to the sector and therapeutic protein development.
Implications for Alderley Park The key segments of the UK’s Life Sciences sector are Small Molecules, Diagnostics (IVD), Specialist Services and Supplies, Antibodies, and Proteins.
These competencies fit well with the anticipated drug discovery and development capabilities encapsulated in the proposed Human Health Science focus at Alderley Park. As such, they should be seen as key market targets for the facility and its offer.
In the North and North West of England
2.59 The North of England (the North West, Yorkshire and the Humber, and the North East) represents between 21% and 23% of the UK biomedical/Life Science sector in terms of numbers of companies, employment, and turnover. The sector in the North of England generated £11bn in turnover in 2012 and has seen significant volume growth, in particular in the North West (where more detailed analysis and monitoring over a 10 year period is available), with company numbers increasing by 86% over the period 2002 to 2012, and with
11 BIS’ definition of Pharmaceutical Companies is used here i.e. companies with annual turnovers greater than $1bn who are either research-based companies producing drugs using a range of technologies, companies producing generic pharmaceuticals, providing clinical research, or contract manufacturing organisations.
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growth evidenced in each of these years. In the same studies, employment has been shown to increase by an average of 10% per annum in the North West region.
2.60 Using BIS’ national database figures, a more detailed decomposition of the split of companies active in 2012 across the North West, North East and Yorkshire and Humber is presented below, together with employee numbers and turnover. The data are presented for the resolved domains as above i.e. Medical Technology, Medical Biotechnology, and Pharmaceuticals; given the relatively low numbers of companies in the Industrial Biotechnology domain, these are not included in this analysis. Numbers in parentheses show the percentage of the UK total.
Table 2-5: Company numbers and percentages of UK total (%), 2012 Area Med Tech Med Bio Pharma Total North West 278 (9%) 83 (8%) 41 (11%) 402 (9%)
North East 87 (3%) 42 (4%) 13 (3%) 142 (3%)
Yorkshire & 303 (10%) 60 (6%) 18 (5%) 381 (8%) Humber
North 668 (21%) 185 (19%) 72 (19%) 925 (21%)
UK 3,129 979 387 4,495 Source: Bionow, 2013
Table 2-6: Employee numbers and percentages of UK total (%), 2012 Area Med Tech Med Bio Pharma Total North West 6,480 (9%) 2,812 (11%) 10,213 (15%) 19,505 (12%)
North East 2,225 (3%) 1,509 (6%) 2,608 (4%) 6,342 (4%)
Yorkshire & 8,175 (11%) 1,110 (4%) 2,882 (4%) 12,167 (7%) Humber
North 16,880 (24%) 5,431 (21%) 15,703 (23%) 38,014 (23%)
UK 71,144 25,662 6,9284 166,090 Source: Bionow, 2013
Table 2-7: Turnover and percentage of UK total (%), 2012 Area Med Tech Med Bio Pharma Total North West 2,133,508 (13%) 369,205 (10%) 4,171,508 (14%) 6,674,221 (13%)
North East 538,176 (3%) 173,108 (5%) 279,508 (1%) 990,792 (2%)
Yorkshire & 1,951,960 (12%) 139,868 (4%) 1,143,475 (4%) 3,235,303 (7%) Humber
North 4,623,644 (29%) 682,181 (18%) 5,594,491 (19%) 10,900,316 (22%)
UK 16,031,574 3,735,147 30,045,591 49,812,312 Source: Bionow, 2013
2.61 Specialisms vary across the North, but there are particular areas of strength in Industrial Biotechnology, Biologics (antibodies, therapeutic proteins, and vaccines), Small Molecule Therapeutics, Wound Care, Orthopaedics, and Specialist Services. Given the importance of the Specialist Services sector there is a real opportunity to develop further this important supply chain sector. The North represents around 20% of all of the companies, employment and
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turnover in biomedical/Life Science sector the UK, but the contribution of the region is greater than this because of its distinctive strengths in key areas. For example, production and exports of Medicinal and Pharmaceutical Products demonstrate the economic importance of the North and its contribution to the wider UK.
2.62 More specifically, the sector in the North encompasses companies operating across diverse areas, including:
• Pharmaceuticals – AstraZeneca, Bristol Myers Squibb, Eli Lilly, GSK, Novartis, Medimmune, Redx Pharma, Watson and Teva
• Biotechnology – Ai2, Conformetrix, Evgen, Epistem, F2G, and Intercytex
• Analytics - Intertek, Kratos, LGC, Life Technologies, Shimadzu, Thermo Scientific, and Waters Corporation
• Diagnostics – Biofortuna, Forsite, Gen-Probe, Immunodiagnostic Systems, and Qiagen
• Contract Research – Covance, Cyprotex, Euprotec, ICON Development Solutions, Peakdale Molecular, Piramel Healthcare, and Shasun Pharma
• Contract Manufacturing – Cobra Biomanufacturing, Eden Biodesign, Fujifilm Diosynth, Recipharm, and SCM Pharma
• Medical Devices – DePuy, Microvisk, and Phagenesis
• Healthcare – Advanced Medical Solutions, Byotrol, ConvaTec, Procter & Gamble, and Unilever
• Plus, a wide range of specialist support and supplier companies.
2.63 The sector is further characterised by its significant interaction with and reliance upon the basic and clinical research base (HEIs and the NHS), its relatively high-risk nature, specialist skills requirements and its venture capital requirements. Additionally, and lately, larger companies are now outsourcing typically more, and relying to ever-greater extents on smaller companies for new technology and innovation. This means that the whole ecosystem, and accessible geography, become critically important to the growth of all businesses, and present an important opportunity to foster and support this growth.
2.64 International companies producing products such as laboratory supplies and bio-analytical equipment, or those providing specialist contract services, have to date chosen to locate and inwardly invest in the North in preference to other locations, and use the strong local market and skill base to build a European presence. Recent examples include ICON Development Solutions, as well as Fujifilm Diosynth, Gen-Probe, Medimmune, Qiagen, Recipharm, and Waters.
2.65 The development of successful SMEs has been central to the success and growth of the biomedical sector in the North over recent years. To a large extent, the opportunities for these businesses have been due to larger companies seeking to de-risk key aspects of their work by outsourcing and collaborative working (Open Innovation) which has created new business opportunities and markets for smaller companies. In addition, the sector benefits from a
28 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report unique combination of university-led development of early stage businesses intrinsically linked to medium and large sized commercial operations. This mutually beneficial relationship focuses on utilising skills and knowledge embedded in universities, to leverage technological development in the smaller companies ultimately realised in commercial success, through relationships with the larger multinationals.
Implications for Alderley Park The rich and diverse nature of the Life Science sector in the North of England ranges from discovery through to bio-manufacture, and the region has a well- connected business/HEI/NHS community. Both the sector and wider communities represent major opportunities for Alderley Park.
A key challenge for Alderley Park will be to integrate with established sector networks, both in the region and at the level of the North, and doing this without overly competing, or being perceived as competing, in terms of what actors within these networks are already providing.
A collaborative fit between the business/HEI/NHS community, the existing network of science parks in the North of England, and the increased impetus and mass which Alderley Park offers, could feed through to greater growth in the round.
29 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report 3. Thinking & Planning for Demand
3.1 Whilst AstraZeneca’s decision to disinvest at Alderley Park is, without doubt, significant for the region and the wider North of England, it is but one further example of the general process of formation and destruction in a competitive modern economy responding to technology and market change. As a recent report published by BIS on the occurrence and handling of economic shocks sets out 12 , in the long-run, rises, falls, and shifts in sectors, models, and specialisms are an ever-present feature of the national economic story.
3.2 Whilst, therefore, there are clear specifics and idiosyncrasies in the current case of Alderley Park, there is a very extensive wider literature and body of learning that can be reviewed gainfully when thinking and planning for demand. This section attempts to do this at two levels:
• first, drawing on the BIS research report, it offers some general lessons and approaches on how to go about responding to shocks in economies, and what this might mean for the wider tactical approach within which demand needs to be considered
• second, it provides a synthesis of the specific experience of redeploying science– facing facilities from large single-operator models and on to repurposed multiuse facilities, typically with a strong SME focus. As such, it provides some helpful lessons on those things that, ex-post, appear to have been important in ensuring demand success.
Some general lessons on responding to economic shocks
3.3 The BIS report provides a detailed review of the academic and evaluation literature, at home and abroad, overlaid with expert practitioner commentary on the key lessons in responding to economic shocks effectively. Four overarching lessons are offered for application:
• Understanding the significance and influence-ability of the issues. The significance of the scale of a shock, and the ability to influence the underlying issues which have given rise to it are important drivers of whether a response to a shock is viable and likely to have the desired effect. The report recognises these two issues are often not natural bedfellows, especially in the context of economic restructuring.
• The importance of good intelligence. Data that can be used intelligently can inform effective diagnosis of the issues, and the targeting of response action. This can be as detailed as being able to identify the individual suppliers within supply chains. The report highlights that a key building block of good intelligence can be a history of engagement with the business(es) concerned. This can help to foresee shocks, and bring about mitigating actions (the report references Birmingham City Council’s
12 https://www.gov.uk/government/publications/economic-shocks-research , ‘Economic shocks research: a report to the Department for Business, Innovation and Skills’, 2013
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extensive history of engagement with LDV, which resulted in actions around training and supply chains well in advance of eventual closure).
• Ensuring an appropriate mix of intervention responses. Generally, the more effective and rounded responses seek to address all of the issues that have given rise to the shock, even if this is over the longer-term in instances where wider restructuring and/or resilience need to be an objective.
• Structures, processes and people. The report highlights that successful solutions to shocks are highly correlated with appropriate individuals and models with clear responsibilities being in place to lead the response, lines of reporting and governance, short and long term horizons for action, all this being appropriately led in spatial terms (e.g. local shocks led locally, given the embedded knowledge and understanding that this provides). Strong leadership and proactive individuals can mean that things happen quickly (as was the case with MG Rover, and its Task Force).
• Resource and capacity. In previous times, with formal regional development structures in place, discretionary resource could be leveraged quickly and at scale. This meant that actions in response to shocks could be set-up that were bespoke to particular issues. The report recommends that, in the current context, with less discretionary resource, it is vitally important to draw on and assemble existing programmes, such as the support through the Manufacturing Advisory Service, Growth Accelerator, UKTI, and R&D grants, and opportunities through initiatives like the Regional Growth Fund (the case of Pfizer at Sandwich is offered as an interesting example of how County Council, Regional Growth Fund (RGF), UKTI and private sector monies were assembled cleverly to provide an integrated package of support to repurpose the site and support the growth of SMEs. Sandwich is reviewed in more detail below).
A Practical Framework . . .
3.4 Drawing on case study material, and the identified key determinants of shock responses, the BIS report proposes a simple four-stage framework process in responding to shocks, designed as a helpful iterative sequence. This is set out in Figure 3-1 with component stages as follows:
• 1. Diagnosis of the shock: gathering intelligence by drawing on existing and new data relating to the shock, to inform thinking on whether interventions are needed at the level of the direct business(es), supply chains, the workforce, and place/communities, and the wider ecosystem in which the shock is occurring – including the market and other failure arguments that underpin this (the parallel work commissioned by the Alderley Park Task Force in respect of the Economic Impact Assessment of disinvestment at Alderley Park is a helpful and relevant contribution in this context).
• 2. Reviewing appropriate response functions and forms:
‹ 2a. Functions – consider (i) signposting to appropriate mainstream services in order to address relevant needs identified under Stage 1, (ii) whether other existing initiatives could be leveraged, and then (iii) whether there are still unmet needs that could be addressed through bespoke provision. The
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framework draws on the evidence base to ensure that this stage assesses the possible risks, costs, and benefits of actions.
‹ 2b. Forms – consider existing partnership arrangements and joint agency- working, the spatial level of the issues, the nature of issues in play, and whether there is an existing strategic framework, or indeed if one needs to be initiated, within which the response and its implications might sit.
• 3. Development of appropriate packages for the short-term and long-term: recognising the purposes and imperatives of the timelines for action, and based on the previous stages, planning (and, if appropriate, strategy development) is progressed.
• 4. Implementation of actions – there are two further considerations here, running alongside implementation:
‹ 4a. the refinement of packages/actions, and for both the public and private sectors to be clear when exit should occur and how this will be managed
‹ 4b. on-going monitoring and evaluation of performance – that is, putting in place a formal process for tracking, monitoring, and in due course evaluating what has been done to address the shock (the report contains some thoughts on how BIS (and partners) might think about more robust assessments of the counterfactual).
Figure 3-1: A framework for responding to economic shocks
Source: SQW Ltd and Coventry University Business School, drawing on Pike (2005) and Chapain et al (2011)
3.5 It is important to note that the BIS research is positioned very much from the point of view of anticipating, and planning for, shocks. This said, the Stages in Figure 3-1 on Reviewing Functions and Forms, Developing Appropriate Packages, and Directing and Managing Implication have particular relevance to responding to shocks once they have occurred. As
32 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
such, the material does have some relevance to the context within which the Alderley Park Executive Group and Task Force are now working.
Implications for Alderley Park Previous research for BIS on national and international experience in responding to economic shocks may have application to Alderley Park, as the processes of site sale, repurposing, and redevelopment start to take shape.
Of the four stage framework that is offered to BIS in the research, three are likely to be particularly appropriate at this stage in the disinvestment process at Alderley Park:
• Reviewing the functions and forms through which responses to an Alderley Park shock are developed and progressed (Stage 2 of the BIS Framework)
• Developing appropriate packages for the short and long term (Stage 3). The form and nature of these packages need to be informed by this Demand Assessment, and once implemented, the packages will, themselves, potentially shape demand
• Planning for implementation, with a focus on refining those packages and actions to go forward with, and ensuring a monitoring and evaluation framework (which addresses the counterfactual i.e. what would have happened anyway) is in place by which progress and success can be assessed objectively.
Specific lessons on replacing or repurposing large science facilities/operations and developing successful bioscience clusters
3.6 The paragraphs above have offered thoughts on responding to shocks, such as the disinvestment at Alderley Park, in a general sense. In the material that follows, a more specific view is taken on the key lessons emerging from replacing, or repurposing, large science facilities or operations, and the development of successful bioscience clusters, elsewhere in the UK and internationally. For conciseness, this material is offered in summary in this section – a fuller exposition is presented in Annex C.
3.7 The material is drawn by case study review of the following developments and wider clusters:
• The Stevenage Biocatalyst, developed on land owned by GSK next to their R&D facility in Hertfordshire
• Discovery Park in Sandwich, developed on Pfizer’s R&D site in East Kent
• BioCity Scotland developed on MSD’s R&D site in Newhouse/Lanarkshire
• Cambridge Biomedical Campus, associated with Addenbrooke’s Hospital
33 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
• Granta Park in Cambridge
• The Edinburgh BioQuarter
• Biopolis and one-north, Singapore
• Boston, Massachusetts.
Lesson 1: Secure high level commitment at strategic and operational levels
3.8 It is imperative for the corporate sponsor of a Life Science initiative to be committed fully to the development of the scheme and to support it at strategic and operational levels. This requirement was essential for the development of the Stevenage Biocatalyst initiated by GSK, as well as for the implementation of Discovery Park following Pfizer’s relocation decision, and the development of BioCity Scotland.
3.9 In the case of the Stevenage Biocatalyst, the development of the scheme came about for two main reasons: there was unused land available for development adjacent to GSK’s R&D centre in Stevenage ; and an appreciation that modern drug discovery and development relies on a climate of openness and exchange, as previously discussed, and often called open innovation. GSK’s decision to share the Stevenage complex was taken at the highest level within the company and once it had been reached, it was implemented with great focus and urgency. This meant that senior executives within GSK (at the level of Senior Vice President) were charged with implementation and were given sufficient resources to engage outside specialists and to commit significant capital and operational funding . From the outset, it was made clear externally that GSK meant serious business and given the significance of the company within the UK R&D landscape, this exerted very strong leverage to draw in other bodies in support of the plans.
3.10 The Chief Executive of the Stevenage Biocatalyst sums the necessary ingredients up as ‘ people, appetite and culture ’. The support from people within the company needs to come at the highest level and be expressed in the strongest terms; there needs to be an appetite for risk and change within the sponsoring organisation and its wider partners; and the culture of the development has to be within the spirit of open innovation, drawing in support from all stakeholders and partners. Crucially, at Stevenage, GSK (i) has retained a significant amount of core R&D activity on site, which has ensured important kit has remained staffed-up and operative and (ii) is able to act as an R&D ‘Older Brother’ to those SMEs who frequently need help and guidance on tackling their own R&D. Consistently, this combination of functional kit, with access to wider R&D heads is seen as being very powerful.
3.11 In the case of Pfizer and Sandwich, the motivation for Pfizer’s gradual withdrawal also came from the changing nature of R&D and the move away from expensive bricks and mortar-based research to an open innovation environment. Unlike GSK and its location, Pfizer did not feel it could achieve this objective in East Kent and the scenario to deal with the site was different from the Stevenage situation (and probably more comparable to Alderley Park). Having explored the feasibility of developing an open innovation science park in Sandwich two years previously, and having concluded that the effort in terms of senior time and resources would be too high, the company pursued the alternative route of selling the site to a commercial developer. However, being aware of its corporate social responsibility to the area, and in
34 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
conjunction with key stakeholders in East Kent (including the South East Local Enterprise Partnership), Pfizer supported the proposal for the site to get Enterprise Zone status .
3.12 Despite the relocation to other parts of the country, Pfizer is maintaining a workforce of around 650 people on Discovery Park, leasing back around 23,000 sq. m of office and laboratory space . This ongoing involvement is helpful in many ways. It provides a revenue stream to the development company, Discovery Park Limited. It also shows on-going commitment to the site, boosting morale and profile, and it helps those Pfizer employees who are not keen to relocate elsewhere, to maintain quality employment.
3.13 In the case of BioCity Scotland, MSD gifted the site to be developed into a Life Science hub. Over and above the property offer, access to equipment and compound production facilities are an important advantage for companies locating to the site. Facilities include high- throughput screening, nuclear magnetic resonance machines, mass spectrometers, high- performance liquid chromatography, electrophysiology and cell culture suites, centrifuges and freezers. Also part of the package are a ‘world leading’ compound management system and a library of 100,000 compounds.
Implications for Alderley Park The Alderley Park Task Force should use to the greatest extent its profile, influence and networks to mobilise the highest level senior executive commitment (from across the public and private sectors) to achieving the long-term transformation of the Alderley Park site.
Lesson 2: Be ambitious, but reflect commercial realities
3.14 All of the developments and clusters which have been assessed for this review are characterised by their own sets of specific circumstances. The vision to go forward with a science park development at Alderley Park needs to reflect local circumstances . The plan must be ambitious and stretching, but at the same time, it must be realistic and deliverable.
3.15 For example, the vision for the Stevenage Biocatalyst builds on the project’s location within the Golden Triangle of bioscience activities in England, close to London and Cambridge. It can afford to be focussed on attracting research intensive businesses and organisations that want to operate in a highly research intensive environment. In contrast, Discovery Park in East Kent is located in a more remote part of the country and its vision reflects the particular advantages of operating in a lower cost environment. Moreover, the cost advantages have been enhanced by the project’s Enterprise Zone status which is attractive for tenants and the developers. BioCity Scotland builds on its location close to Glasgow and Edinburgh and access to a wide range of equipment and processing facilities . It is also managed by an experienced provider of specialist support services which can effectively draw on expertise and networks.
3.16 The Cambridge Biomedical Campus allows companies and other organisations to tap into a wealth of expertise within the teaching hospital, the University of Cambridge, other research institutions and the companies that make up the Cambridge cluster. This means that the
35 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
campus is trying to attract tenants for whom this exchange will be essential and who are in a position to pay a premium for this access.
3.17 For states and/or countries which are prepared to engineer a complete transformation of their economic fabric, the vision can be highly ambitious . The Edinburgh BioQuarter is a major investment initiative designed to transform the life sciences sector in Edinburgh and Scotland and involves funding estimated at around £600 million. Singapore, with its extremely planned economy, set out to create a knowledge economy in the late 1990s and endowed the Biopolis project with a mixture of generous capital provision and full government support. Boston/Massachusetts supported the transformation from a manufacturing economy to a knowledge economy by a concerted effort to grow a bioscience cluster and was in a position to resource the strategy generously.
Implications for Alderley Park The vision for the development of Alderley Park must be an achievable and sustainable one. The scheme must reflect the commercial realities of the local context (both strengths and weaknesses), not simply seek to replicate what has been achieved elsewhere, and be honest about what it has to work with.
Lesson 3: Commit to effective partnership working
3.18 Large scale site developments, as well as cluster initiatives, require a seamless operation between the private and the public sector , with each partner contributing what they know and do best without duplication and avoiding tensions. Such large schemes, by their very nature, are often partnership-led initiatives, with different stakeholders being required to come to a shared understanding of what needs doing, what funding is required, and who does and contributes what.
3.19 In the case of Alderley Park, much of the responsibility for developing the vision, overcoming funding challenges, and promoting the site will fall ultimately on the shoulders of the new owner. However, if the facility is to successfully establish links to and support the development of the wider Life Science cluster across the North West and the wider UK, the strength and effectiveness of the broader partnership will be crucial.
3.20 There are many examples from across the UK where progress in developing large science or research parks has been limited, due, in part, to the complexity of management (not necessarily ownership) and wider partnership arrangements. For example, at Norwich Research Park, whilst the diversity of the stakeholders involved (the University of East Anglia, various research institutes such as the Genome Analysis Centre, the Sainsbury Laboratory, the John Innes Centre, and the Institute of Food Research, local authorities, incubators and an NHS Hospital Trust) is a key strength of the scheme, it provided a very real delivery challenge in terms of securing agreement on a long-term vision. In recent years, the situation has improved with the adoption of a revised management structure, as well as significant investment from the BBSRC, but this has taken significant time.
3.21 In the case of the Stevenage Biocatalyst, once GSK had decided to develop the open innovation campus , it sought to attract public sector sponsors at regional and national levels
36 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
to support the development. The development was positioned as a scheme of national importance. At Discovery Park in East Kent, it was important that the site be given Enterprise Zone status, which helped it to attract occupiers.
3.22 Singapore is the strongest example of a government targeting particular sectors with an extended and comprehensive package of internationally competitive incentives and facilities . The country has the advantage over the other case study clusters of being a city state, where central and local government interests are one and the same. Similarly, in Massachusetts in the US, the State Government has played an important role in plugging gaps in the support infrastructure, including risk capital and targeted international marketing.
Implications for Alderley Park Alderley Park is part of the wider ecosystem for Life Sciences in the North of England, and it needs to play its role fully and effectively in this. As with all successful partnerships, it needs to define, articulate, and then stick by its role and responsibilities within this totality, ensuring that it delivers added value to that activity which is already underway. Simple duplication at Alderley Park of existing activity elsewhere, whilst appearing to be successful in gross terms, runs the risk of not bringing net benefits to the system overall, with the serious consequence of frustration and resentment elsewhere in the system. This needs be guarded against carefully.
Lesson 4: Ensure wider cluster integration
3.23 In line with an open innovation culture, which most science park facilities are trying now to achieve within their developments, it is also essential to maintain an open innovation approach with businesses and organisations located outside the park. This is essential in order to ensure that businesses within the development are getting benefits from their location and it also helps with the marketing of space and services.
3.24 Most firms are attracted and retained by the totality of the cluster , not the size or profile of individual developments that sit within it. The key advantages of a large cluster include access to a significant specialist labour market, the potential for interaction with, and use of, specialist facilities (including, but not restricted to, teaching hospitals and related research), access to funding sources which understand the needs of biomedical firms, and a good supply and mix of premises at different prices for different types of activity. The value of choice in the type and cost of specialist property is that firms can move within the cluster as they grow and change their mix of activities – vernacularly, changing job without changing car park - perhaps as a consequence of hardening into manufacturing after a ‘soft start’.
3.25 Cambridge has benefitted from effective promotion, marketing and leadership of the cluster as a whole , with a consistent and coherent message from different partners who recognise the importance of the ‘big picture’ as well as of their component organisations/facilities. This includes competitors, such as Granta Park and the Cambridge Biomedical Campus, each seeking to differentiate themselves but also acknowledging the value of each other in the promotion of the area’s overall offer. The Project Director of the Cambridge Biomedical Campus is intimately familiar with the Cambridge technology cluster
37 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
and is specifically tasked with integrating new campus tenants into that cluster. In Cambridge, the process is helped by the fact that there are a large number of formal (e.g. the Cambridge Network) and informal networks, which allow connections to be made across many spheres of interest. This should be set against a relatively poor level of networking behaviour in Cheshire, which is intended to be addressed in part by new activity under the Cheshire and Warrington LEP’s Strategic Economic Plan.
3.26 Similarly, in Edinburgh, the Scottish Government and institutions from three major cities – Edinburgh, Dundee and Glasgow – are promoting the combined offer of the cluster as a whole (and arguably, in doing so they are ‘punching above’ the sum of their individual weights).
3.27 In the case of Biopolis and one-north in Singapore, international connectivity was ensured through having a high level advisory board of scientists and entrepreneurs who advised on the development, and also helped to make connections at the right levels once the scheme became operational.
Implications for Alderley Park Despite recent progress made by the two Academic Health Science Networks, leading universities, NHS Trusts, the LEPs, and other key stakeholders (including the science parks and incubators etc.), more work is needed to set out a fully evidenced and coherent strategic agenda for the Life Sciences across the North West. The North West Business Leadership Team has launched a process of strategy development in response to this issue and this is to be welcomed. However, it is important that any future owner of Alderley Park engages fully and commits to supporting broader partnership working and bioscience cluster development across the North West. Without this, unhelpful duplication, displacement, and mixed messages externally will be the result.
Lesson 5: Maintain the quality of the physical infrastructure
3.28 Science park projects of national significance require a high quality physical infrastructure that matches the ambition and strategic importance of the scheme . For example, at Discovery Park, there are proposals to demolish nine of the second-phase buildings from the 1980s, which are no longer deemed to be fully fit for purpose. For some large sites, it can often make sense not to replace demolished buildings with new buildings, but instead, to create more open space for landscaping and other amenities etc. At other sites, such as GSK’s former manufacturing facility at Speke, south Liverpool, efforts to attract new occupiers to the lab space have proved consistently ineffective because the facility is not well-aligned with the needs of modern bioscience businesses, nor in ‘sense of place’ terms conducive with what modern and progressive knowledge-facing businesses are looking for.
3.29 Creating an interesting and attractive working environment is also important. A huge amount of thought went into the design of Biopolis in Singapore, and the result is a vibrant place which people enjoy working in. In Cambridge, there are examples of good and bad design amongst the various research parks, with the result that some locations are much more attractive than others to employees, and hence to firms. An interesting example, albeit outside
38 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
the biomedical cluster, is Microsoft, which has taken the decision to move its European Research centre from West Cambridge to the new CB1 scheme close to the railway station, in large part because staff want to work in a livelier and busier place, closer to the railway station and with better connectivity to London and the rest of the country.
3.30 Similarly, the imperative for ensuring a high quality physical environment is maintained into the future also concerns local transport connectivity, including effective and high quality public transport provision. This is likely to be very important at Alderley Park given its distance from the national rail infrastructure, in particular.
Implications for Alderley Park Maintaining the quality and physical infrastructure of any site represents a major challenge for any new owner. At Alderley Park, without adequate investment and maintenance, the high quality offer available currently could quickly deteriorate. If buildings are mothballed whilst new occupiers are sought, this process must be managed carefully so as to ensure that their long-term viability is not put at risk. Gap-funding monies may be required to support some of the demolition works needed to down-size the site, and to modernise some of the older facilities.
Similarly, consideration will need to be given to explore how best to improve the local connectivity and accessibility of the site for those employees who do not drive. The high cost of local housing in North Cheshire may mean that many workers, particularly those who are younger, are unlikely to be able to live within the site’s vicinity.
Lesson 6: Develop a clear marketing focus and admissions criteria
3.31 The marketing focus and admissions criteria for facilities such as that proposed potentially at Alderley Park need to be aligned fully with the overall vision for the proposed facility . A ‘pure’ bioscience development or indeed a facility that adopts an even narrower focus on, for example, drug discovery and development, can be appropriate in locations where there is a lot of demand in this area. However, by definition, a tighter sectoral or technology focus will result in less overall demand, although it could help to differentiate the offer from potential competitor sites. This quantity vs. focus dilemma is a key issue, and one that this report returns to in later sections.
3.32 The Stevenage Biocatalyst, given its location close to the leading bioscience hubs in the UK (Cambridge and London) has the option to be ‘choosy’ in how it markets its development, and restrictive in whom it allows onto the scheme. By contrast, Discovery Park in East Kent appears to have followed a pragmatic approach. It continues to strive for R&D activity as the main focus for the development, and it has attracted a number of good companies in this domain. However, the site has been both opportunistic and flexible too. When necessary, the Park has broadened its target market to include service companies as well as some ‘clean’ manufacturers in order to increase occupancy levels and build a critical mass.
39 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
Implications for Alderley Park There needs to be a realistic assessment of the potential to attract new businesses to the site. In an ideal scenario, from economic contribution and innovation perspectives, the high quality R&D jobs that will be lost at Alderley Park, would be replaced by similar volumes of high value R&D activity. However, Alderley Park competes with R&D locations elsewhere in the country (and overseas) and therefore, the site may need to develop a more convincing offer in order to be successful. Therefore, in order to achieve a break-even occupancy level and ensure its commercial viability, it may be necessary to widen the marketing effort to less R&D-intensive activities. It may be better to maintain an environment of successful business occupants on site rather than to turn away companies because they are not sufficiently knowledge-intensive.
Lesson 7: Get the balance of provision right . . . but be flexible
3.33 It is tempting for developers to concentrate on providing accommodation designed for larger tenants, taking long term leases, which provide more financial security. However, most sites require the development of multi-occupancy buildings, providing smaller units at flexible lease terms for small and medium sized companies to achieve uptake , helping to create a vibrant tenant base and deliver against open innovation ambitions. Moreover, it is not unusual for larger tenants to start renting smaller units and once the advantages of the location are confirmed, to take larger units or even stand-alone buildings. This can be particularly important for inward investors.
3.34 Even schemes which set out to avoid multi-occupier buildings like the Cambridge Biomedical Campus have recently concluded that some multi-occupier accommodation is important to cater for the demand from small and medium sized companies, and to provide listening posts or temporary accommodation for larger tenants.
3.35 Combining free-standing developments with shared space provision requires efforts to market and manage these schemes effectively, and it is essential to resource this management and marketing function appropriately.
Implications for Alderley Park Whilst it would no doubt be extremely advantageous to attract several large anchor tenants (and marketing efforts should be devoted to securing interest) to Alderley Park, small and medium sized enterprises are likely to form the majority of the tenant base, at least during the initial phase of the science park. The management of the facility, the service offer, the pricing regime, the physical offer, marketing efforts and the wider support provision will need to be flexible and designed so that it meets the needs of both large and small occupiers.
40 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
Lesson 8: Housing or wider mixed use developments can be key ‘enablers’
3.37 Housing provision can often contribute to making a scheme financially viable in many ways, in particular through realising capital values from selling parcels of land and/or through Section 106 support for infrastructure. For example, proceeds from housing have been an important contribution to the financial viability of the Cambridge Biomedical Campus. Also, Discovery Park is being developed as a mixed use scheme which is envisaged to include a significant element of housing and retail.
3.38 The proportion of the site devoted to housing will depend on the planning status of the site and its fit into the wider planning framework for the surrounding area. What is important to keep in mind is that the provision of housing can be an i mportant instrument to ensure long-term financial viability and help with the funding of essential connecting infrastructure. Housing, provided it adheres to good architectural standards, can also support the provision of key amenities to the site. The housing upside does need, however, to be set against the limitations that it might pose to engaging in in-vivo activities.
Implications for Alderley Park Given the scale of Alderley Park and the significant costs associated with bringing forward the science park element, part of the site may need to be reused for residential or other commercial uses. An appropriate and supportive long-term planning approach to the site will be essential in order to realise the vision for the science park.
Lesson 9: Invest in the right people, first time
3.40 Once the concept and strategy for a science park has been developed, it is essential to put in place appropriate resources for day-to-day management of the development and its operation. There are many different management models in use. In the cases of Discovery Park and also for the Cambridge Biomedical Campus, expert development consortia were formed specifically for the purposes of managing and delivering the project.
3.41 In terms of Alderley Park, whoever purchases the site from AstraZeneca will no doubt have their own management and delivery plans in place. However, a review of good practice from across the UK and internationally indicates strongly that selecting the right partners and individuals to drive the scheme is critical .
3.42 The day-to-day operations of the science park have to be managed by credible and knowledgeable individuals. The Stevenage Biocatalyst appointed Dr Martino Picardo in 2010 at the very early stages of development. He had relevant experience from bio-incubator developments (in the North West). Cambridge Biomedical Campus appointed Jeanette Walker, an expert in the Cambridge Cluster in general, and the bioscience sector in particular.
3.43 Effective marketing and market-making is an essential component of the management regime. Given the specialist nature of these developments, marketing has to be very targeted and focused. It requires effective use of networks, recommendations, and extensive exposure to potential clients through visits and missions.
41 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
Implications for Alderley Park Investing in the right people to lead, manage, and champion the science park is just as important, if not more so, as investing in the physical fabric of the site. Having the requisite skills and expertise needed to attract and retain tenants will be vitally important for any future science facility at Alderley Park. The facility’s park manager will also need to have excellent networking skills, ideally of international standing, and well-established links to key clusters elsewhere in the UK and overseas.
42 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report 4. Projection 1 – An Initial Perspective on Demand
4.1 This section presents headline figures generated from an initial ‘run’ of SQW’s Demand Assessment Model for Alderley Park, during November 2013. This quantitative desk-based assessment of demand draws on a suite of assembled information based solely on evidence generated through a detailed review of relevant literature, secondary data sources, documented past experience, and the knowledge of the study team. Importantly, the underlying assumptions used in this version of the Model (Projection 1 ) have not been formally calibrated or tested with senior-level stakeholders to the wider work.
Overview of the Model
A note of caution
4.2 The quantitative demand figures that this version of the Model (and the revised version, Projection 2 , presented in Section 6 of this report) has generated, have been used to inform a rounded assessment of demand for space at the proposed science park. There are obvious limitations to modelling future demand for science parks and similar facilities over a medium- term time horizon, particularly for sites that are large-scale with highly specialised offers. Therefore, the Model, whilst based on the best available evidence at the time, has formed one of several strands of evidence on demand. The figures presented below are useful but they should be used carefully.
Concept
4.3 The Model enables an estimate of the potential demand for Alderley Park to be calculated, based on the following logical steps:
• Identification of the groups of potential tenants, or 'segments', that form the Alderley Park demand-side market. This incorporates a judgement on the sectors and locations for which the Alderley Park offer is 'relevant'
• Estimation of the proportion of each segment that could be captured by Alderley Park. These estimates incorporate both objective and subjective perspectives. A range of key stakeholders are being canvassed to capture their views on 'high' and 'low' estimates
• Translation of the proportion of each segment that could be captured by Alderley Park into an estimate of the corresponding 'space requirement'. Two forms of ‘space’ are considered: ‘Office Only’ and ‘Lab + Office write-up’.
4.4 Overall, the model considers four components of the total demand:
• ‘Starting Point’ – the existing, in-situ, tenant base including those firms at BioHub (as of December 2013), plus assumptions relating to a Diagnostics for Stratified Medicine
43 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
Catapult (from 2015 if successful) and 700 retained AstraZeneca staff on-site (from 2016)
• ‘Typical Year (Gross Incoming)’ – the basic external annual demand derived from sector growth trends
• ‘Short Term Effects (covering the three year period 2014, 2015, and 2016)’ – an initial ‘surge’ in demand derived from the release of latent demand that is expected to follow Alderley Park’s entry into the market 13
• ‘Internal Growth Rates’ – the balance of exits and survivor growth within the Alderley Park tenant base.
4.5 Ultimately, these four components are summed to reach a cumulative projection of take-up over time.
4.6 A final component – ‘Decay in External Demand’ – is used to account for the gradual shift in emphasis from capturing external demand to nurturing internal demand (i.e. internal growth) in the Alderley Park business model.
4.7 The model calculates the total demand associated with each component based on a series of assumptions. These assumptions are fully adjustable in the Model, enabling multiple estimates to be generated and sensitivities to be tested.
4.8 The Model is constructed in Excel and consists of two main worksheets:
• ‘Introduction’ – which provides an outline of the Model’s nature and purpose, alongside a headline statement of the resulting demand projection
• ‘Assumptions’ – which reviews the principal assumptions for each of the five components highlighted above, namely: ‘Starting Point’; ‘Typical Year (Gross Incoming)’; ‘Short Term Effects (2014, 2015, and 2016)’; ‘Internal Growth Rates’; and ‘Decay in External Demand’. Additionally, the worksheet reviews assumptions regarding the type of space required by tenants and presents a calculation of cumulative occupancy based on the assumptions made. All assumptions can be edited within the model, so that sensitivity analyses can be conducted. Specific assumptions are reviewed in detail below.
4.9 In addition to the two worksheets described above, the main body of the Model is contained within four additional worksheets. These are:
13 NB: It is important to note that this component requires the user to estimate the ‘uplift’ in each segment (i.e. the additional proportion to be added to the ‘Typical Year (Gross Incoming)’ estimate for the same segment).
44 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report Figure 4-1: Overview of the Alderley Park Demand Assessment Model
Source: SQW
45 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
Structure
4.10
• ‘Sheet 1’ – corresponds to the ‘Typical Year (Gross Incoming)’ component of the Model. In essence, the worksheet estimates the total population of each potential demand segment, from which an estimate of the percentage than may be captured by Alderley Park can be made (via the ‘Assumptions’ worksheet). The demand segments considered are outlined in below.
Table 4-1: Demand Segments of the ‘Typical Year (Gross Incoming)’ Component
Independent start-ups and spin-outs (including in the NW Universities, NHS, Independent, Commercial-Group) in the E.Mid, W.Mid, and Y&H
in the rest of the UK
Firms, or operations, relocating for reasons other than in the NW expansion (i.e. change of premises/facilities) in the E.Mid, W.Mid, and Y&H
in the rest of the UK
Firms, or operations, expanding in the NW
in the E.Mid, W.Mid, and Y&H
in the rest of the UK
Foreign firms, or the operations of foreign firms, investing in the UK (i.e. FDI)
University research operations in the NW
in the E.Mid, W.Mid, and Y&H
in the rest of the UK
NHS research operations in the NW
in the E.Mid, W.Mid, and Y&H
in the rest of the UK
Research-intensive Government agencies (e.g. the in the NW Health Protection Agency (HPA), the Environment Agency (EA)) in the E.Mid, W.Mid, and Y&H in the rest of the UK
National research ventures Source: SQW, Alderley Park Demand Model
‹ ‘Sheet 1’ incorporates multiple assumptions regarding the total population of each demand segment and the corresponding space requirement of that population. Sources for all assumptions are referenced in ‘Sheet 1’ (including: Mobius, Bionow, BioCity (2012) 'UK Life-science start-up report', BIS (2011) ‘Strategy for Life-sciences’, and UKTI records).
• ‘Existing Enterprises’ – is an extension of ‘Sheet 1’ focusing on the estimation of relocation and expansion of existing enterprises in the three territories considered (‘NW’, ‘E.Mid, W.Mid, and Y&H’, and ‘rest of the UK’). The total population of each demand segment is sourced from Bionow (2013) 'Sector analysis report for Cheshire
46 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
and Warrington, Greater Manchester and Liverpool City Region LEPs'. Within the Alderley Park Demand Model, a proxy value is used for the percentage of the population of domestic firms, or operations, relocating for reasons other than expansion (i.e. change of premises/facilities etc.). Values for the expansion of domestic firms, or operations, are based on annual growth figures for the UK Med- Tech, Med-Biotech, Industrial Biotech, and Pharmaceutical sectors published in the latest ‘landscape study’ from HM Government 14 . The ‘Existing Enterprises’ worksheet feeds directly into ‘Sheet 1’
• ‘Surge’ – corresponds to the ‘Short Term Effects (2014, 2015, and 2016)’ component of the Model, estimating the additional demand, on top of the ‘Typical Year (Gross Incoming)’, experienced in the first three years of the Alderley Park proposition coming to market. The segments of this additional demand are detailed in below.
Table 4-2: Demand Segments of the ‘Short Term Effects (2014, 2015, and 2016)’ Component
Start-ups derived from AstraZeneca (3 years)
First 3-year uplift (released latent demand) Uplift in relocating firms in the NW
in the E.Mid, W.Mid, and Y&H
in the rest of the UK
Uplift in expanding in the NW firms in the E.Mid, W.Mid, and Y&H
in the rest of the UK Source: SQW, Alderley Park Demand Model
‹ Importantly, this component requires the user to estimate the ‘uplift’ in each segment (i.e. the additional proportion to be added to the ‘Typical Year (Gross Incoming)’ estimate for the same segment). As in ‘Existing Enterprises’, the total population of each released latent demand segment is sourced from Bionow (2013) 'Sector analysis report for Cheshire and Warrington, Greater Manchester and Liverpool City Region LEPs'. An estimate of the annual number of start-ups started by former AstraZeneca employees is sourced from BioCity.
• ‘Timeline’ – compiles the information from all worksheets to form a cumulative statement of occupancy for Alderley Park. This calculation includes the following steps:
‹ Estimation of gross demand per annum
‹ Accounting for the ‘Decay in External Demand’, the transition of ‘start-ups’ into ‘established firms’, percentage of occupied space vacated per annum, and
14 HM Government. 2012. ‘Strength and Opportunity 2012: The landscape of the medical technology, medical biotechnology, industrial biotechnology and pharmaceutical sectors in the UK’. www.gov.uk/government/uploads/system/uploads/attachment_data/file/36736/12-p90-strength-and-opportunity- 2012.pdf
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additional space occupied by growing tenant survivors as a percentage of previous year's occupancy
‹ Calculation of net demand per annum, translated into cumulative statement.
4.11 Ultimately, the calculations undertaken in ‘Timeline’ are fed through to the final demand projections reported in ‘Introduction’ and ‘Assumptions’.
4.12 In addition, the hidden worksheets do calculate ‘high’ and ‘low’ estimates for each of the assumptions made: in the Model, these ranges are not reported on the visible worksheets. Headlines from the hidden worksheets are reported in the visible worksheets, and all are editable. However, the content of the hidden worksheets, particularly the total populations of each demand segment, are not presented for adjustment in the ‘Assumptions’ worksheet.
Function
4.13 The function of the Model is to:
• Sum the existing, in-situ, tenant base (as of December 2013), the basic external annual demand derived from sector growth trends, and an initial ‘surge’ in demand derived from the release of latent demand that is expected to follow Alderley Park’s entry into the market
• Add the additional demand associated with the growth of survivor tenants and subtract the space vacated by exiting tenants
• Incorporate a decay in the basic external annual demand derived from sector growth trends, representing a gradual shift in emphasis from capturing external demand to nurturing internal demand (i.e. internal growth) in the Alderley Park business model.
4.14 The Model allows key assumptions for the ‘Starting Point’, ‘Typical Year (Gross Incoming)’, ‘Short Term Effects (2014, 2015, and 2016)’, ‘Internal Growth Rates’, and ‘Decay in External Demand’ components of the Model to be adjusted (via the ‘Assumptions’ worksheet).
4.15 The ‘Assumptions’ worksheet allows major assumptions to be adjusted. However, key assumptions, such as the total segment populations used in the ‘Typical Year (Gross Incoming)’ and ‘Short Term Effects (2014, 2015, and 2016)’ components can only be modified via the hidden worksheets.
4.16 As a result, the ‘Assumptions’ worksheet essentially asks the user: ‘what proportion of each segment could be captured by Alderley Park?’ (Users may consider whether they agree with the total segment populations presented in the ‘Assumptions’ worksheet, but these figures are not presented for adjustment in the visible worksheets).
Key Underlying Assumptions
4.17 A more in-depth description covering the assumptions used to drive the Model is presented in Annex B. However, those assumptions with the greatest impact on the modelled results are set out below for information.
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Table 4-3: Assumptions for the ‘Starting Point’ Component (as used in Projection 1) Component Space Take up (sq. m) on-site by Dec 2013 (BioHub tenants) Lab+Office 4,500 sq. m
700 retained AstraZeneca staff in Blocks 1 & 11 Office 8,400 sq. m Source: SQW, Alderley Park Demand Model
Table 4-4: Assumptions for ‘Typical Year (Gross Incoming)’ component (as used in Projection 1) Demand Segment Total Population Proportion that could be captured by Alderley Park Independent start-ups and in the NW 5 Firms 20.0% spin-outs (including Universities, NHS, in the E.Mid, W.Mid, 10 Firms 10.0% Independent, Commercial- and Y&H Group) in the rest of the UK 45 Firms 1.0%
Firms, or operations, in the NW 143 Jobs 15.0% relocating for reasons other than expansion (i.e. change of in the E.Mid, W.Mid, 291 Jobs 5.0% premises/facilities) and Y&H in the rest of the UK 1,243 Jobs 0.5%
Firms, or operations, in the NW 277 Jobs 20.0% expanding in the E.Mid, W.Mid, 988 Jobs 5.0% and Y&H
in the rest of the UK 1,915 Jobs 0.5%
Foreign firms, or the operations of foreign firms, investing 13 Firms 2.5% in the North West (i.e. FDI within the life sciences)
University research operations 0%
NHS research operations 0%
Research-intensive Government agencies (e.g. HPA etc.) 0% Source: SQW, Alderley Park Demand Model
Table 4-5: Assumptions for the ‘Short Term Effects (2014, 2015, and 2016)’ component (as used in Projection 1) Demand Segment Total Population Proportion that could be captured by Alderley Park Start-ups derived from AstraZeneca (per annum for first 3 18 Firms 85.0% years)
First 3-year Uplift in relocating firms in the NW 143 Jobs 15.0% uplift (released latent demand) in the 291 Jobs 5.0% E.Mid, W.Mid, and Y&H
in the rest 1,243 Jobs 0.5% of the UK
in the NW 277 Jobs 15.0%
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Uplift in expanding in the 988 Jobs 5.0% firms E.Mid, W.Mid, and Y&H
in the rest 1,915 Jobs 0.5% of the UK Source: SQW, Alderley Park Demand Model
Table 4-6: Assumptions for the ‘Internal Growth Rates’ component (as used in Projection 1)
Demand Segment Estimate Percentage of occupied space vacated per annum Start-ups 33.00%
Additional space occupied by growing tenant survivor as a Start-ups 20.00% percentage of previous year's occupancy
Percentage of occupied space vacated per annum Established firms 2.50%
Additional space occupied by growing tenant survivor as a Established firms 5.00% percentage of previous year's occupancy Source: SQW, Alderley Park Demand Model
Table 4-7: Assumptions for the ‘Decay in External Demand’ component (as used in Projection 1)
Demand Segment Estimate Decay in gross external demand: percentage reduction of 0-5 years 0.00% annual demand figure (resulting from a reduction of marketing effort, loss of novelty, entry of alternative offers, 6-10 years 5.00% equipment becoming dated etc.) 11-15 years 15.00% Source: SQW, Alderley Park Demand Model
Table 4-8: Other assumptions (as used in Projection 1) Aspect Lab + Office Office Start-Up Space Type Mix 100.00% 0.00%
Established Business Space 66.00% 34.00% Type Mix
sq. m per job 12 8 (Net Lettable Area)
Average 1st Year Start-Up 3 Employment level Source: SQW, Alderley Park Demand Model
The Results
Projection 1: fully desk-based run of the Model, pre-calibration
4.18 In the period 2013 to 2030, the Model projects demand for 51k sq. m of space, of which 17k sq. m is ‘Office Only’ and 34k is ‘Lab and Office’.
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Table 4-9: Projection 1 - Initial assessment of demand (pre calibration with stakeholders) Year Cumulative Occupancy (sq. m, Net Lettable Area) ‘Office Only’ ‘Lab and Office’ Total 2013 015 4,500 4,500 2014 872 7,791 8,663 2015 1,766 10,944 12,709 2016 11,059 14,156 25,215 2017 11,563 15,728 27,291 2018 12,058 17,046 29,103 2019 12,528 18,401 30,929 2020 12,999 19,936 32,934 2021 13,469 21,512 34,981 2022 13,940 23,088 37,028 2023 14,410 24,579 38,989 2024 14,832 25,885 40,717 2025 15,253 27,187 42,440 2026 15,673 28,489 44,163 2027 16,094 29,791 45,886 2028 16,515 31,093 47,609 2029 16,936 32,396 49,332 2030 17,357 33,698 51,055 Source: SQW, Alderley Park Demand Model
4.19 Over the period, this translates to an annual additional demand of 2.8k sq. m per annum . As the chart below shows, there is significant movement around this average over time, as supply is released and then the demand pattern settles down.
15 It is important to note that the SQW Demand Model assumes that AstraZeneca will lease the entirety of Blocks 1 and 11 (office space) for 700 retained staff, and therefore an 8,400sq. m Net Internal Area has been used from 2016 onwards. If any subsequent lease agreement uses a Net Lettable Area, then the 8,400 sq. m figure could be reduced significantly.
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Figure 4-2: Projection 1 - initial assessment of demand at Alderley Park (pre calibration with stakeholders)
60000 sq.m
50000 sq.m
40000 sq.m
30000 sq.m
20000 sq.m
10000 sq.m
0 sq.m
Year
"Lab and Office" "Office Only"
Source: SQW, Alderley Park Demand Model
52 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report 5. Qualitative Perspectives on Demand – the General View
5.1 This section of the report draws on the views of more than 60 senior-level expert stakeholders to explore the scale and nature of demand for accommodation and facilities at a future Human Health Science-focused facility located within the Mereside Zone at Alderley Park.
Key themes from the stakeholder consultation
Stakeholders see Alderley Park as an opportunity of national significance
5.2 In general, the majority of stakeholders commented that they saw Alderley Park as an exciting opportunity for the Human Health Sciences sector in the North of England, and potentially at the level of the UK. The consultations revealed encouraging support for an ambitious science hub development and the majority of consultees were confident that a repurposed facility, with appropriate configuration and differentiation, could be a success. This said, some consultees found it difficult genuinely to provide specific evidence on their stated positions, given the lack of detail at present on the precise Alderley Park proposition.
5.3 Generally, the growth trends in Life Science were seen as encouraging, and providing a good headwind, although the changing geography globally for growth in the sector needs to be watched carefully. Whilst most consultees agreed that there was a significant supply of bioscience accommodation across the North currently, with a lot more in the pipeline (see Section 8 for a detailed assessment of existing and pipeline supply), the reflex observation was that most of these existing sites enjoyed high occupancy levels.
5.4 On the other hand, some stakeholders offered a more sanguine view. They felt that, unless one or two large ‘rainmaker’ anchor R&D tenants could be attracted quickly to, and/or a rapid tenant base established at, Alderley Park during its initial stage, then the proposition would be very challenging to build and sustain. Whilst they recognised that certain aspects of the Alderley Park site are highly specialised and of a high quality currently, there were concerns that the vast majority of the space that will become available is not sufficiently unique in a North of England context. Accordingly, they were of the view that growth within the pharmaceutical sector and Human Health Sciences in the North of England may not be strong enough to guarantee demand for Alderley Park.
5.5 Some consultees also suggested that in their view, over recent years there had been a general trend for certain segments of the market (predominantly early stage firms and publicly funded research institutes, but not exclusively) to increasingly be attracted to co-locate in dense urban locations close to major higher education, NHS and other research assets e.g. the Francis Crick Institute and the Cell Therapy Catapult in central London. However, it was also recognised that many out of town bioscience hubs, including those in the North West such as Sci-Tech Daresbury and the Heath, had continued to grow and develop successfully – in part because they were able to provide a differentiated offer to city centre facilities, where congestion, crime and expansion space can often be more problematic. The importance of establishing a critical mass of occupiers and developing an on-site community at Alderley Park
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was highlighted by stakeholders. The point was also made that the move towards more virtual ways of working, enabled through technology, should be a key consideration in looking at longer term demand for physical space.
5.6 For those stakeholders from the private sector in particular, there was a relatively consistent view that new businesses, especially SMEs, are often attracted to an area by the presence of larger businesses, who provide a market, and as one consultee described it, an ‘experience base’. It was commented that access to such experience and expertise can be crucial in de- risking the development journey for these firms. With future anchor tenants at Alderley Park not yet known, and AstraZeneca’s R&D capabilities transferred, it was observed that this is a significant risk to the development. Elsewhere in the consultations, the point was made that the retention of an ‘active’ R&D facility on-site by GSK at Stevenage had been an important ingredient in the perceived success of that facility. This is backed up by the commentary on operating experience reported in Section 3.
5.7 The quality of the physical accommodation, together with the highly specialised equipment and on-site technical skills, was seen consistently as being an attractive proposition to potential occupiers. This said, there was a clear consensus around the importance of retaining these ‘service’ capabilities going forwards in order to differentiate successfully Alderley Park from competitor offers elsewhere. What the scope is for the retention of this infrastructure and people ‘package’, and how this is achieved, is a critical consideration, and one to which the Task Force should give attention.
Implications for Alderley Park On balance, the view is that Alderley Park is an exciting opportunity for the Health Science Services sector in the North of England, and potentially the wider UK. This said, there is a constant rejoinder from the private sector business base on ‘what, precisely, is the offer?’
There is a significant supply of (generally, lower quality) bioscience space across the North of England, but most sites are expressing high occupancy levels. The pipeline of proposed space is significant, and should not be overlooked.
The landing of one or two significant ‘rainmaker’ investments at Alderley Park could be critical in triggering wider momentum, and providing ‘comfort’ to hesitant smaller firms who may be considering locating at the facility.
The general trend towards the urban concentration of certain segments of the bioscience and wider innovation and science market (driven by the necessity for co-location), and the virtualisation of business models, will be significant challenges for Alderley Park.
Retention of an active AstraZeneca R&D activity on-site, and on-site technical skills to operate specialist facilities, would be very powerful, and distinguishing, components in the rebirthed site’s success.
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Creating a complementary, yet differentiated, offer will be key
5.8 Whilst discussions about the future of Alderley Park are clearly at a formative stage, it was evident from the consultations that some concern exists around the long-term direction of travel. Stakeholders generally did not want the strategic opportunity that Alderley Park is seen to represent to be ‘missed’. Alderley Park, and its activities, are important scientifically and economically to the North of England, and these benefits need to be retained. Accordingly, there were strong calls from consultees for the site not to be seen simply as a straight land and property asset, with an overarching imperative to maximise rental returns or land values in the short-term. However, at the same time, consultees were unsure as to whether any future owner would be willing to adopt a long-term approach, given the scale of the site and the significant commercial pressures involved in ensuring its viability.
5.9 Assuming that the future owner of the site is committed to developing a Human Health Science-focused facility at Mereside, consultees then went on to say that Alderley Park’s offer should look to be differentiated from that of other Northern facilities, so as to avoid damaging displacement. A specific focus on Human Health was seen as providing a clear statement of intent, with the ability to link to industrial bioscience (reflecting the region’s capability base), synthetic biology (seen as a growing area), and the attraction of large international firms (which Alderley Park can accommodate physically) all being potentially distinguishing features of the offer. The quality of Alderley Park’s infrastructure generally, and the calibre of its specialist facilities, were also seen as key differentiators.
5.10 There was clear evidence from the discussions that a significant number of stakeholders are already worried about the extent to which Alderley Park may target occupiers from other science parks and incubators in the North, thus giving rise to high levels of intra- and potentially inter-regional movement for no net economic gain. Consistently, this was seen as being potentially very damaging to the wider ecosystem, and unhelpful to the work Alderley Park will need to do to locate itself in various regional contexts and partnerships.
5.11 These issues often prompted discussion of wider concerns with stakeholders, relating to the lack of a shared vision and strategy generally for growing the North West’s Life Science base, and developing an internationally competitive cluster known for its open and reinforcing innovation behaviour. Embracing HE, the NHS, industrial and other science park/incubation assets, this would locate Alderley Park formally in a hierarchy of regional provision, not in any way to create a cartel, but to provide a very clear depiction of how the different parts of the regional offer can come together and create synergy.
5.12 Mention was made of the strategic thinking emerging from the recent work of the two Academic Health Science Networks, the LEPs in Manchester, Liverpool, and Cheshire and Warrington, and joint working that is building between the Deans of the Medical Schools at the universities of Manchester and Liverpool. Moreover, the asset mapping work progressed by the North West Business Leadership Team was a further helpful contribution, but this needed to be progressed more sharply into specific offers and products. Much of this activity, was, however, simply not seen or understood by private sector business consultees.
5.13 In the course of this element of the consultation conversations, two alternative routes forward were outlined for Alderley Park. The first, and minority, view was that with a fair wind, Alderley Park could compete genuinely in the Premier League of bioscience alongside
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Cambridge, Oxford, London, San Francisco, Boston and Singapore etc. The second, and much more commonly held view, was that a conscious decision should be taken to position Alderley Park at the top of the UK’s First Division, perhaps in so doing, linking with activities elsewhere in the North West, North East, and North Staffordshire to create density. This ‘divisional choice’ is clearly key strategically, and one that is commended to the Task Force for active consideration as it thinks through future choices.
Implications for Alderley Park There is a strong call for Alderley Park to be seen as a strategic player for the North of England’s economic and scientific well-being, not simply a high-quality property scheme.
Alderley Park must be differentiated from other facilities in the North West and wider North of England, if the risk of displacement is to be minimised.
The lack of a shared vision and strategy for growing the North West’s Life Science base as part of an internationally competitive cluster is a major obstacle and, by implication, in need of addressing promptly.
There is a key strategic decision for the Task Force to consider regarding Alderley Park’s future – does the facility seek to position itself in the Premier League of Life Science players alongside the UK’s Golden Triangle, Boston, Singapore etc., or should it be leading the First Division effort that complements this?
Yes be opportunistic, but retaining a core focus on Human Health Sciences would help to differentiate
5.14 In terms of Alderley Park’s future sectoral focus and positioning within the market, most consultees were of the view that a strong emphasis on Human Health Science-related activity should be a central theme of any future direction. The region’s capability in bio- manufacturing could also be a key dimension to weave in. More specifically, stakeholders indicated that they thought Alderley Park should target companies and organisations, including health charities, engaged in drug discovery R&D, as well as support services and product areas (e.g. analytics, diagnostics, contract research, screening, consultancy and specialist support etc.). It was claimed that this would enable tenants to capitalise fully on the availability of specialist facilities and services at the site, assuming these are retained post 2016.
5.15 Nevertheless, there was a recognition that the need to build up occupancy levels and establish a critical mass of activity on site, may result in Alderley Park ‘drifting’ towards a more generic science or business park offer over time. This tension between quantity and quality was a recurring theme, with the trade-off between differentiation and volume recognised as a key dilemma. On a number of occasions, it was observed that those with a current operating interest in Alderley Park, wider public policy stakeholders, and a future owner are, and will, be at different places on this ‘differentiation versus volume spectrum’; this needs to be recognised and monitored, rather than fudged and lost.
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5.16 In operation, consultees suggested that drift could be avoided, for example, through the use of clear entrance criteria and a longer-term commitment to a specific direction of travel from the new owner. At the same time, care would be needed to allow the development to ‘flex’ and ‘breathe’ as market trends and opportunities dictate.
5.17 A small group of consultees articulated an alternative, non-deterministic view. They thought the sectoral focus of Alderley Park should be allowed to develop and emerge organically from its tenant base over time, without undue focus and steerage. In the main, this view was pragmatic – they were of the opinion that any future owner and wider partners would ultimately not be able to skew artificially the focus of the site towards a particular sub-sector, or set of technologies.
Implications for Alderley Park A focus on Human Health Science, the ability to cater for large international investment, and a quality environment with specialist facilities, together represents a significant and differentiated offer for Alderley Park going forward.
Within the Human Health Science space, Alderley Park’s prime focus should be companies and organisations, including health charities, engaged in drug discovery R&D, as well as associated support services and product areas.
This said, there is a delicate and sophisticated balance to strike between a hard focus on Human Health Science at Alderley Park, and at the same time allowing the development to ‘flex’ and ‘breathe’ as market trends and opportunities dictate.
The various ‘values’ that different partners currently place on Alderley Park needs to be recognised and monitored, rather than fudged and lost. Short-term interests, and long-term ones, are not necessarily aligned at present, and the tensions – perceived or actual – need to be avoided and managed.
Demand is expected to come from different segments of the market
5.18 Four main types of occupier were identified by stakeholders when asked about what they thought the main potential sources of demand for the science park would be. Each of these is explored below.
Start-up businesses developed by former AstraZeneca employees (supported through the BioHub model), as well as a small number of spin-outs from local universities and NHS Trusts
5.19 A range of different views was expressed about the potential scale and nature of the demand from former AstraZeneca staff. For instance, some stakeholders were optimistic and confident that if appropriate incubation and pre-start up support (including access to start- up funding) could be provided, a significant number of businesses could be fostered.
5.20 Most consultees were unwilling to offer a specific figure in terms of how many start-ups they thought might be generated during the initial phase of the bioscience park. However, several stakeholders did indicate that they thought it would be reasonable to assume that, over time,
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around 30 such businesses could be developed. They were of the view that many staff have well-established roots in the area and may be unwilling to relocate to Cambridge. If adequately stimulated and supported, these people could form a useful start-up pool.
5.21 Across the discussions, four main categories of AstraZeneca-derived new firms were identified:
• companies that involve a team of staff taking over an existing AstraZeneca facility and delivering a specialist service directly associated with that piece of equipment or space
• companies that need and can afford to rent lab or office space at Alderley Park, and have clear growth ambitions
• companies that need and can afford to rent lab or office space at Alderley Park, but have limited growth prospects (e.g. firms established to deliver consultancy etc.)
• companies formed that, regardless of their growth prospects, do not need, or cannot afford, to rent space at Alderley Park.
5.22 Other consultees were much more conservative, and felt that a significant amount of early stage support would be needed in order to convert the high quality intellectual property and ideas into sustainable businesses, as most of the staff at AstraZeneca would lack entrepreneurial skills and business acumen. Perhaps the most conservative views were from those with venture capital experience, with perspectives being offered at two levels. First, it was viewed as highly unlikely that 30 firms with serious long-term growth prospects could be created, and second, even if that were possible, there was unlikely to be sufficient venture capital in the system in the North West to drive that volume of quality forward, although it was recognised that the funding situation has improved over time. Again, this brought back sharply into focus the issue of quantity vs. quality, touched on above.
5.23 The final comment that was offered related to that of the ‘paternalism challenge’, that is, moving staff from a large oligopoly into a freestanding enterprise environment. This was likely to be a tough challenge, notwithstanding the hand-holding that high-quality business support might provide, with potential consequences on both the quantity and quality of firms being created. The point was also made that the age profile of likely AstraZeneca entrepreneurs was likely to be such that levels of ‘hunger for growth’ might not be optimal.
5.24 Levels of demand from university and NHS spin-outs were deemed much lower. In part, this is due to the fact that there are still relatively few Life Science spin-outs generated each year across the North West (about five on average over recent years), but also because stakeholders observed that early-stage companies often prefer to stay close to the ‘thick markets’ in urban centres of university and clinical research staff (often from which they formed), health charities and government research facilities, as well as patients.
5.25 It was reported that if rentals remained competitive, some early stage firms might be attracted to the site so they can rent or access specialist equipment and expertise. Words of caution were offered on two or three occasions regarding rental levels, and the critical need to ensure that prices at Alderley Park were not distorted to the detriment of other market-level offers
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at facilities elsewhere. This would be highly unhelpful to the wider ecosystem, and damaging for future partner relationships.
Implications for Alderley Park AstraZeneca-derived new firms can, and should, be a key component of Alderley Park going forward. Within this group, there is likely to be a typology of needs and growth potentials, which will need to be catered for.
The 'paternalism challenge’ – moving from a large sophisticated single employer environment to a start-up situation – will be a key issue for all AstraZeneca entrepreneurs, with consequent demands from the business support mix.
Start-up demand from university and NHS sources for the Alderley Park offer will be modest; the more likely appeal for companies from these origins will be once they have 10 or more employees, and are looking for relocation space.
The operation of Alderley Park, in rental terms, must avoid distorting the market.
Small and medium sized Human Health Science firms currently located across the UK, but primarily from within the North West and neighbouring areas of North Staffordshire, Yorkshire and Humber, and the North East
5.26 Those firms which tend, at present, to be located in city centres could be attracted to Alderley Park as/when, with the onset of some maturing, they require expansion space. Consultees stated that following a capital injection and/or after being acquired by a larger UK or overseas firm, some SMEs, including university and NHS spin-out companies, are able to grow rapidly and these will require additional space.
5.27 As mentioned above, some will want to stay close to university departments or NHS Trusts and within a city centre environment. However, it was also reported that other firms might want to relocate to more of a campus-style environment away from the centre, with affordable access to specialist equipment and services, and potentially easier travel arrangements. Others may simply be forced to locate away from dense city centres, as their existing footprints are not able to provide adequate expansion space.
5.28 Some consultees stated that they thought that there could be demand from rapidly expanding SMEs in either the Golden Triangle or Scotland who could be attracted to Alderley Park in order to access specialist skills, facilities, and a North of England market. Other consultees were of the view that many of these firms are often footloose and they tend to locate in places where they are able to access venture capital funding, public sector grants, appropriate management expertise, and have proximity to their markets and knowledge bases. Overall, stakeholders felt that there could be demand from this segment of the market, but that given the significant scale of the proposed facility, securing some larger anchor tenants would be a first requirement, which in turn could help to attract SMEs and drive open innovation activity.
5.29 Following on from the previous point, several stakeholders were of the view that some occupiers may be attracted to the site in the short-term in order to build R&D relationships with AstraZeneca before the R&D function is relocated to Cambridge. Signalling an ‘open for
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business’ position to such relationships may be something the AstraZeneca wishes to action in the short-term.
Implications for Alderley Park Whilst Alderley Park could be a ‘first’ home for start-ups, it could also be a key space for ‘Stage 2’ expansions, that is, for firms and organisations looking for a second larger base. This might be particularly so for businesses looking to use the specialist facilities available at Alderley Park (provided, of course, that, where needed, there are expert staff to operate these facilities).
Success in attracting nationally footloose firms would depend, to a significant degree, on the funding, and in particular venture capital funding, offer that Alderley Park was able to make. Given this, venture capital should be considered seriously as a key element of the wider Alderley Park ‘product’.
Whilst AstraZeneca remains at Alderley Park, there may be some firms who may be attracted to the facility to develop links with the firm before it moves to Cambridge. AstraZeneca signalling publicly that it is ‘open for business’ with these sorts of opportunistic firms should be considered.
Inward investors looking to access UK (including the NHS) and European markets
5.30 Stakeholders were of the view that overseas firms seeking a location that offers a good quality of life (access to high quality housing, strong performing state schools, and a rich mix of cultural amenities etc.), a highly skilled labour market, specialist technical facilities and services, access to a diverse sub-regional population, the global brand of the NHS, plus good rail links to London and international connectivity through Manchester Airport, could be drawn to Alderley Park.
5.31 Consultees indicated that they felt that the UK remains a competitive location for overseas firms, although the largest and most valuable investments were likely to take the form of mergers and acquisitions in particular places, as opposed to large-scale greenfield investments. That said, consultees did acknowledge that on occasions, these investments do occur and if one such project was ‘landed’ at Alderley Park, it could be transformational and act as a major catalyst for the scheme.
5.32 Developed countries such as North America, Germany, France, Switzerland and Japan were all identified as being key in terms of their investment potential to serve UK markets, and North American and Japanese firms in particular were seen as possible candidates for using Alderley Park to service continental Europe. On the horizon, the growing importance of China, India and parts of South America was also highlighted.
5.33 Stakeholders were consistent in their view that AstraZeneca’s disinvestment decision had been damaging to the North West, as the news will have been circulated widely throughout key overseas markets. This points to the need to think hard, and promptly, about overseas marketing tactics for the rebirthed facility.
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5.34 Furthermore, despite some encouraging progress made over recent years, many consultees remained unconvinced that the Northern cities would be able to collaborate effectively to develop a highly integrated and coherent offer, of which Alderley Park might be part, to foreign investors. It was observed that too many of the Human Health Science assets remained highly fragmented and far too much effort and energy had been misdirected towards internal competition as opposed to facilitating partnership approaches to compete on an international playing field. This reinforces the point made earlier about the need for a strategic regional approach for the sector.
5.35 Generally, it was felt that significant inward investment was most likely to occur through acquisition. A foreign buyer may buy an SME that has developed at Alderley Park, and then make further investment. Consultees identified specific examples in the North West including Tepnel, which was bought by Genprobe, and DxS, which was bought by Qiagen. The general message from stakeholders was that it is important that the acquired company have sufficient space to allow for future expansion post-investment. Alderley Park was seen as a good location, offer-wise, to cater for such growth.
5.36 Private sector stakeholders from the North West observed that the original plan to develop the BioHub and create space for SMEs to co-locate with AstraZeneca R&D teams was a strong proposition. However, they commented that progress needs to be made quickly in terms of building a critical mass before AstraZeneca R&D functions and expertise are relocated to Cambridge.
Implications for Alderley Park The Alderley Park offer – site, location, access to skills, potential links the Higher Education and NHS bases, and connectivity to national infrastructures – could all be, potentially, highly attractive to inward investors, especially those looking to establish ‘platform’ operations to service Europe. This might be particularly the case for American and Japanese companies.
This, however, needs to be set against the fact that most inward investment activity is either in the form of reinvestment at existing locations or in the form of merger and acquisition activity, rather than formal relocation investment. Understanding the different dynamics of these imperatives will be key for the management of Alderley Park.
The decision to disinvest at Alderley Park will have been viewed negatively overseas. This points to the need to think hard, and promptly, about overseas marketing tactics for the site and its offer.
There is considerable scepticism about the ability of the Northern cities to develop an integrated Life Science offer, of which Alderley Park might be a part. This points, again, to the need for a strong and robust strategic framework for the sector’s development in the North of England.
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Whilst the early progress of the BioHub is recognised, efforts must remain focused on creating a critical mass of activity before AstraZeneca’s R&D activity is relocated.
The research councils, universities, NHS and health charities, looking to establish R&D ‘projects’ or centres at Alderley Park.
5.37 Consultees were very much less certain about the potential scale or nature of demand from the wider research base. It was felt that some HE activity could be attracted to the site such as Doctoral Training Centres or collaborative R&D projects, although in the first instance, most universities would be looking to invest in their own campuses. Consultees were not convinced, generally, that NHS Trusts would be willing to occupy space at Alderley Park; some were already progressing plans to develop mediparks or bio-campus environments on their existing sites, although specific research projects or niche services might be relocated to Alderley Park to make use of the specialist facilities, as long as access to patients was not required.
5.38 Across the consultations, the view was expressed, often candidly, that the things that made the Alderley Park ‘quality of life’ offer attractive – a largely rural location, tucked away, etc. – were also likely to represent collectively a significant Achilles heel for the development. This was set against a backdrop of a general direction of travel within certain types of R&D centre investment that was very much at locations that brought together university, health centres and patients, graduates, and specialist support services. This is clearly a key issue; nothing can be done about the physical location of Alderley Park, but this could be significantly ameliorated by the use of virtualisation and high speed connectivity technologies, which would allow AstraZeneca and future occupants to be ‘digitally’ closer to other places and organisations.
Implications for Alderley Park There is likely to be little demand at present from the research councils, universities, NHS, and health charities to take significant space at Alderley Park. From Alderley Park’s perspective, the emphasis here should be opportunistic, rather than heavily targeted.
There may be an opportunity to initiate something on a relatively small-scale with the universities, perhaps in terms of relocating a Doctoral Training Centre or modest collaborative R&D project activity.
Alderley Park’s offer lacks, implicitly, the co-location/’thick market’ benefits that characterise increasingly Life Science investment from certain segments of the market – typically in urban locations. This ‘detachment’ from urban centres cannot easily be addressed physically, but can be extensively mitigated by communication and virtualisation technologies.
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Several niche target sub-sectors were identified by stakeholders
5.39 When asked about what the key sub-sector opportunities might be for a future facility at Alderley Park, the following areas were identified: molecular diagnostics; companion diagnostics; stratified (personalised) medicine; clinical trials; biologics; and synthetic biology. Private sector stakeholders expressed a desire for new and exciting technologies to be attracted to Alderley Park through, for example, the creation of centres of excellence for infection-related sciences or anti-microbial resistance. Good Manufacturing Practice (GMP) and regenerative medicine/cell therapy were also identified as potential areas of opportunity for the site to drive future demand, although it was recognised that some of these areas were now becoming more mature, and key developments are underway in other parts of the UK.
5.40 In addition to those opportunities presented above, which consultees felt were emerging from industry trends, a number of niche areas, directly aligned to the specialist facilities and services available at Alderley Park, were also discussed. These covered the following:
• Compound management and storage
• Cytotoxic activities
• High-end mass spectrometry
• High-throughput screening
• Imaging technologies, particularly around the site’s NMR and PET scanning facilities
• In-vivo facilities
• Pilot manufacturing
• Radio-labelling.
5.41 Due to the highly specialised nature of such activities, consultees were unable to quantify how much demand they thought might exist for these activities going forwards. However, it was reported that currently, there were ‘live enquiries’ relating to the in-vivo suites at Alderley Park and that if all of these potential tenants were to be secured, around 10% of the space available at Blocks 23 and 24 would be let. Detailed feasibility and business planning work is being undertaken to explore this market further.
5.42 Other consultees focused the demand discussions around opportunities presented by recent policy developments such as the call for the Diagnostics for Stratified Medicine Catapult or, as above, a Synthetic Biology research centre. Stakeholders were highly supportive of Alderley Park positioning itself to attract national research centres, through local collaborations, as it was felt that the North West had historically under-performed in attracting these types of research investment, relative to competitor locations elsewhere in the UK.
5.43 Specifically, several consultees pointed out that a successful Catapult bid could be transformational for the site, helping to build a critical mass but also sending out a clear positive message to the market about the site’s ambition. There was a high level of support for the DfSM Catapult to be located at Alderley Park amongst the private sector consultees. It was felt that this would underpin the basket of sizable personalised medicine MRC awards in the North West and across the North more generally (e.g. PSORT). The Catapult will cover
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both discovery and development, and it would help to reinforce the North West as a key diagnostics location, building on major recent investments in firms such as Gen-Probe, and Qiagen. All this said however, the issue of Alderley Park’s location outside the urban core and ‘thick markets’, and how to tackle this, was again identified as a key issue.
5.44 The provision of key technical support services was identified as being vitally important in attracting occupiers to the site (including the formation of new support service delivery providers) and supporting the growth of existing tenants. This was also seen as an important way of differentiating the offer at Alderley Park. Given the strength and diversity of technical services and facilities at Mereside, there was agreement amongst stakeholders that the continuation of these services, such as the high-end NMR (nuclear magnetic resonance) imaging, would be crucially important going forwards. It was felt that these services should be made available to tenants and, importantly, non-tenants on a commercial basis, to support the sector more generally. It will be important for AstraZeneca to declare its intentions on this issue soon, such that if the expertise held by the company to operate facilities is lost formally, then discussions can take place quickly to replace this with alternative solutions. As one consultee put it pithily, ‘fancy kit without intelligent operators . . . is nothing but fancy kit .’
5.45 A note of caution was raised by several consultees around the health and safety issues associated with the transformation of sites with highly specialised equipment and facilities from single user to multiple users.
5.46 One final point was made here, namely that of being alert to future discontinuities in science and/or business models, both of which have the potential to be disruptive for a new Alderley Park venture. Being alert to the potential of these, foresighting the implications, and building in flexible responses to anticipate these were all seen as key parts of a successful mix.
Implications for Alderley Park Within the envelope of Human Health Sciences, a significant range of sub-sectors are identified as congruent and aligned. These range from molecular and companion diagnostics, through to biologics, synthetic biology and specialised service provision. These are potential foci for Alderley Park.
In addition, the effective reuse of the significant specialist facilities at Alderley Park could be helpful in conferring significant differentiation to the site’s offer. These facilities may allow Alderley Park to diversify into the manufacturing aspects of Human Health Science, to a greater extent than other competitor sites would allow.
Tenants will primarily be looking for lab and write-up space, but office space is often important too
5.47 There was a broad consensus amongst stakeholders that demand would primarily be skewed towards laboratory and write-up space. The general view from consultees was that they thought occupiers would be engaged, in the main, in drug discovery and biotechnology activities, as well as innovative firms supplying services to such companies and the wider sector in the North. More specifically, it was suggested that the main sources of demand would be businesses engaged in diagnostics and therapeutics development. Consultees thought that
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the clean rooms at Alderley Park would be too big for Cell Therapy, but CROs would find the offer attractive if the in-vivo facilities were retained.
5.48 As well as the specialist scientific facilities and equipment, some stakeholders suggested that office space would also be an important element of the offer, and that basic supporting infrastructures such as car parking, broadband, reception services, security, meeting rooms and restaurant etc. must also be very competitive, as well as offering flexible short-term leases. Amongst business consultees, there was a common call for leases to be flexible not only in their duration, but also in terms of their restrictions and covenants. At a wider level, the point was made that some research was likely to continue to shift away from laboratory situations to in-silico modelling, in part to save costs and time.
5.49 Overall, at the level of the North of England, consultees were generally of the view that there is a large existing and pipeline supply of office and laboratory space suitable for bioscience activities, but less so for chemistry.
Implications for Alderley Park The primary demand at Alderley Park will be for general/specialist laboratory and write-up space, especially from amongst those firms engaged in drug discovery and biotechnology (and, within this, those engaged in diagnostic and therapeutic development activities).
Office space is likely to be an important part of the mix, especially for those firms providing services of a non-physical nature, either to tenant firms at Alderley Park, or elsewhere in the Human Health Sciences sector.
Basic supporting infrastructure at Alderley Park – car parking, reception, etc. – are all judged very positively. However, the overhead of these infrastructures, and indeed the wider flexibility of lease deals, will be key elements in establishing the facility’s wider competitiveness.
Quality of the offer identified as being key
5.50 It was reported consistently by stakeholders that the quality, sophistication and scale of the physical infrastructure at Alderley Park, combined with the specialist technical skills and know-how, would make the site attractive physically and functionally to the market. The recent new build or modernised blocks in particular were highlighted as being ‘second to none’ and some of the specialised NMR and PET scanning capabilities, as well as other specialist scientific equipment facilities, were characterised as being unique in a UK context. However, there was significant uncertainty amongst stakeholders about how much equipment and expertise would be retained post-2016. Similarly, it was recognised by stakeholders that some of the older and disused blocks on the site would need to be demolished.
5.51 Additionally, some consultees were concerned that going forward, without AstraZeneca, it will not be possible to maintain the site as a global ‘Premier League’ facility. Over time, this would
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mean that the quality of the Alderley Park offer would diminish as specialist equipment becomes dated and investment levels generally fall off. Some stakeholders also urged caution in not overstating the attraction of modern laboratory space – high-performance modern space is only regarded as such by those who are looking exactly for it. Additionally, several consultees pointed out that, often, companies require lab space to be reconfigured to meet their own highly specific requirements. Going forwards, therefore, it will be the flexibility of the Alderley Park offer that matters, not simply its quality.
Implications for Alderley Park Alderley Park is undoubtedly a facility of quality, sophistication, and scale. This, together with its specialist equipment, makes it a very significant asset for the Life Science sector in the North of England.
Given its excellence, there is an underlying worry that the quality of the asset may fall off in the future, given that a new owner is unlikely to invest at the scale of AstraZeneca. Assuring tenants of future quality, whilst recognising that quality needs to be maintained at proportionate cost, will be a key challenge.
Flexibility will be needed to allow specialist firms to configure their spaces as they so wish. More generally, business consultees anticipated a demand for lease flexibility in terms of duration, and in terms of restrictions/covenants.
There were mixed views on physical connectivity . . .
5.52 International connectivity through Manchester Airport was seen by stakeholders as being a key strength for Alderley Park, and a feature to be promoted. Road connectivity from the site to the airport was seen as being good (assisted by the new £70 million Alderley Edge bypass), but, more widely, road connectivity to other locations was seen as a significant constraint.
5.53 Rail connectivity, primarily through Macclesfield to London and the wider South East was seen as being very good, and to improve further as/when Network Rail investment progressed. Links to Manchester, Liverpool and the wider North West were judged, at best, to be adequate. On HS2, this was potentially helpful for the site in the medium-term, with the commitment to a new station at Manchester Airport, and active work underway to make the case for a station at Basford, south of Crewe.
. . . and access to specialist skills and expertise, particularly post-2016
5.54 The manufacturing and engineering heritage of the North West and Cheshire, in particular, was seen as being attractive by most consultees. Additionally, it was claimed that leading local universities (specifically Manchester, Liverpool, Sheffield, Leeds, and Keele) were able to provide a good supply of talented graduates and post-graduates. However, several consultees commented that more work needed to be done to develop, attract, and retain talent in the North West if further growth of the Human Health Sciences cluster was to be realised.
5.55 Stakeholders indicated that they were concerned that, on skills for the sector, the North West and the UK at large were losing ground to competitor locations internationally. Variously,
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access to advanced bioscience, wider Science, Technology, Engineering and Maths (STEM), and technician skills were reported.
5.56 Consultees generally were concerned about the specific impact of AstraZeneca’s decision on the supply of skills within the North West post-2016, given the loss of a major global R&D facility within the region and its ability to attract high quality talent. There appeared to be two important aspects to AstraZeneca’s role in injecting talent into the region, as reported by consultees:
• Given the brand, scale of resources, and ‘pull’ associated with a major global pharmaceutical company, AstraZeneca had been able to attract, and retain, high calibre individuals to the North West
• The international nature and reach of the R&D activity at Alderley Park had resulted in members of the workforce being exposed to overseas networks and developments in the sector internationally. This meant that the skillset was not only technically well developed, but also sophisticated in terms of understanding commerce and working within complex networks.
5.57 Added to this, it was reported that former senior-level AstraZeneca staff had gone on to play significant roles in building spin out companies such as DxS, Cyprotex, Imagen, and Blueberry Therapeutics. Moreover, in addition to creating spin-out companies based around under-used AstraZeneca IP, it was commented that the AstraZeneca ‘diaspora’ was also making a vital contribution to other SMEs within the North West cluster, often through Board-membership or senior management roles, offering specialist advice around accessing finance, developing strategy, and building overseas networks.
5.58 Taking these points in the round, there appears to be a significant opportunity for the AstraZeneca ‘diaspora’ in the North West to come together in a formalised manner to provide expert mentoring, alongside existing efforts, to the new business start-up community at Alderley Park. This ‘elders’ group could play a vital role in injecting the requisite management, leadership and international experiences needed to successfully establish, grow and develop new Life Science firms. The group could offer much needed guidance and support to fragile early-stage firms, specifically in terms of accessing appropriate finance and ongoing strategy development etc.
Implications for Alderley Park Physical connectivity to Alderley Park is judged, generally, to be good, with the potential to improve further over time.
Access to specialist skills is good, with a steady supply of graduates and postgraduates from the North West’s universities.
More generally on skills, there is an observation that the North West (and the UK) is falling behind that of other compatible clusters internationally. This needs to be monitored carefully. It may warrant Alderley Park looking to build profile (with a
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view to recruiting skilled and talented personnel) in other cluster areas internationally.
The loss of AstraZeneca itself from the North West cluster is very likely to have a direct impact on the availability of skills in the regional sector for the long-term, given the strength of the so-called AstraZeneca diaspora in the North West. This applies at a general level, but also in terms of some key individuals from AstraZeneca’s diaspora, who have driven the development of the Life Science cluster in the North of England, as well as making valuable wider contributions to the knowledge economy e.g. through senior positions in local HEIs etc. Thought needs to be given by the Task Force and partners as to how such ‘rain-maker’ talent can be identified and grown.
The North West cluster was seen as being distinctive, with significant growth potential
5.60 When asked about the attractiveness of the North West as a location for Human Health Science investment, stakeholders were generally quite optimistic and positive. Although it was acknowledged that most areas of the UK were now seeking actively to build Human Health Science clusters, it was observed that the North West had advantages over some of these competitor areas and significant future growth potential.
5.61 The concentration of academic, NHS and industrial assets within the three Local Enterprise Partnership areas of Manchester, Cheshire and Warrington, and Liverpool was seen as being of particular strategic importance, as well as the recent investment committed by GSK in Cumbria. Stakeholders were keen to see more collaboration that is effective across these administrative areas and a much better articulation of a pan-North West proposition. Nevertheless, the North West was described as being ‘different’ to the Golden Triangle and central Scotland belt, which were identified as the other main locations for leading-edge Human Health Science related activity. A couple of interviews commented on the scope for linking together a Northern Offer – Liverpool, Manchester, Alderley Park, Keele, Leeds, and Newcastle – and the potential strength of offer that this would provide (although it would still not match that of the Golden Triangle).
5.62 More specifically, it was felt that the North West was able to offer a ‘different’ offer given that it had well-established bio-manufacturing strengths (e.g. at Macclesfield and south Liverpool) as well as significant R&D and academic/clinical expertise.
Implications for Alderley Park There is a distinctive cluster in Life Sciences in the North West of England, which is congruent. with a focus on Human Health Science at Alderley Park.
Concentrations of Life Science activity in Manchester and Liverpool, and the more distributed network of activity in Cheshire and Warrington, are key elements to the
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cluster. The offer is, however, ‘different’ to that o f the Golden Triangle and the central belt in Scotland. Exploiting this difference will be important.
The region’s general heritage in manufacturing, linked with its significant capabilities in bio-manufacturing, is an important aspect of the region’s Life Science offer that should be accentuated. Alderley Park and its facilities provide a platform for extending this. This might be augmented further by linking together a Northern Offer around Life Sciences.
But linkages between Alderley Park and the wider cluster need to be strengthened
5.63 When asked about the linkages between Alderley Park and the wider cluster in the North West, the dominant view amongst stakeholders was that, to date, these had been notably limited in scale, and reluctant in character. It was felt that AstraZeneca had typically developed relationships on a ‘commercial need’ basis, selecting the most appropriate partner on a global basis, as opposed to focusing on geographical proximity to the site.
5.64 Despite this, stakeholders were aware of some joint working between AstraZeneca teams at Alderley Park and the Cancer Research UK Manchester Institute (formerly the Paterson Institute at the Christie Hospital and part of the University of Manchester) and the Manchester Collaborative Centre for Inflammation Research (at the University of Manchester).
5.65 Going forwards, consultees were clear about the value and importance of developing R&D linkages further as the Human Health Science facility develops. Specifically, it was felt that opportunities to establish relationships with the region’s HEI base, NHS Trusts, as well as health charities should be explored and these could, over time, become powerful. Several stakeholders stated that they felt a lack of university and NHS activity on site would be limiting highly on the proposition’s offer. Understanding the sanguine messages in the next Section, this does highlight the challenge to the Task Force to work to exhaust fully co-location options. This should not be about gesture presences, but functional and reinforcing parts of the place’s new offer.
5.66 Private sector consultees offered some specific suggestions about how Alderley Park could seek to keep its specialist equipment up to date. One indicative idea was to persuade big and specialist instrumentation suppliers to develop a demonstration suite or a beta-testing service at Alderley Park. SMEs would use the equipment and the associated expertise at reasonable cost, in exchange for offering valuable feedback to the supplying company.
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Impl ications for Alderley Park Alderley Park does not have a strong reputation for engaging more generally with the North West Life Science cluster. This perception needs to be addressed – actually and presentationally. Promoting best kept secrets (e.g. the links with the Cancer Research UK Manchester Institute and the Manchester Collaborative Centre for Inflammation Research) could be part of this.
Alderley Park must be an active and integrated member of the region’s Life Science ecosystem going forward. Opportunities to develop site-to-partner linkages (e.g. to the sub-region’s HEI base, NHS Trusts etc.), need to be progressed, especially so where there is little prospect of these partners having a physical preference at the facility.
And some key challenges will need to be overcome
5.67 Whilst highly supportive of proposals to develop a bioscience park at Alderley Park, some of the consultees based outside of the North West observed that a number of remaining key challenges would need to be overcome in order to maximise the opportunity. Specifically, the following issues were raised:
• Access to large-scale venture capital and start-up finance remains problematic outside of the Golden Triangle, although it was suggested that North Cheshire and south Greater Manchester in particular, were arguably in a more advantageous position than many other parts of the UK. Access to sufficient venture capital could be a key constraint to firm quantity and quality.
• Although the situation was improving, it was felt that there was still a lack of highly skilled and experienced management teams within the North West Human Health Science cluster.
• Given the scale of Alderley Park and the significant management resource required for the day-to-day operational management of the site, not to mention the costs associated with any necessary demolition work, the future owners are going to have to take a long-term perspective. Consultees were confident that there would be demand for space at Alderley Park but occupancy levels would build up over time and it could take upwards of 15 years to fill the site.
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Implications for Alderley Park In ensuring Alderley Park’s forward success, there are some key challenges. Inter- alia , these include:
• Access to large-scale venture capital and start-up finance, to drive business volume and quality
• A lack of highly skilled and experienced management teams within the region’s Human Health Science cluster to build and grow firms
• The need for a long-term view in repurposing the site.
71 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report 6. Qualitative Perspectives on Demand – the particular case of HE and Research Institutes
6.1 A key element of the Study Brief was to undertake a ‘soft’ market test on current and future requirements of HE and research institutions across the UK but specifically within the North West region, and to assess the potential of Alderley Park against the wider science offer.
6.2 In this Section, and as a more fine-grained complement to the wider qualitative depiction of demand set out in the preceding Section, the headline observations and views elicited from HE and research institution consultees are summarised.
Setting the scene
6.3 There are 27 Universities in the North of England – 12 in the North West, five in the North East and 10 in Yorkshire and the Humber. The North West universities alone produce 25,000 Science and Technical Graduates each year. In the 2013 University League Tables, both Manchester and Liverpool featured highly in Biological Sciences and Medicine, and are part of the elite Russell Group of top research-led universities. The North is also home to the N8 Research Partnership, formed as an integral part of The Northern Way initiative, which is a collaboration of the eight most research-intensive universities in the North of England: Durham; Lancaster; Leeds; Liverpool; Manchester; Newcastle; Sheffield; and York. Working widely with industry, N8 aims to maximise the impact of this research base by identifying and coordinating powerful research collaborations across the North of England and beyond.
6.4 The sector, particularly in the North West, has benefited from a strategic and sustained public sector investment over the years to create an extensive infrastructure for the region. As well as the North West being recognised as one of the UK's Exemplar Regions for Clinical Trials, the region has 73 hospitals including Europe's largest cancer centre at The Christie, and the largest clinical and academic campus in Europe at Central Manchester. In addition, the region hosts the UK Biobank, the largest tissue repository in the world, with over 500,000 human samples, generating a unique database for future research into major diseases. As a whole, the North of England has over 60 Centres of Excellence supporting various aspects of clinical research and development, of which 29 are located in the North West. These centres support activities in areas such as cancer research, new drug design, biopharmaceuticals, clinical trials, and drug safety.
The operating realities for HE . . .
6.5 Universities will only consider off-campus space (such as that available potentially at Alderley Park) if it is required for specific purposes. This means there is considerable uncertainty over the sector’s interest in sites and facilities, such as Alderley Park. Routinely, the most likely uses are to accommodate spin-out companies and research activities. Teaching, especially at the undergraduate level, will invariably be restricted to campus locations as students need to access educational and social facilities. Off-campus activities, and staff, would also be too specialised to provide a full teaching programme, and so the travel involved for students and staff would not be feasible. Alderley Park would therefore not be suitable for mainstream
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teaching accommodation, and so the increase in student numbers announced in the Autumn Statement is not relevant (and, in any case, the numbers are probably too small to generate significant demand for space).
6.6 Typically, the vast majority of university spin-outs (and spin-ins) will look first to university accommodation and there is currently space available at all the universities in the region. The numbers are in any case small: in 2010/11 there were 13 spin-outs from universities in the region 16 .
6.7 The main university interest is, therefore, likely to arise from research activities. Research has, compared to many other areas of public expenditure, fared well since 2010, with overall spending roughly constant in cash terms, and the life sciences sector has been identified as a priority area by the government. Science capital funding is set to increase by £500 million (in real terms) in 2015-16 and the 2013 Autumn Statement states that “the government will produce a Science and Innovation Strategy for Autumn Statement 2014. Central to this will be a roadmap of how the government’s long-term commitment on science capital announced at Spending Round 2013 will deliver the research and innovation infrastructure.” The increase could stimulate a demand for additional accommodation but this is still uncertain, and scientific areas in which such investment might take place even more so.
Implications for Alderley Park It is highly unlikely that Alderley Park has a role to play in hosting university student teaching. By contrast, it does have potential to accommodate HE spin-outs from elsewhere in the North West and the wider UK, although the reality is that the opportunity to capture these firms will be at that stage in their growth cycle where originating organisational ties can be cut with confidence. The number of spin-out firms likely to be involved in any event is not large, the choice of competitor sites elsewhere in the North West (or across the UK) is likely to be significant (given that such firms are likely to be past the incubation/early start stages), so this component of the potential tenant mix at Alderley Park is likely to be modest. It should not be forgotten about, but neither should its quantum be overstated. SQW’s Demand Model recognises this.
The relocation of research activity has clear potential, not least around specific equipment and facilities at Alderley Park. However, as above, the situation is uncertain. This said, the alignment of the site coming to market with the forthcoming development of the national Science and Innovation Strategy in 2014 is helpful, and an opportunity of coincidence that the Task Force will want to leverage actively for Alderley Park’s benefit. Additionally, there is a live opportunity for Alderley Park. The Northern Health Science Alliance (NHSA) has identified Alderley Park as the laboratory location as part of a collaborative bid to host the Diagnostics for Stratified Medicine Catapult in the North West.
16 Higher Education Business and Community Interaction Survey. This figure excludes graduate start-ups.
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. . . and for research institutions?
Research Councils
6.3 The Science Budget is, in the main, allocated by the research councils and the Technology Strategy Board 17 . Whilst recognising the potential linkages role to the work of the EPSRC, the most relevant research councils are the BBSRC and the MRC. Both support Centres and Institutes that are based at universities or ‘free standing’ locations. All research councils produce five-year delivery plans, coincident with the Comprehensive Spending Review (CSR) period, with the current plans running to 2015. Neither Council is contemplating the creation of a new institute and it is highly unlikely that they will in the future. Both are also planning to further increase the concentration of their funding:
The peer review system has already led to a very high level of concentration of MRC extramural funding in a small number of HEIs (~20); demand management solutions, promotion of shared use of large equipment, and the focus on centres of excellence will lead to further concentration, particularly as HEIs collaborate and/or develop novel strengths 18
By the end of the CSR period we anticipate that over 90% of our research funding will be in fewer than 30 UK bioscience institutions 19
6.4 Further concentration of funding could lead to more collaboration between universities and equipment sharing, but it is likely in general terms to lead to more investment on (or close to) existing campuses rather than new sites or locations. This recognised, the Cockcroft Institute at Daresbury, and the University of Manchester’s Jodrell Bank Observatory both show how off-campus models can work – however, both of these facilities are posited on co-location of activity with ‘big science’ assets, which Alderley Park does not have.
6.5 There is one possible exception to this. As part of a larger ‘Synthetic Biology for Growth Programme’, the BBSRC in collaboration with the EPSRC launched a Call for Proposals earlier this year to establish up to six multidisciplinary Synthetic Biology Research Centres over two years 20 . Whilst this Call is now closed, it is likely that chosen locations will be within university campuses: accordingly, immediate prospects for Alderley Park will depend on the bids that have been submitted. However, this is the ‘beginning’ in terms of national capability building and it may be an area of potential for Alderley Park, specifically in supporting the commercialisation of research output through innovative SMEs.
Implications f or Alderley Park As things stand at present, neither of the two most relevant research councils – BBSRC and the MRC – are considering new institutes, and it is highly unlikely that they will in future. Alderley Park should, therefore, not in any way bank on these sources as future streams of demand.
17 The Higher Education Funding Council for England (HEFCE) also allocates “QR” funding to the universities. This is a formulaic allocation based on quality and scale and is unlikely to change substantially over the short to medium terms. 18 MRC Delivery Plan 2011/12 to 2014/15 19 BBSRC Delivery Plan 2011 - 2015 20 http://www.bbsrc.ac.uk/funding/opportunities/2013/synthetic-biology-research-centres.aspx
74 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
This said, Alderley Park will want to remain agile and foresighted in this area. For example, a possible opportunity could present for Alderley Park flowing from the EPSRC’s Call to establish up to six multidisciplinary Synthetic Biology Research Centres over the next two years. Whilst the Call for Bids closed formally in July 2013, work might now be initiated usefully by the Task Force to position Alderley Park as a potential location for such activity, as the assessment of proposals and their options unfolds.
The Technology Strategy Board
6.6 The situation with TSB is different. TSB is concerned with innovation rather than research and it funds a very wide range of programmes and activities. Of particular interest is the Catapult programme. Bringing together academic scientists and businesses in defined locations, seven have so far been launched with significant differences in both scale and modus operandi. It was announced in June of this year that a Catapult in Diagnostics for Stratified Medicine would be launched. TSB is, at present, consulting on what form the Centre should take and it will be some time before a call for proposals is launched. As referred to elsewhere in the report, Northern Health Science Alliance (NHSA), involving Liverpool and Manchester universities, and NHS partners is considering a bid for the new Centre, and Alderley Park has been proposed as a potential physical hub. Allowance for success in securing the Catapult has been made for in SQW’s Demand Model.
6.7 This said, it is important to emphasise the uncertainty at present surrounding this initiative:
• As mentioned above, it is not clear when the call for proposals will be made or how the Centre will be structured (and therefore the accommodation requirements)
• It will be a competitive process
• There is no guarantee that NHSA would select Alderley Park as a location or partial location. Our consultations indicate that for some kinds of medical research, including Stratified Medicine, ready access to patients for testing and trials is required. Alderley Park cannot deliver this and urban locations close to teaching hospitals are much more attractive.
6.8 Mention has been made earlier of the proposal from TSB’s Specialist Interest Group on formulation to establish a new national formulation centre. Thinking on the proposal is at a fairly advanced age, but it warrants attention by the Task Force given the situation and potential at Alderley Park.
Implications for Alderley Park The TSB progresses, and is responsible, for a wide range of initiatives and programmes. Potentially, it is a very important target for Alderley Park and its Human Health Science intents. Stakeholders and management at Alderley Park will
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want to maintain a high degree of alertness and agility in sensing and responding to new opportunities that TSB might come forward with in future.
There are two TSB opportunities in play, which the Task Force should oversee and progress actively:
• The Catapult in the area of Diagnostics for Stratified Medicine is a clear, present, and highly relevant opportunity for Alderley Park, which its stakeholders (rightly) have moved swiftly to exploit. Progressing this bid should remain a key priority.
• The intention of the TSB’s Formulation Special Interest Group to establish an open access innovation space for advanced formulated product design and manufacture.
6.9 Charities are also major funders of medical research and we have also considered the Wellcome Trust and Cancer Research UK (CR UK). Again, there is nothing in their public plans and strategies to suggest that they might generate a demand for space at Alderley Park. Indeed, their investments tend to follow evidenced research and activity, which puts a new Alderley Park at a disadvantage until this builds. In addition, the distance from patients mentioned above is a consistently recurring issue. In addition, CR UK has cut back on some research areas and its strategy is to channel funding through its existing five institutes and 18 centres (some of which are in the NW), rather than establish new ones.
Implications for Alderley Park On charities, there is no evidence in the plans and strategies of appropriate targets to suggest a requirement for the sorts of facilities that will become available at Alderley Park. Stakeholders and management should, therefore, not in any way bank on these sources of future demand.
Again, however, Alderley Park will want to remain agile and foresighted in this area, to move quickly and effectively when opportunities are intimated.
An important potential lead
6.10 This discussion is not meant to suggest that universities will never be interested in accommodation at Alderley Park. Indeed, consultations undertaken to progress this particular part of the study did identify one potential use. The N8 Research Partnership, referred to above, has been discussing concepts of shared use of all high-field NMR instruments sited across the N8 region. This proposed shared facility and network will benefit from the N8’s leading experience in shared equipment assets and facility management and provide ultra-high resolution NMR capability to UK scientists and collaborating industrial teams. There are opportunities to link this proposed network of facilities to life sciences
76 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
businesses and infrastructure based at Alderley Park, to form an ecosystem across the North of England. The Task Force will want to be alert to this, and ensure that efforts are brought to bear to progress this clear lead.
6.11 However, it should again be emphasised that this is far from an actual demand at present. The initiative is also connected to a large bid to government from the University of Manchester, for funding for a new high-powered NMR machine of higher quality than exists at Alderley Park. The relationship N8 might wish to have with Alderley Park would depend on the outcome of this bid.
Implications for Alderley Park Pan-regional discussions are underway regarding the use of high-field NMR instruments across the North West, Yorkshire and Humber, and North East regions, covered by the N8 university partnership. The thinking on this is quite well developed. There is a clear opportunity, breaking sooner rather than later, to link this proposal to the existing NMR infrastructure at Alderley Park, and appropriate Life Science firms who may locate potentially there.
The Task Force will want to be alert to this opportunity, and ensure that it is progressed. Appropriately positioned, this link could endow Alderley Park with a significant differentiator, as well as providing a further mechanism for integrating the facility into the wider science network in the North of England.
77 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report 7. Projection 2 - A Revised Perspective on Demand
7.1 In light of the qualitative evidence presented in the preceding section, the report now sets out a revised quantitative assessment of demand using an updated version of the Demand Model. The underlying structure and logic to the Model has not changed, but in some areas, amended assumptions and additional data, informed by evidenced feedback captured through an extensive programme of senior-level stakeholder consultations, have been used.
7.2 As outlined in Section 4 with Projection 1 , the modelled demand numbers presented below should be used carefully.
7.3 A more in-depth description covering the assumptions used to drive the Model is presented in Annex B. However, key assumptions which were revised in the light of the stakeholder feedback and the estimated demand figures they have given rise to, are set out below.
The Results
Projection 2: post stakeholder calibration
7.4 In the period 2013 to 2030, the updated Model projects demand for 67k sq. m of space, of which 22k sq. m is ‘Office Only’ and 45k sq. m is ‘Lab and Office’.
Table 7-1: Projection 2 – a revised assessment of demand (post stakeholder calibration) Year Cumulative Occupancy (sq. m Net Lettable Area) ‘Office Only’ ‘Lab and Office’ Total 2013 0 3,300 3,300 2014 1,158 7,092 8,250 2015 2,812 11,383 14,194 2016 12,395 21 15,168 27,564 2017 13,171 17,556 30,727 2018 13,942 19,984 33,926 2019 14,670 22,215 36,885 2020 15,396 24,427 39,823 2021 16,122 26,648 42,770 2022 16,849 28,868 45,717 2023 17,577 31,109 48,686 2024 18,229 33,115 51,345 2025 18,880 35,116 53,996 2026 19,531 37,116 56,648 2027 20,182 39,117 59,299
21 It is important to note that the SQW Demand Model assumes that AstraZeneca will lease the entirety of Blocks 1 and 11 (office space) for 700 retained staff, and therefore a 8,400 sq. m Net Internal Area has been used from 2016 onwards. If any subsequent lease agreement uses a Net Lettable Area, then the 8,400 sq. m figure could be reduced significantly.
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Year Cumulative Occupancy (sq. m Net Lettable Area) ‘Office Only’ ‘Lab and Office’ Total 2028 20,833 41,118 61,951 2029 21,484 43,118 64,603 2030 22,136 45,119 67,255 Source: SQW, Alderley Park Demand Model
7.5 Over the period, this translates to an annual additional demand of 3.7k sq. m per annum . As the chart below shows, there is significant movement around this average over time, as supply is released and then the demand pattern settles down.
Table 7-2: Projection 2 – a revised assessment of demand at Alderley Park (post stakeholder calibration)
80000 sq.m
70000 sq.m
60000 sq.m
50000 sq.m
40000 sq.m
30000 sq.m
20000 sq.m
10000 sq.m
0 sq.m
Year
"Office Only" "Lab and Office"
Source: SQW, Alderley Park Demand Model
7.6 The modelled demand numbers presented above seek to take account of existing and pipeline supply within the defined supply-side study area. That said, whilst the wider supply on offer elsewhere within the UK and internationally has not been reviewed in detail as part of this study process, the Demand Model has sought to take some account (in headline terms) of this wider provision.
7.7 Therefore, the Projection 2 figures can be seen as estimates of net demand. However, it is important to note that they are based on the assumption that the facility is brought forward in a highly differentiated manner e.g. the suite of sophisticated technical scientific facilities and the on-site operational expertise at Alderley Park are retained for the future and the quality of the site infrastructure is maintained. If this is not the case, the net demand figure is likely to fall significantly, as Alderley Park loses out to competitor sites, and the assumptions that underpin the Demand Model will need to be updated accordingly.
7.8 More specifically, under Projection 2 , the Model has been based on the following key assumptions:
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• Mix of demand assumed to be 90% lab & write-up and 10% office space for new-starts
• Mix of demand assumed to be 66% lab & write-up and 34% office space for established firms
• AstraZeneca will retain 700 staff on-site in Blocks 1 and 11, thus occupying 8,400 sq. m of space (c12% of the total cumulative take-up)
• The existing level of occupancy (as of December 2013) at the BioHub is 3,300 sq. m
• 30 new start-up businesses will be created during the initial phase of the scheme by former AstraZeneca employees and they will grow (on average) at 20% per annum
• c.600 sq. m of space will be occupied through successful FDI projects per annum
• 20% of North West Life Science spin-outs will be captured by Alderley Park per annum
• Alderley Park will be home to the Diagnostics for Stratified Medicine Catapult, occupying 930 sq. m of space (50% office and 50% laboratory)
• 14 jobs from North West HEIs and a further 7 from other HEIs elsewhere in the North and Midlands will be attracted to Alderley Park per annum
• The failure rate (and relocation) of start-ups at Alderley Park is 10%
• The failure rate (and relocation) of established firms at Alderley Park is 2.5%
• Decay in gross external demand (the percentage reduction in the annual demand figure as a result of a reduction of the marketing effort, loss of novelty and/or entry of alternative offers etc.) of 5% during 6-10 years and 15% in 11-15 years
• No take-up has been assumed for a Synthetic Biology Research Centre or TSB’s Formulation Special Interest Group’s open access innovation space for advanced formulated product design and manufacture, as these proposals are still in their infancy.
80 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report 8. The Story of Existing and Pipeline Supply
8.1 This section provides a high-level assessment of existing and pipeline supply of laboratory and office accommodation for bioscience firms within a 45-mile 22 radius of Alderley Park, and with which Alderley Park could, potentially, be in competition. Specifically, the volume and nature of this supply is considered, and this is compared with the potential offer of a Life Science-focused science facility at Alderley Park.
Scale of Supply
8.2 Analysis of the supply of existing accommodation focused towards the Life Sciences within the defined supply-side study area (see Figure 8-1 for details) reveals that a significant amount of office and laboratory space currently exists (more than 90,000 sq. m in total). It covers a mixture of both incubation and grow-on space, across key sites including Manchester Science Park, the Core Technology Facility, the Manchester Bioscience Incubator, the Heath Business and Technical Park, Sci-Tech Daresbury, the MerseyBIO incubator and Liverpool Science Park. This analysis does not provide an exhaustive list of all the science parks and incubators located within a 45-mile radius of the study area. Instead, there is a specific focus on those facilities that have targeted firms within the Life Sciences and have developed their accommodation and support service offers with the needs of the sector in mind.
8.3 The mapping and review work reveals that some of the identified schemes are relatively modern and some are much older. Similarly, some sites are located in city-centre environments close to NHS Trusts and university Life Science departments, whilst others are based in out-of-town locations, often near to motorway junctions.
8.4 Looking to the future, the amount of accommodation focused towards occupiers from within the Life Sciences is expected to increase substantially, as pipeline developments (estimated to total c.250k sq. m) are brought forward. Some of these schemes are expected to come to market in the short-term (such as the 4,100 sq. m Liverpool Bioinnovation Hub, which is scheduled to open in the Summer 2015), whilst others (such as the Manchester MediPark, Liverpool Bio-campus and the Sci-Tech Daresbury expansion – potentially adding up to c.180k sq. m in total) involve much longer-term time horizons. Similarly, at this stage, it is not clear what impact the successful development of a science park facility at Alderley Park would have on this wider potential future supply – particularly if the various schemes were not sufficiently differentiated from one another.
22 The tightly defined geography for the supply-side mapping exercise was agreed with the study’s Executive Group. It should be noted that for the demand-side assessment, it has been assumed that Alderley Park will attract occupiers from across the UK and overseas.
81 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
Figure 8-1: Map of existing/pipeline supply within a 45-mile radius of Alderley Park
Source: Produced by SQW, December 2013. Contains Ordnance Survey data (C) Crown copyright and database rights (2013). Licence number 100030994
82 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
Table 8-1: Existing/pipeline supply within a 45 mile radius of Alderley Park 23
Location Existing (sq. m) Pipeline (sq. m)
Total Office Lab & Total Office Lab & Total write-up write-up
1 Manchester Science Flexible laboratory and office space, accommodating over 160 22,300 13,380* 8,920* 23,000* 13,800 9,200* 45,300 Park (main site) companies. Includes MedTech incubator, meeting rooms and event space, together with access to Manchester universities and NHS hospital trusts.
2 Manchester Incubator There are 16 turn-key laboratory suites at the facility, each 93 sq. m, 9,300 7,800 1,500 N/A 9,300 Building comprising write-up and wet-lab areas, equipped for functioning at ACGM Containment Level 2.
3 The Core Technology The CTF provides four modular laboratories comprising write-up and 16,000 9,600* 6,400* N/A 16,000 Facility Manchester wet-lab areas, equipped for functioning at ACGM Containment Level 2 with the capability of conversion to Level 3 if required. There are also four “flexi-lab” areas, each offering 500 sq. m of additional space for grow-on of either wet-lab or office.
4 Citylabs Manchester Key proposed features include wet labs, specialised research N/A N/A N/A 8,700 0 8,700 8,700 (part of Manchester facilities, meeting rooms, break out areas and teaching facilities. Science Parks) Training rooms, offices, media rooms, as well as a café and catering facilities are also provided.
5 Manchester MediPark The proposed Medipark will benefit from the Enterprise Zone status N/A N/A N/A 46,500 27,900 18,600* 46,500 at Airport City as well as access to UHSM NHS Trust. The site covers almost 80 hectares and will provide low density accommodation for health-based and Life Sciences businesses.
6 Liverpool Science The Science Park comprises two buildings, with a third currently 7,400 6,500 900 3,700 2,800 900 11,100 Park under construction and this will provide a further accommodation when it opens in 2014.
7 MerseyBIO incubator A high quality facility for developing biotechnology businesses that 930 230 700 N/A 930 consists of Category 2 laboratory units and offices.
8 Liverpool The proposed facility will include a mxi of lab and associated write-up N/A 4,100 4,100 4,100 Bioinnovation Hub space for bioscience SMEs, as well as the University of Liverpool’s biobank centre.
23 It is worth noting that there are several other large existing and proposed employment sites within the supply-side study area which could accommodate more generic R&D and related uses, such as Liverpool Innovation Park, Thornton Hough Technology Campus or the former Shell chemical works in Trafford.
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Location Existing (sq. m) Pipeline (sq. m)
Total Office Lab & Total Office Lab & Total write-up write-up
9 Liverpool Biocampus The campus will be co-located with the new build Royal Liverpool N/A N/A N/A 46,500* 27,900* 18,600* 46,500 Hospital within Liverpool’s Knowledge Quarter. It will provide access to a concentration of academic research, industry and healthcare provision, collaborating in health related research and clinical trials.
10 Liverpool Materials The proposed facility in the Knowledge Quarter will focus on N/A N/A N/A 8,300* 4,980* 3,320* 8,300 Innovation Factory molecular manufacturing and materials, in particular the analytical technologies of genomics, proteomics and metabolomics.
11 Daresbury Innovation The site has national expertise in such fields as: synchrotron light 5,500 4,500 1,000 90,000* 54,000* 36,000* 95,500 Centre & Vanguard exploitation; accelerator science; advanced instrumentation; House advanced engineering; high performance computing (Hartree Centre); nuclear physics; and modelling and simulation.
12 The Heath Business The site is home to c.150 organisations from a broad spectrum of 12,000 7,200 4,800 12,000* 7,200* 4,800* 24,000 and Technical Park, business sectors, ranging from forensic science, IT specialists and Runcorn biomedical firms to business consultants. The site was formerly owned by ICI.
13 Leeds Innovation Space at the Innovation Centre comprises fitted-out laboratory, write- 2,000 2,000 N/A N/A N/A 2,000 Centre up and storage areas with access to shared support services and facilities.
14 Leeds Bioincubator The bio-incubator contains four labs, each of which has a variety of 300 300 N/A N/A N/A 300 facilities including, a sink safety station, fume cupboard, write-up area, secure storage space, and shared facilities.
15 Sheffield Bioincubator Facilities include 15 fully flexible ACDP category two wet labs, one 2,700 1,080 1,620 N/A N/A N/A 2,700 dry laboratory space, one radioisotope suite and a dark room.
16 Keele University Located in North Staffordshire, the park provides around 14,000 sq. 14,000 12,200 1,800 6,000 3,600* 2,400* 20,000 Science & Business m of commercial mixed use accommodation in a campus-style Park setting.
Total 92,430 64,490 27,9 40 24 8,800 14 2,180 106,620 341,230 Source: SQW
84 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
8.5 The key headlines from the mapping work are set out below:
• c.64,500 sq. m of relevant office space currently exists
• c.27,900 sq. m of relevant laboratory and associated write-up space currently exists
• c.142,200 sq. m of relevant office supply is in the pipeline
• c.106,600 sq. m of laboratory and write-up space is in the pipeline.
8.6 Despite significant pressing, the majority of the potential competitor sites were unwilling to provide SQW’s study team with robust data on current occupancy levels. However, drawing on the wider consultation evidence, the study team’s tacit knowledge, and past research reports in the public domain, it is possible to estimate the amount of unoccupied space available across the 12 existing sites as they currently present. The dominant view amongst stakeholders was that occupancy levels currently range from around 70% to 90% at most of these local facilities. If we assume that 20% of the total existing supply is currently available to the market, this equates to c.18,000 sq. m.
The Nature of Supply
8.7 While other sites within the defined supply-side study area offer similar facilities and services to certain aspects of the offer available at Alderley Park, overall, it is evident that a future science park at Mereside would form a unique proposition in a North of England context. Assets that make this the most complete and comprehensive package of any competitive science park include: access to specialist scientific equipment and expertise; the provision of communal networking spaces; expert mentors/business support within a tailored incubation environment; in-vivo facilities (for experimentation using whole living organisms); state of the art imaging suites; modern biology and chemistry labs (there is a shortage of full specification chemistry and biology lab provision across the North of England and much of the existing provision is not equipped); as well as the on-site conferencing, car parking and restaurant facilities etc.
8.8 The combination of these assets at Alderley Park differentiates the site from key competitors in the wider region, as shown in Table 8-2, which rates each asset as either green (excellent provision), amber (good provision) or red (minimal to no provision on-site). Some of these facilities, like the in-vivo blocks, the high density units or the high-throughput screening facilities, are particularly rare among similar science parks in a UK context. The technical equipment at Alderley Park is also not widely available, particularly the imaging tools like the on-site NMR and PET scanners. Alderley Park also houses the “Biobank” facility, a large scale DNA archive.
8.9 Specialist equipment is another key appeal for several sites. Sci-Tech Daresbury has a particularly strong offer in terms of specialist equipment and access to the high performance computing capabilities at the Hartree Centre, although the site’s offer is aimed at a broader range of sectors and technologies than is the case at Alderley Park.
8.10 The Liverpool Materials Innovation Factory development (due to open in 2015) could also provide a significant draw for companies, with a variety of specialist equipment, like high-
85 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
throughput screening capabilities, although the exact specifications of the facilities available are yet to be confirmed. The Liverpool Bioinnovation Hub could provide some competition in this area too, as the facility will offer support in achieving the conversion of intellectual property from research into business opportunities, supporting university spin-outs and academic research. However, the facility will primarily be aimed at providing expansion space for university or NHS spin-outs who are seeking to remain within a city centre location. In this respect, the offer for the proposed development will be very different to that available at Alderley Park.
8.11 The offer at the Manchester-based incubators and science parks is also likely to provide some competition for Alderley Park in the future. Facilities like the Manchester Incubator Building, and the Core Technology Facility have some cross-over with Alderley Park, but are more targeted towards companies that require a city-centre location, with proximity to the NHS, patients and health-related charities, as well as the universities. Typically, these facilities will be ideally suited for university or NHS spin-outs, as well as other early stage firms. Also in central Manchester, within the so-called ‘Corridor’, Manchester Science Park offers a larger amount of space, some of which is targeted towards the Life Sciences, although the current tenant mix covers a wide range of sectors and technologies, including ICT.
8.12 The Manchester MediPark is expected to be ‘an internationally significant health and biotech commercial enterprise directly linked to the healthcare innovation of the Manchester Academic Health Sciences Centre’. It is envisaged that the scheme, with the potential to cover up to 80 hectares of land, will form an important component of Manchester’s Airport City concept. The Airport City Framework Plan describes MediPark as being a second ‘anchor’ within the Enterprise Zone. The MediPark will also be closely related to University Hospital South Manchester (UHSM), which has a particular reputation in the areas of cardiology, cardiothoracic surgery, respiratory medicine, wounds, burns and breast care. Given its out- of-town location, adjacent to the hospital, Manchester Airport and the M56 motorway, the MediPark is likely to be attractive to more mature, well-established firms seeking a lower density environment than a city centre. The proposals for the MediPark include some mixed- use development including a hotel and training facility for NHS staff, and is likely to be highly differentiated from Alderley Park with a focus on clean manufacture, clinical evaluation and training. Importantly, at present, there is no speculative office or laboratory space envisaged at MediPark. Nevertheless, given its geographical proximity, the MediPark scheme has the potential to provide some competition to Alderley Park if the differentiation is not maintained going forwards.
8.13 While all the sites reviewed offer space that is suitable for Life Science companies, there are several facilities that have specifically tailored their offer to meet the needs of the sector, often providing a more sophisticated proposition than more generalist competitors like Liverpool Science Park and Manchester Science Park. For example, the Manchester Incubator Building and the Core Technology Facility are both located adjacent to the University of Manchester Life Sciences department and are specifically marketed towards the sector. As with Alderley Park, tenants are able to access specialist equipment and services, but the accommodation is focused towards early stage firms.
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Table 8-2: Key existing/pipeline facilities within 45-miles of Alderley Park
facilities support support Pilot Pilot plant equipment Communal Communal In-vivo In-vivo On-site access to access On-site Life Science focus Science Life networking spaces networking Rental of specialist specialist of Rental Access to business to Access business specialist specialist equipment Alderley Park ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
1 Manchester Science Parks (main site) ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
2 Manchester Incubator Building ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
3 The Core Technology Facility Manchester ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
4 Citylabs Manchester ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
5 Manchester MediPark ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
6 Liverpool Science Park ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
7 MerseyBIO incubator ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
8 Liverpool Bioinnovation Hub ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
9 Liverpool Biocampus ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
10 Liverpool Materials Innovation Factory ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
11 Sci -Tech Daresbury ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
12 The Heath Business & Technical Park, Runcorn ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
13 Leeds Innovation Centre ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
14 Leeds Bioincubator ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
15 Sheffield Bioincubator ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ
16 Keele University Science & Business Park ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ ƒƒƒ Source: SQW
Implications for Alderley Park
The mapping work reveals that there is a significant volume of science park and incubation provision within the supply-side study area. The accommodation is predominantly office-based (64k sq. m), but several sites also offer some laboratory provision (c36k sq. m). The majority of the lab-based accommodation is accounted for by biology labs and there appears to be a lack of specialist space suitable for chemistry.
It is clear that Alderley Park provides a relatively unique offer compared to the rest of the sites surveyed. At 80,000 sq. m, it is by some distance, the largest of the sites. The next biggest facility is Manchester Science Park, at 22,300 sq. m, followed by The Core Technology Facility (16,000 sq. m) and The Heath Business and Technical Park (12,000 sq. m). However, of these large-scale sites, only the Core Technology Facility is dedicated solely to the Life Sciences, with the others targeting a broader mix of sectors.
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There are several large -scale new developments or expansion projects planned for the North West, which could have a significant impact on the scale and nature of supply in the medium-term. For instance, Daresbury (90,000 sq. m), Liverpool Biocampus (46,500 sq. m), and Manchester Medipark (46,500 sq. m) all have ambitious plans in the pipeline. Whilst the detail of these schemes is patchy at this stage, there is scope elements of these offers to overlap with that of Alderley Park.
Given its geographical proximity to Alderley Park and scale (up to 80 hectares), the emerging offer at Manchester MediPark, situated adjacent to UHSM and Manchester Airport, could potentially act as a key ‘competitor’. It will be vital that Alderley Park is brought to market in a fashion which complements, integrates, and works with this other strategically important offer for the region.
The new owner of Alderley Park should be alert fully to these wider plans elsewhere in the region, and engage accordingly. At the same time, counterpart stakeholders from across the North West should aim to position their schemes as best they can so as to complement Alderley Park’s intent and offer. By driving maturely for differentiation and complementation in the these offers, genuine synergy should be realised for the Life Sciences cluster in the North West, and potentially the wider North of England.
88 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report 9. A Forward View of Economic Impact
9.1 In the complementary Volume 1 Report on economic impact, SQW provided an assessment of the current impact of AstraZeneca’s operations at Alderley Park, and what this might look like with 700 non-R&D staff remaining. The addition of the data from the Demand Assessment Model now allows for a more reflective assessment of the impact of the site going forward, as set out below.
Reprising the Economic Impact Assessment
9.2 The full methodology and logic behind the economic impact model can be found in the Volume 1. The economic impact assessment methodology examines three main aspects of the impact of AstraZeneca at Alderley Park:
• Direct : the impact of the salaries of the staff employed on-site.
• Indirect: the additional value of AstraZeneca operations through purchases of goods and services from businesses in the impact area, including energy, utilities, maintenance, other support services, capital expenditure and expenditure on contractors.
• Induced: These are the further impacts of AstraZeneca employees, who spend their incomes in the impact area’s economy – thereby helping to create further economic activity (and employment) in un-related industries.
9.3 The Volume 1 report set out the estimated impact of Alderley Park under two scenarios:
• Scenario 1: the current facility remains at AstraZeneca, with 2,800 employees, £29 million per annum spent on goods and services, £60 million per annum on capital spend, and £12.1 million on contractors.
• Scenario 2: AstraZeneca keeps 700 mostly administrative and finance staff at Alderley Park, with minimal revenue and contractor spending, and no capital budget.
Figure 9-1: Total impact of AstraZeneca at Alderley Park Current contribution 700 AZ staff Direct GVA per annum £269.1m £61.4m
Indirect GVA per annum £18.7m £1.1m
Induced GVA per annum £26.6m £7.4m
Total GVA per annum £314.4m £70m Source: SQW calculations
9.4 Summarising the Volume 1 conclusions, the current impact of Alderley Park is £314m per annum, equating to a discounted impact of £2.7 billion over the next 10 years. The analysis suggests that, post-disinvestment, with the 700 non-R&D roles only, the annual economic contribution of AstraZeneca at Alderley Park will be around £70m.
89 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
Looking Forward
9.5 As set out in the Chapter 7, the Demand Assessment Model estimates that if the Alderley Park site is brought forward in a highly differentiated manner, take-up of available space could reach 16,800 sq. m of office space and 28,900 sq. m of lab by 2022, equating to a total of 45,700 sq. m. The current tenants at the BioHub are included in the demand quantum.
9.6 Using standard employment use densities, the model assumes that office facilities will accommodate one job for every eight sq. m of floorspace, while laboratory will support one job for every 12 sq. m of floorspace (these densities are the same as those used in the SQW Demand Model).
9.7 The table below shows the yearly projected occupancy and associated job numbers over the next decade. The data suggest that the floorspace will accommodate an estimated 3,460 jobs in the non-AstraZeneca portion of the future provision, which raises to a total of 4,160 when the 700 remaining AstraZeneca positions are added in. It is important to note that the modelled figures presented below indicate that projected demand outstrips the supply of available space initially until AstraZeneca functions are moved from the site by 2017.
Table 9-1: Cumulative take-up and employment at Alderley Park over the period 2013-22 (excluding AstraZeneca employees)
Office Lab Total Floorspace Floorspace Floorspace (sq. m) Jobs (sq. m) Jobs (sq. m) Jobs 2013 0 0 3,300 280 3,300 280 2014 1,160 140 7,090 590 8,250 740 2015 2,810 350 11,380 950 14,190 1,300 2016 4,000 500 15,170 1,260 19,170 1,760 2017 4,770 600 17,560 1,460 22,330 2,060 2018 5,540 690 19,980 1,670 25,520 2,360 2019 6,270 780 22,220 1,850 28,490 2,640 2020 7,000 870 24,430 2,040 31,430 2,910 2021 7,720 970 26,650 2,220 34,370 3,190 2022 8,450 1,060 28,870 2,410 37,320 3,460 Source: SQW
9.8 The next step is to convert these job numbers into GVA. GVA is calculated by multiplying the total employment by a standard GVA per employee figure. It is likely that the GVA per employee for current AstraZeneca employees (£96,100) will be too high for new employment on-site, when considering how high-quality the current AstraZeneca facility and workforce are - AstraZeneca is a top-level, multinational Life Sciences company, and so provides significantly higher value employment. It is likely that future occupants will be newer and smaller firms, which will not be able to support the premiums in salary that AstraZeneca currently does, thus giving rise to a lower GVA per employee. As a result, SQW has assumed prudently that the GVA per employee in the future is more likely to be £60,000.
9.9 There is no information available to model the in-direct and induced impacts of future occupants, as was done in the analysis in Volume 1. Instead, a standard sub-regional multiplier of 1.21 has been used, based on the Evaluation Guidance provided by the Department of Business, Innovation and Skills. The annual data over a 10-year period have
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then then discounted at 3.5%, based on Treasury Guidance, and in compliance with the analysis in Volume 1.
9.10 The table below shows jobs and GVA by year after the multiplier and discount have been applied. In summary, this equates to a total of £184.4 million of impact per annum by 2022.
Table 9-2: Jobs and GVA per year at Alderley Park over the period 2013 to 2022 (excluding AstraZeneca employees) Office Lab Total
Employment GVA Employment GVA Employment GVA 2013 0 £0 280 £20m 280 £20m
2014 140 £10.2m 590 £42.9m 740 £51.6m
2015 350 £23.8m 950 £68.9m 1,300 £88.1m
2016 500 £32.7m 1,260 £91.8m 1,760 £115.5m
2017 600 £37.7m 1,460 £106.2m 2,060 £130.3m
2018 690 £42.4m 1,670 £120.9m 2,360 £144.1m
2019 780 £46.3m 1,850 £134.4m 2,640 £155.6m
2020 870 £49.9m 2,040 £147.8m 2,910 £166.1m
2021 970 £53.2m 2,220 £161.2m 3,190 £175,7m
2022 1,060 £56.3m 2,410 £174.7m 3,460 £184.4m
9.11 With the addition of the GVA from the 700 remaining AstraZeneca jobs (£70 million over 10 years), it is estimated that by 2022, the total aggregated GVA impact of the 4,160 jobs anticipated at Alderley Park will be £1.8 billion 24 , compared to the £2.7 billion figure had the existing AstraZeneca operation stayed as it was. However, this will be 10 years into the scheme and ‘new’ growth will arise in the future, further diluting the AstraZeneca contribution into the future.
9.12 As the take-up of space builds over time, so the annual impact will increase. The estimated impact of the site will be £235.8 million annually by 2022. The graph overleaf shows GVA over a ten year period, comparing the estimates of growth from the Demand Assessment, with the GVA impact of the current on-site AstraZeneca operation, and the ‘worst case scenario’ of 700 AstraZeneca jobs alone.
24 Of the £1.8 billion figure, about £600m is accounted for by the 700 remaining AstraZeneca staff, a not insignificant amount
91 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
Figure 9-2: Three scenarios of GVA impact: current AstraZeneca operation; 700 remaining AstraZeneca staff on-site; and the figures derived from the Demand Model Assessment
£3,000
£2,500
£2,000
£1,500
£1,000 GVA (milions) GVA
£500
£0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Demand Assesment Impact Current AZ Impact 700 remaining AZ staff
Source: SQW
9.13 Employment on-site will surpass the current level of 2,800 by nearly 1,400 jobs over the period. This appears to be credible, considering the fact that the site originally housed 5,000 employees and has seen a steady reduction of employment as operations have been downsized by AstraZeneca over the last decade. It is likely that a successful science facility will be able to surpass the quantum of current occupancy, considering the size of the site.
9.14 The site was also originally constructed with a relatively high proportion of floorspace to employees, in line with AstraZeneca’s operational approach. It is likely that, if the site operates as a more standard science park, the density of employment will be higher than originally planned by AstraZeneca, reflecting the likely commercial imperatives of the new owner.
Table 9-3: Employment and GVA impacts at Alderley Park Employment GVA per annum GVA 2013 -22 Current AstraZeneca 2,800 £314.4m £2.7 billion Operation
Demand Model Scenario 4,160 £235.8m £1.8 billion
Balance +1,360 -£78.6m -£900m Source: SQW
9.15 To summarise, the analysis indicates that the overall GVA impact from Alderley Park will decrease from the £2.7 billion that would have been provided by an ongoing AstraZeneca facility over the next decade to, £1.8 billion. This means that over the next 10 years, the GVA loss to the sub-region is £900 million.
92 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report 10. Conclusions and Recommendations
10.1 This final section sets out the study’s concluding thoughts and recommendations, based on the findings from the market assessment research and its analyses.
Conclusions
10.2 In light of the evidence presented in this report, the overarching conclusion from the study is that a high-quality science park development, focused on the ‘ Human Health Sciences, Technologies, R&D and processes ’ should be progressed at Alderley Park.
10.3 More specifically, the scheme should seek to build on Alderley Park’s well-developed heritage and USP as a major innovation hub for drug discovery and development, leveraging the specialist facilities and expertise retained on-site, as well as differentiating its offer clearly from potential competitor locations across the North of England.
10.4 Significant growth is projected across the Life Sciences, internationally and nationally, which provides some reassurance for, and a fair wind to, the Alderley Park proposals. Similarly, stakeholders are confident that with appropriate business support and access to start-up finance, a sizeable foundational cohort of new businesses could be fostered amongst former AstraZeneca employees.
10.5 Developing, and securing, commitment to a long-term strategic vision for Alderley Park is key. A review of the lessons from successful sites and bioscience locations elsewhere highlights the importance of underpinning and reinforcing wider cluster development activity. Similarly, whilst obvious concerns exist amongst regional stakeholders about the potential threat that Alderley Park may pose, a successful science facility which targets FDI and new in- movers to the North West, as well as supporting sustainable new starts, with distinguishing services, specialist facilities, and a potential residual AstraZeneca R&D function (in some form), could act as a differentiated and major platform for growing the cluster in the region and the wider North.
10.6 The delivery model for the site going forwards will undoubtedly have to be pragmatic and opportunistic, but at the same time sustained and committed to the long-term. The modelled demand data, reinforced by the stakeholder evidence, reveal that occupancy levels are likely to build over time at Alderley Park, but it could take upwards of 15 years for the currently envisaged footprint at Mereside to be occupied, potentially longer if strict entrance criteria are applied to maintain a clear sectoral and/or R&D focus. Over such a time horizon, there will be further market and technology change that may affect (positively or negatively) levels of demand. The development must therefore, be designed to sense intelligently and respond flexibly to these changes, as well as focusing on the long-term.
10.7 Whilst the evidence from this market assessment supports the case for developing a science park at Alderley Park, it also highlights the scale of the delivery challenge and the inherent tensions involved. On the one hand, an appropriate response to commercial realities will be needed – yes, the scheme must pay its way – but on the other, there will be the challenge of maintaining a focus and specialism that builds momentum, establishes reputation and,
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through clear differentiation, avoids unhelpful duplication with other facilities, especially those within the region.
10.8 The temptation in the short-to-medium term may be to maximise occupancy levels and rental returns. However, the evidence presented in this report suggests that this approach could be damaging for Alderley Park in the longer-term and crucially, the ‘bigger’ opportunity for further energising the North West Life Sciences cluster would be missed. This temptation, and the clear risk it embodies, needs to be avoided actively.
10.9 A consistent message running throughout the report, both in terms of the feedback from stakeholders and the lessons from the comparator review work, is the importance of bringing forward schemes (such as Alderley Park) in ways which are integrated with, and complementary to, the wider parts of the innovation ecosystems of which they are part. Doing so leverages existing strengths, optimises the prospects for synergy, and helps identify those areas of differentiation where particular facilities can excel. Going forward, Alderley Park and its operating model has to be characterised by reinforcement, differentiation, and collaboration with wider parts of the region’s innovation ecosystem. This will demand particular mind-sets, behaviours, and working styles from the site’s owner, operator, and support staff.
10.10 In framing Alderley Park’s particular role within the context of existing Life Science facilities in the North West (and more widely in the North), the following market segments are proposed:
• Indigenous small and medium-sized Life Science firms currently located in the North West who are seeking flexible second (or even third) stage accommodation to support further growth, usually after graduating from one of the incubation or grow-on facilities in the region. This may be once firms have secured an injection of capital (possibly following an acquisition by a larger UK or overseas firm) to drive rapid expansion or once they are no longer reliant on proximity to local HE and NHS assets. Importantly, Alderley Park should not seek to target tenants of these bio-incubators unless they are growth constrained within their existing accommodation and/or they require access to the specialist kit and expertise available at Alderley Park.
• Indigenous small and medium sized Life Science firms currently located elsewhere in the UK, who are seeking flexible second (or third) stage accommodation in the North of England.
• Large anchor ‘rainmaker’ companies based elsewhere in the UK who are seeking to expand their operations and/or enter the North of England market. This is likely to be dominated by those companies engaged in drug discovery and development who could be attracted by the on-site kit and expertise, but not exclusively. Indeed, the attraction of some medium or large-scale R&D occupiers, ideally on long-term leases, will be very important. Not only will this provide the site with a much-needed boost in terms of occupancy and rental income, but it will also help to build a critical mass of R&D activity, with which start-up companies and SMEs could actively engage. Additionally, the positive PR impacts associated with some early large-scale investments would be very helpful, not least in terms of signalling to the market that Alderley Park has an exciting future.
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• Inward investors looking to access UK (including the NHS) and European markets. Large-scale Life Science FDI projects should be targeted. As with the previous point, the facility is likely to be most attractive to those firms with a particular focus on drug discovery and development, leveraging the specialist kit and expertise available on- site.
• National (or international) research centres focused on the Life Sciences, for example the TSB’s Catapults, where to date the North West has not performed overly well.
10.11 If all these elements can be aligned correctly, the long-term prize is a significant one. The demand modelling work indicates that a successful and highly differentiated Alderley Park could (in gross terms) support the creation of up to 30 new start-up businesses from within the former AstraZeneca employee base (over the first three years post disinvestment), attract more than 100 high value jobs to the region from elsewhere in the UK (per annum), and more than 50 (again per annum) through FDI. In summary, these are major opportunities to grip and seize for the benefit of the sub-region, the wider North West, and indeed UK plc
Recommendations
10.12 Based on the totality of the report and its evidence base, 20 detailed recommendations (including suggested Leads for progressing each action) are provided below. These have been grouped into five overall ‘Progression Themes’. These are as follows, with their detailed underlying recommendations set out in more detail below:
• Progression Theme 1: Develop a long-term vision and strategy for Alderley Park
• Progression Theme 2: Build and sustain a highly differentiated offer at Alderley Park
• Progression Theme 3: Develop and integrate with the wider North West Life Sciences cluster
• Progression Theme 4: Maximise demand from the ‘AZ entrepreneurs’, and foster a sizeable start-up community
• Progression Theme 5: Meet the key delivery challenges.
Progression Theme 1: Develop a long-term vision and strategy for Alderley Park
1. A clear and focused statement of the intent that Alderley Park is ‘ opening for business ’ should be declared by the Task Force. This will inform the market and wider stakeholders that the site will have a targeted focus on Human Health Sciences, Technologies, R&D and processes, and will be progressed as a collaborative and integrated part of the North West of England’s Life Sciences ecosystem. [Task Force/successor body, and senior-level partners in the North West]
2. There is a very extensive body of experience in repurposing large-scale facilities such as those at Alderley Park. The Task Force and partners are recommended strongly to review this material early, and ensure that as detailed commitments and sale deals are entered
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into, these are informed by this learning. The unhelpful reinventing of wheels should be avoided. [ Task Force/successor body, and new site owner/operator]
3. A decision should be taken on the future strategic positioning of Alderley Park in the UK’s Life Sciences hierarchy– simply put, should Alderley Park be seen as part of the UK’s Premier League of Life Science locations (alongside Cambridge, Oxford, and the wider Golden Triangle) or should it be leading the First Division effort which complements this (alongside key assets in Scotland and the other regions)? The advice to the Task Force from this report is that the second of these options is the more flexible, and realistic, starting choice. [Task Force/successor body, new site owner/operator, key regional/city- regional/sub-regional partners (including the LEPs), BIS ]
4. Informed by Recommendation 8 below, it is recommended that a specific development vision and marketing strategy for Alderley Park be produced. It should describe unambiguously where Alderley Park will fit within the ‘map’ of Life Science activity regionally and at the level of the North England. These efforts should have a strong focus on setting and the differentiated offer of the facility, thereby helping to address current underlying partnership concerns, and reduce uncertainty. [ Task Force/successor body, new site owner/operator, sub-regional/regional partners, the North West Business Leadership Team, the emerging North West Life Sciences Group, and the two Academic Health Science Networks]
Progression Theme 2: Build and sustain a highly differentiated offer at Alderley Park
5. Retention of an active AstraZeneca R&D activity on-site would be a very powerful, and distinguishing, ingredient for the rebirthed site’s success. A commitment to an R&D office or ‘gateway’, which provides Park tenants with future access to AstraZeneca’s knowledge, R&D troubleshooting expertise, and international networks, would be an innovative solution. The Task Force is recommended to explore the feasibility of progressing this outcome with AstraZeneca. [ Task Force/successor body, new site owner/operator, AstraZeneca]
6. Effort and resource should be invested in attracting early, high profile ‘rainmaker’ anchor tenants, from across the UK or overseas, to kick-start the scheme, launch a culture of Open Innovation, and evidence the ‘open for business’ imperative. Partners are recommended to work together to make sure that strategically important investment projects are not lost to competitor locations elsewhere in the UK or Europe. As significant R&D functions are attracted to the site, this will go some way to offsetting the loss of high quality jobs, talent, and access to international networks caused by site disinvestment . [Task Force/successor body, sub-regional/regional partners, UKTI]
7. Whilst AstraZeneca remains at Alderley Park, there may be some firms who may be attracted to the facility specifically to develop links with the firm before it moves to Cambridge. Linking with the point immediately above, the Task Force is recommended to explore with AstraZeneca the scope for engaging actively with these sorts of opportunistic firms. [Task Force/successor body, AstraZeneca]
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Progression Theme 3: Develop and integrate with the wider North West Life Sciences cluster
8. An evidenced strategy for the integrated development of the Life Sciences across the North West of England should be developed, setting out the offer, development priorities, and assets (this in terms of academic science/clinical bases, land and property, specialist facilities/equipment, and wider innovation ecosystem resources). This work should link to the recent evidence base developed by the North West Business Leadership Team, and build on previous strategic thinking for the sector in the region. It should also align with national Life Sciences mapping work being led by UKTI and partners. [ Task Force/successor body, new site owner/operator, sub-regional/regional partners, the North West Business Leadership Team, the emerging North West Life Sciences Group, and the two Academic Health Science Networks]
9. The site’s new owner should be alert fully to the wider plans elsewhere in the region for Life-Science-facing land and property, and engage and support accordingly. At the same time, counterpart operators from across the North West should aim to position their schemes as best they can, so as to complement Alderley Park’s intent and offer. By driving maturely for differentiation and complementation, genuine synergy should be realised . [New owner, with advice from the Task Force/successor body, and other scheme operators and promoters in the North West/North of England]
10. The relocation of Higher Education research activity to Alderley Park has potential, not least around specific equipment and facilities at the site. The alignment of the site coming to market with the forthcoming development of the national Science and Innovation Strategy in 2014 is helpful, and an opportunity of coincidence that the partners are recommended to leverage actively for Alderley Park’s benefit. [Task Force/successor body, regional university partners]
11. A number of ‘live’ opportunities exist for Alderley Park and should be captured. Specifically, the Diagnostics for Stratified Medicine Catapult, the Synthetic Biology Research Centre, the TSB’s Formulation Special Interest Group, and the current bid to Round 5 of the Regional Growth Fund are all recommended to be pursued actively, using political influence and corporate leverage. [Task Force/successor body , new site owner/operator, regional university partners , NHS Trusts ]
12. Recognising the calibre and quality of staff that AstraZeneca has been able to attract to, and retain in, the North West, it is recommended that partners consider what alternative strategies and actions are now appropriate to ensure that ‘the regional skills pool’ is not permanently diminished. [ Task Force/successor body, and wider partners in the North West of England, Cogent ] [Shared recommendation with Volume 1 – Economic Impact Assessment]
Progression Theme 4: Maximise demand from the ‘AZ entrepreneurs’, and foster a sizeable start-up community
13. There is a time-limited opportunity to create a significant community of start-ups at Alderley Park from amongst former AZ employees. This should be recognised as a priority by the Task Force and supported as such. In addition to tailored incubation support, early stage firms will require start-up finance, and attention should be given to assembling
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suitable packages drawing on, for example, Regional Growth Fund 5, other public, private company, and Angel cash. [ Task Force/successor body, new site owner/operator, regional partners, BIS ]
14. A strategy for ensuring that specialist equipment/services/facilities are not transferred to Cambridge and retained at Alderley Park post 2017 is recommended. This should ensure that ‘kit’ is matched up with ‘expertise’ to operate and manage these assets, perhaps through the medium of specialist spin-out companies. This strategy should be framed by a detailed audit of all specialist equipment, technical facilities, and operational expertise at Alderley Park, initiated as soon as possible in conjunction with AstraZeneca. [Task Force/successor body, AstraZeneca new site owner/operator]
15. Pan-regional discussions are underway regarding the use of high-field Nuclear Magnetic Resonance (NMR) instruments across the North West, Yorkshire and Humber, and North East regions, covered by the N8 university partnership. There is a clear opportunity, breaking sooner rather than later, to link this proposal to the existing NMR infrastructure at Alderley Park. It is recommended that this potential opportunity be explored fully. [Task Force/successor body, regional university partners, N8 university partners]
16. There is a significant opportunity for the AstraZeneca diaspora in the North West to come together in a formalised manner to provide expert mentoring to the new business start- up community at Alderley Park. This could play a vital value-adding role alongside existing incubation efforts in providing valuable management, leadership, and international experience needed to establish and build new Life Science firms. It is recommended that the feasibility of such a model be tested formally and, as appropriate, progressed [Task Force/successor body, regional partners, AstraZeneca, and former employees’ networks]
Progression Theme 5: Meet the key delivery challenges
17. Given the current excellence of the Alderley Park infrastructure, there is an underlying risk that the quality of the asset may reduce in the future, given that a new owner may not wish to invest at the same scale as the present one. The Task Force is recommended to recognise this as a key issue, and to be alert to it as discussions about site ownership and medium-term development plans are progressed. [Task Force/successor body, new site owner/operator]
18. Alderley Park does not have a strong reputation for engaging more generally with the North West Life Science cluster. This issue needs to be addressed actively, and to be seen as such. Linked to this, opportunities to develop site-to-partner linkages (e.g. to the sub- region’s HEI base, NHS Trusts etc.), need to be progressed, especially so where there is little prospect of these partners having a physical preference at the facility. Accordingly, it is recommended that action be progressed promptly and with visibility to start repositioning the engagement profile and activity of Alderley Park. [Task Force/successor body, new site owner/operator, and regional partners]
19. Given the complexity of the forthcoming task, the new owner of the site is recommended to appoint a proven and recognised sector specialist with delivery skills to help bring forward the development and implementation of the facility. Key competences to ensure
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here include experience in supporting start-ups, second-stage development, securing Foreign Direct investment, and networking. [ New owner, with advice from the Task Force/successor body ]
20. Alderley Park’s offer lacks the co-location and ’thick market’ benefits that characterise Life Science investment within certain segments of the market, typically in urban locations. This ‘detachment’ from urban centres cannot easily be addressed physically, but can be mitigated by communication and virtualisation technologies, and collaborative behaviours. It is recommended that consideration be given to how the ‘challenge of geography’ can be addressed, as part of the new facility’s proposition to the market. [ Task Force/successor body, new site owner/operator ]
10.13 It is worth noting that responsibility for implementing these recommendations rests with a number of different groups and partner organisations. However, it is envisaged that the Task Force, AstraZeneca and its Board, and the new site owner/operator will adopt significant leadership roles, ensuring that the 20 recommended actions are delivered effectively and quickly, for the long-term benefit of Alderley Park, the wider North West Life Sciences cluster and UK plc.
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Annex A: Stakeholder Consultation
List of Consultees
A.1 The table below provides details of those study stakeholders consulted as part of the research process.
Table A-1: List of consultees Consultee Title Organisation Angela Smith Business Development Manager Ai2 Ltd, Core Technology Facility
Elizabeth Thomas Chief Executive Officer Alderley Park Analytical
Dr Virginia Acha Director, Regulatory Affairs Amgen
Dr Christopher Doherty Vice-President, Global Medicines Development AstraZeneca
Jonathan Fry Portfolio Director AstraZeneca
Dr Mike Rance Formerly, Vice President of Corporate Affairs AstraZeneca
Professor Mark Baird Professor of Organic Chemistry Bangor University (Chemistry)
Ian Webster Non-Executive Director BioCity
Dr John Stageman Chair Bionow
Dr David Higham Director BIS North West
Dr John Ridden Chief Executive Officer Blueberry Therapeutics
Nick Hood Partner and Head of the Technology Team Carter Jonas, Cambridge
Keith Chantler Director of Innovation & Executive Director Central Manchester NHS Trust & TrusTECH
Jo Lappin (Former) Head of Strategy Cheshire and Warrington LEP
Jez Goodman Economic Development Officer Cheshire East Council
Jo Wise Principal Planner Cheshire East Council
Lisa Conway Senior Manager, Employment, Economy, Skills Cheshire West & Chester Council & Learning
Dr Anthony Baxter Chief Executive Officer Cyprotex
Walter Herriot OBE Expert on cluster development and the Ex MD of St John’s Innovation Cambridge cluster Centre
Dr John Nicholson Chairman & Chief Executive Officer Gentronix
Dr Cyril Clarke Vice President Translational Medicine ICON, Manchester
Dr Rod Benson Chief Operating Officer Imagen Biotech
Dr Simon Ward Chief Executive Officer Incanthera
Helen Delahaye Sector Expert Independent Consultancy
Dr John Lovelady Vice President Operations, Consultant in Intercytex Biotech & Cell Therapy (Manufacturing)
Dr Paul Kemp Chief Executive Officer & Chief Scientific Officer Intercytex
Dr Ben Cliff Laboratory Director Intertek Wilton, Teesside
Adam White Associate Director, Planning & Development Jones Lang Lasalle
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Consultee Title Organisation Caroline Mairs Head of Science Park Keele Science and Business Park
Jenny Tucker Science Park Director Keele Science and Business Park
Professor Andy Garner Pro Vice Chancellor and Dean of Health Keele University
Professor John Professor of Musculoskeletal Science and Lancaster University/NW Coast Goodacre Clinical Director of the NIHR Comprehensive AHSN Local Research Network for Cumbria & Lancashire
Dr Mark Treherne Chief Executive Life Science Investment Office, UKTI
Christopher Musson Chief Executive Liverpool Science Park
Dr Linda Magee Chief Operating Officer MAHSC and Greater Manchester AHSN
Felicity Goodey Chairman Manchester MediPark/UHSM
Rowena Burns Chief Executive Manchester Science Park & Citylabs
Professor Sir John Chief Executive and Deputy Chair of Council Medical Research Council Saville
Richard Clark Chief Executive Medipex
Roger Quince Former Director, with responsibility for Granta MEPC Plc Park, Cambridge
Dr Geoff Wainwright Director MerseyBIO/2 Bio Ltd
Daniel Storer Director of Business Development MIDAS
Dr Sarah Jackson Director N8 University Group
Alison Gordon Director of Project Development New Economy, Manchester
Dr Alexander Roy Head of Research New Economy, Manchester
Tim Green Head of Markets and Opportunities Office of Life Sciences/BIS
Sam Westgate Chief Executive Officer Perfectus Biomed
Dr Steve Little Chief Executive Officer Premaitha Healthcare
Mike Rance Chair Primary Science Teaching Trust
Dr Allan Brown General Manager Qiagen
Dr Neil Murray Chief Executive Officer RedX Pharma
John Leake Business Development Manager Sci-Tech Daresbury
Dr Don Wellings Chief Executive Officer Spheritech
Dr Martino Picardo Chief Executive Officer Stevenage Bioscience Catalyst
Sharon Mayo Economic Development Manager Stockport Council
Professor Graham Partner SV Life Sciences Advisers LLP Boulnois
Dr Zahid Latif Head of Healthcare Technology Strategy Board
John Lewis Managing Director The Heath
Dr David Tuffin Network Partner – Cardiovascular & Metabolic DiseaseThe Research Network Therapeutic Area
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Consultee Title Organisation Dr Lionel Clarke Co-Chairman UK Synthetic Biology Leadership Council
John Flamson Director of Partnerships & Innovation University of Liverpool
Kris Matykiewicz Head of Business Engagement University of Manchester
Professor Rod Coombs Deputy President and Deputy Vice-Chancellor University of Manchester
Professor Paul Associate Dean & Research Professor University of Manchester/MAHSC Townsend
Professor Paul Hellewell Director of Research & Innovation, Medicine, University of Sheffield Dentistry and Health
Stuart Palmer Director Warwick Science Park
Brian Smith Vice President of MS Business Waters Corporation
Bob Hodgson Managing Director Zernike (UK) Ltd Source: SQW
A.2 In addition to the formal scoping and in-depth consultations conducted with those stakeholders listed above, the Study Team maintained a regular dialogue with the Task Force, Executive Group and Study Steering Group.
Topic Guide for Stakeholder Consultations
Introduction
A.3 SQW, supported by Bionow, has been commissioned by Cheshire East Council, on behalf of the Alderley Park Task Force, to undertake a demand assessment to inform the development of a Life Science-focused science park at Alderley Park. The backdrop to the study is characterised by the operational changes and consequential job losses associated with AstraZeneca’s decision to relocate key R&D functions from Alderley Park to Cambridge.
A.4 The SQW study concerns the proposed science park element of the future strategy for Alderley Park – not the entirety of the site. Spatially, the research focuses on the c.80,000 sq. m of office/lab accommodation and specialist technical facilities within the Mereside zone of Alderley Park.
A.5 The detailed vision for the science park is still being developed but the overarching goal of the scheme will be to build a nationally significant Life Sciences cluster that is complementary to developments across the wider North West and beyond. It will seek to attract high quality investment and jobs to the area, thus minimising the economic ‘shock’ associated with the reduction in AstraZeneca staff levels on site. The intention is for Alderley Park to continue to develop as a key part of the national infrastructure for UK Life Sciences activity through a distinct focus on Human Health Sciences, Technologies, R&D, and associated processes 25 .
A.6 The purpose of these stakeholder discussions is to feed into SQW’s assessment of the scale and nature of demand (from identified target segments of the market). Each discussion is
25 Some encouraging early progress has been made through the development of the BioHub incubation facility at Alderley Park, which has secured c3,000 sq. m of take-up from bioscience firms since it opened earlier in the year. Further details on the BioHub offer can be found here: http://www.biocity.co.uk/locations/biohub-at-alderley-park-
A-3 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report likely to last for around one hour and will be treated in the strictest of confidence. We would like to take this opportunity to thank you in advance for your time and assistance with this important study.
Background
• What are the main responsibilities and activities of your current role?
• What involvement (if any) have you had to date in terms of developing the Alderley Park proposals?
Demand
• What scale of demand do you think currently exists for a science park development targeting Human Health Sciences, Technologies, R&D, and associated processes at Alderley Park? What evidence do you have to support this view?
• Where do you see the balance of demand coming from in terms of local firms, UK firms or international firms?
• Linked to the previous question, how do you envisage the scale of demand for a science park at Alderley Park changing over the next 5 and 10 years? What do you think will be driving this?
• What opportunities and challenges do the main trends/drivers of change within the Life Sciences present for Alderley Park?
• What do you think will be the main sources of demand for space at Alderley Park?
‹ Sub-sectors
‹ Private/public/charities/universities/research centres
‹ Large/small firms/start-ups (including those by former AstraZeneca staff)
• What do you think the nature of this demand will look like? What accommodation and services will occupiers be looking for?
‹ Office/laboratory/specialist facilities (give details)/other?
• What key soft infrastructures will be required?
• Attractiveness of the Alderley Park offer
• What are the main strengths of Alderley Park? Will these remain once AstraZeneca relocates a large number of staff to Cambridge?
‹ Quality/uniqueness of the physical infrastructure at Alderley Park?
‹ Proximity to Manchester Airport and wider connectivity?
‹ Existing network of companies within the Life Sciences based in the NW/North of England.
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‹ Access to a skilled labour pool
‹ The quality of life offer (housing/schools/culture and leisure etc.)
‹ Opportunities to build relationships with local NHS Trusts, health charities and university departments?
‹ Local research strengths
• Are there any limitations/challenges with the Alderley Park site and how might these best be overcome?
Supply
• What are the main UK-based and international developments against which Alderley Park is likely to be competing?
• Is there a lack of specialised facilities for bioscience firms in the North of England? What infrastructure/aspects of the offer in particular are currently missing? Why has the market not addressed these?
Wider social impacts of Alderley Park
A.7 In addition to SQW’s work on the demand-side, the study is seeking to assess the economic impact associated with AstraZeneca’s announcements about their operations at Alderley Park. In order to assist us with this strand of the research, it would be helpful if you could share any insights/views on the following potential areas of social/softer impacts:
• Adding value to existing business activity
• Acting as a focal point for business activity, particularly knowledge based spin-outs etc.
• Influencing FDI decisions
• Enriching the sub-regional community (CSR activities etc.)
• Supporting R&D and innovative behaviours/cultures (links with local research base etc.)
• Impact on local property markets and infrastructure (commercial land values, house prices etc.)
Strategic Fit
• How would a science park development fit with wider Life Science cluster development agendas in the NW/North of England/UK?
• Finally, what do you see as the key risks associated with developing a science park at Alderley Park?
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Annex B: Key Assumptions in the Demand Model
B.1 This Annex sets out the detailed assumptions used to underpin SQW’s Alderley Park Demand Model, specifically the figures used to generate Projection 2.
Assumptions
B.2 The ‘Assumptions’ sheet enables key assumptions for the core components of the Model to be adjusted. Those components are: ‘Starting Point’; ‘Typical Year (Gross Incoming)’; ‘Short Term Effects (2014, 2015, and 2016)’; ‘Internal Growth Rates’; and ‘Decay in External Demand’.
B.3 The key assumptions used in the Projection 2 – post stakeholder calibration run of the Model are detailed below. The assumptions used to drive the Model are outlined in the sections that follow and further detailed within the Model itself. The key assumptions in the Model were revised for the Model’s second run, in light of helpful feedback presented to the study team by senior-level stakeholders and experts.
‘Starting Point’
B.4 Assumptions for the ‘Starting Point’ component are detailed in Table B-1, based on BioCity guidance.
Table B-1: Assumptions for the ‘Starting Point’ Component (as used in Projection 2 – post stakeholder calibration) Component Space Take up (sq. m) on-site by Dec Lab+Office 3,300 sq. m 2013 (BioHub tenants) Office 8,400 sq. m 700 retained AstraZeneca staff in Blocks 1 & 11 Diagnostics for Stratified Lab+Office 465 sq. m Medicine Catapult Office 465 sq. m Source: SQW, Alderley Park Demand Model
‘Typical Year (Gross Incoming)’
B.5 Assumptions for the ‘Typical Year (Gross Incoming)’ component are detailed in Table B-2. The key sources of information used are set out below:
• Source of ‘Total Population’ estimates: Bionow (2013) 'Sector analysis report for Cheshire and Warrington, Greater Manchester and Liverpool City Region LEPs' and HM Government (2012) ‘Strength and Opportunity 2012: The landscape of the medical technology, medical biotechnology, industrial biotechnology and pharmaceutical sectors in the UK’.
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• Source of ‘Proportion that could be captured by Alderley Park’ estimates: initial scoping with the Study Steering Group and SQW’s prior experience of demand modelling.
Table B-2: Assumptions for ‘Typical Year (Gross Incoming)’ Component (as used in Projection 2 – post stakeholder calibration) Demand Segment Total Population Proportion that could be captured by Alderley Park Independent start-ups and in the NW 5 Firms 20.0% spin-outs (including Universities, NHS, in the E.Mid, W.Mid, 10 Firms 15.0% Independent, Commercial- and Y&H Group) in the rest of the UK 45 Firms 5.0%
Firms, or operations, in the NW 143 Jobs 20.0% relocating for reasons other than expansion (i.e. change of in the E.Mid, W.Mid, 291 Jobs 10.0% premises/facilities) and Y&H in the rest of the UK 1243 Jobs 1%
Firms, or operations, in the NW 277 Jobs 20.0% expanding in the E.Mid, W.Mid, 988 Jobs 5.0% and Y&H
in the rest of the UK 1915 Jobs 1%
Foreign firms, or the operations of foreign firms, investing 11235 Jobs 0.5% in the UK (i.e. FDI)
University research operations in the NW 14 Jobs 100%
in the E.Mid, W.Mid, 7 Jobs 100% and Y&H
in the rest of the UK 0 Jobs 100%
NHS research operations in the NW 0 Jobs 100%
in the E.Mid, W.Mid, 0 Jobs 100% and Y&H
in the rest of the UK 0 Jobs 100%
Research-intensive in the NW 0 Jobs 100% Government agencies (e.g. HPA etc.) in the E.Mid, W.Mid, 0 Jobs 100% and Y&H
in the rest of the UK 0 Jobs 100%
National research ventures (e.g. TSB Catapult) 31 £m 5.00% Source: SQW, Alderley Park Demand Model
‘Short Term Effects (2014, 2015, and 2016)’
B.6 Assumptions for the ‘Short Term Effects (2014, 2015, and 2016)’ component are detailed in Table B-3. The key sources of information used are detailed below:
• Source of ‘Total Population’ estimates: BioCity, Bionow (2013) 'Sector analysis report for Cheshire and Warrington, Greater Manchester and Liverpool City Region LEPs',
B-2 The impact of the disinvestment by AstraZeneca at Alderley Park, Cheshire Final Report
and HM Government (2012) ‘Strength and Opportunity 2012: The landscape of the medical technology, medical biotechnology, industrial biotechnology, and pharmaceutical sectors in the UK’.
• Source of ‘Proportion that could be captured by Alderley Park’ estimates: initial scoping with the Study Steering Group and SQW’s prior experience of demand modelling.
B.7 It is important to note that this component requires the user to estimate the ‘uplift’ in each segment (i.e. the additional proportion to be added to the ‘Typical Year (Gross Incoming)’ estimate for the same segment).
Table B-3: Assumptions for the ‘Short Term Effects (2014, 2015, and 2016)’ Component (as used in Projection 2 – post stakeholder calibration) Demand Segment Total Population Proportion that could be captured by Alderley Park Start-ups derived from AstraZeneca (per annum for first 3 10 Firms 85.0% years)
First 3-year Uplift in in the NW 143 Jobs 15.0% uplift (released relocating firms latent demand) in the E.Mid, W.Mid, 291 Jobs 5.0% and Y&H
in the rest of the UK 1,243 Jobs 0.5%
Uplift in in the NW 277 Jobs 15.0% expanding firms in the E.Mid, W.Mid, 988 Jobs 5.0% and Y&H
in the rest of the UK 1,915 Jobs 0.5% Source: SQW, Alderley Park Demand Model
‘Internal Growth Rates’
B.8 Assumptions for the ‘Internal Growth Rates’ component are detailed in Table B-4. The key sources of information used are detailed below:
• Source of ‘SQW Estimate’: initial consultation of BioCity leads, SQW’s prior experience of demand modelling and wider consultation with senior-level stakeholders.
Table B-4: Assumptions for the ‘Internal Growth Rates’ Component (as used in Projection 2 – post stakeholder calibration) Demand Segment SQW Esti mate Percentage of occupied space vacated per annum Start-ups 10.00%
Additional space occupied by growing tenant survivor as a Start-ups 20.00% percentage of previous year's occupancy
Percentage of occupied space vacated per annum Established firms 2.50%
Additional space occupied by growing tenant survivor as a Established firms 5.00% percentage of previous year's occupancy Source: SQW, Alderley Park Demand Model
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‘Decay in External Demand’
B.9 Assumptions for the ‘Decay in External Demand’ component are detailed in Table B-5. The key sources of information used are detailed below:
• Source of ‘SQW Estimate’: initial scoping with the Study Steering Group and SQW’s prior experience of demand modelling.
Table B-5: Assumptions for the ‘Decay in External Demand’ Component (as used in Projection 2 – post stakeholder calibration) Demand Segment SQW Estimate
Decay in gross external demand: percentage 0-5 years 0.00% reduction of annual demand figure (resulting from: reduction of marketing effort, loss of novelty, entry of alternative offers, equipment becoming dated etc.) 6-10 years 5.00%
11-15 years 15.00% Source: SQW, Alderley Park Demand Model
‘Other’
B.10 A series of ‘Other’ assumptions open for debate are included in the ‘Assumptions’ worksheet and are detailed in Table B-6. These assumptions are primarily based on BioCity guidance and SQW experience.
Table B-6: Other Assumptions (as used in Projection 2 – post stakeholder calibration) Aspect Lab + Office Office Start-Up Space Type Mix 90.00% 10.00%
Established Business Space 66.00% 34.00% Type Mix
sq. m per job 12 8
Average 1st Year Start-Up 3 Employment Source: SQW, Alderley Park Demand Model
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Annex C: Lessons from Elsewhere
C.1 This Annex presents a series of comparator case studies on successful life science research/science parks (including former large pharma sites such as Stevenage, Sandwich, and Newhouse) and wider clusters such as Cambridge, Edinburgh, Boston and Singapore. It seeks to draw out relevant lessons for the proposed science park at Alderley Park.
A review of successful comparator sites and clusters
Discovery Park – Sandwich/Kent
Summary learning lessons
C.2 Lessons from the development of Discovery Park:
• The mobilisation of public sector support was essential to cope with Pfizer’s decision in 2011 to vacate a large proportion of the site
• Designation as an Enterprise Zone helped to make it a more attractive proposition to investors and tenants than it would have been otherwise
• The site was bought by an enterprising team with experience in developing large sites in relatively remote areas elsewhere in the country, in particular Wynyard Park (www.wynyardpark.com ) in the Billingham/Tees Valley area of the North East. Discovery Park Limited combines development expertise with access to funding
• The site is being marketed and developed for mixed use development (including housing and retail) but there continues to be a focus on R&D intensive companies
• As part of the sale agreement to Discovery Park Limited, Pfizer agreed to take a lease of around 23,200 sq. m of offices and laboratories on the site
• Given its relatively remote location in East Kent, it is being appreciated by the development team that the location does not lend itself to an overly restrictive R&D focus
• Reflecting this reality, entry criteria seem reasonably relaxed – but there is still a desire to create a community of users and facilitate synergies between them
• Companies attracted to the site include those who require large site areas, manufacturing facilities and high site security.
Background and rationale
C.3 The American pharmaceuticals company Pfizer had been operating in Sandwich/Kent from the early 1950s, initially to satisfy regulations from the UK government restricting the import of medicines from overseas. In 1952, Pfizer built a factory in Folkestone to produce its antibiotic Terramycin. The development of the Sandwich facility followed within two years.
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C.4 By the early 1970s, the 90 hectare Sandwich site had emerged as a major R&D location for Pfizer. It was one of the largest research and development facilities in Europe. The site was the heart of Pfizer’s global research, development and manufacturing capability and the company developed many of its iconic drugs there. For example, cardio-vascular expertise led, through the serendipitous discovery of a striking side-effect, to the launch of Viagra, one of Pfizer’s best-known drugs. Sandwich was described by some as the jewel in the crown of Pfizer and Sandwich’s contributions to propping up the company in the 1980s helped trigger an extensive investment programme.
C.5 During its fifty year heritage the world class facilities and office spaces were developed in three phases with many of the specialist research and development laboratories – the Millennium Buildings – built just over a decade ago. A new £109 million research facility (the so-called B530 complex) was built in 2011 which was designed to facilitate integrated research teamwork across chemical, pharmaceutical and analytical research fields. The building offered around 36,200 sq. m of office space, laboratories and ancillary facilities.
C.6 However, reviews undertaken in the early part of the new century showed that the Sandwich facility was failing to deliver significant returns on investment. Its focus on allergy and respiratory conditions – two relatively high-risk areas in which Pfizer’s activities were modest and where it had little competitive advantage – eventually made it an easy target for cuts.
C.7 Like their counterparts in the UK’s other leading drug companies, GSK and AstraZeneca, Pfizer executives started to shift globally away from the heavy overheads of ‘bricks and mortar’ investments in research laboratories and scientists. Instead they were seeking to collaborate and share costs with academic institutions and biotech companies. Around 2008/09, Pfizer started to explore opportunities to develop a science park on the Sandwich site, reflecting this shift from an ‘industrialised’ model of research and development by large pharmaceutical companies to a ‘satellite’ one. Moreover, some of the buildings were seen as too cumbersome to adjust to the nature of modern drug development. A number of specialist consultancy companies (including SQW) were asked to bid for feasibility work to explore whether and how other bioscience companies might want to use the facilities and space on site and benefit from close proximity with Pfizer researchers.
C.8 However, events overtook this plan and on 1 February 2011 Pfizer announced that it would be closing the entire research and development facility at Sandwich within 18-24 months, as part of a company-wide plan to exit certain therapeutic areas including allergy and respiratory research based at Sandwich. In its announcement, Pfizer stated that it hoped to transfer several hundred positions to other sites or to Pfizer partner companies.
C.9 It was hoped that there could be a re-use of the site and buildings with a community of research-intensive companies. However, the task of repurposing the site and buildings was not seen as easy. For example, doubts on the suitability of the site as a thriving campus for life science companies were expressed by Declan Doogan, previously Head of Worldwide development at Pfizer and subsequently with the US biotechnology company Amarin, who cautioned on the difficulties on re-using some of the specialist buildings on the grounds of their complexity and high operating costs.
C.10 In April 2011, as a counterpart of its decision to vacate Sandwich, Pfizer established Neusentis in Cambridge, intended to operate as a biotech-like unit combining research in pain, sensory
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disorders, and regenerative medicine. Neusentis acquired biopharmaceutical company Icagen in November 2011.
Discovery Park – the developers, site and buildings
C.11 In June 2011 Pfizer renamed the Sandwich site 'Discovery Park' and put it on the market for sale. In the same month, Pfizer announced that it would retain 350 jobs at Discovery Park, subsequently increased to 650 in November 2011. In August 2011 it was announced that the Pfizer site at Sandwich would become an enterprise zone with discounted business rates, easier planning rules and access to superfast broadband.
C.12 In August 2012 Pfizer sold the freehold of the Discovery Park site to Discovery Park Limited, a private consortium headed by Chief Executive Chris Musgrave, Chairman Trevor Cartner and backers Palmer Capital (Ray Palmer). Mr Musgrave and Mr Cartner are already owners of joint venture company Wynyard Park Limited which, since 2005, has developed the former Samsung factories site in Teesside into a business park.
C.13 The finance company Palmer Capital is a real estate fund manager and venture capital backer of companies. Palmer Capital manages over £1 billion of real estate through its nine UK offices, six Continental European offices and two offices in Asia. The company has over 250 properties that it manages on behalf of investors. The business model has evolved over the last twenty years, starting in the UK in 1993. In 2007 the Continental European business was established and in 2012 the Asian business was acquired. All of these businesses focus on adding value in real estate investment and development opportunities, with a consistent theme of the management teams owning part of the business within which they work.
C.14 As part of the sale, Pfizer agreed to take a lease of around 23,200 sq. m of offices and laboratories at the site.
C.15 The vision for the development of Discovery Park has been expressed as follows: “To create a world class science, technology and business location, offering excellent facilities – including a gym, an artisan bakery, restaurant and cafés, tenant benefit schemes and high speed broadband across the site. To ensure the Park continues to evolve, we are committed to responding to market demand and offer bespoke, tailored packages to meet the needs of all businesses – large or small.”
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Figure C-1: Discovery Park
Source: SQW C.16 At the time of acquiring Discovery Park, the consortium recognised the potential of the site for technology businesses and other users including universities and academic institutions. It also expressed the aim to ‘significantly’ invest in the site as a ‘mixed-use’ science and technology oriented business zone.
C.17 To make the site fit for purpose, a need for demolition of some of the buildings was recognised. Built in the 1980s, the nine ear-marked properties preceded the multi-million Millennium phase of development by Pfizer and are shown with red dots on the picture below. They amount to a total of around 139,300 sq. m.
Figure C-2: Buildings selected for demolition
Source: SQW
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Demand and take-up
C.18 Discovery Park is one of the largest business parks in Europe. It is aiming to market its specialist focus on science and technology and seems to be creating a successful platform for emerging and established companies in the fields of biotechnology, life science, pharmaceuticals, research & development and science & technology. The aim is to connect, share knowledge and expertise, supported by the tax advantages stemming from the Enterprise Zone status. There is not, however, an exclusive focus on science and technology businesses and the site is also attracting more general manufacturing and service companies. It is building on its diverse range of services in one location – from laboratories to incubator space, specialist niche manufacturing and R&D facilities to warehouse units and general commercial office space – creating a multi-faceted proposition with particular benefits to companies.
C.19 Discovery Park is currently home to 61 businesses across the following classifications: life sciences; science and technology; manufacturing; and services. Total employment is around 1,300, which is considered well on the way to the target number of 3,000 staff by 2017.
C.20 Amongst the tenants are:
• Augean – waste disposal and recovery services. Augean’s East Kent Waste Recovery Facility provides High Temperatures Incineration (HTI) capacity coupled with energy recovery. Augean’s on-site laboratory allows it to assess waste streams to determine the optimal methods for processing to comply with strict environmental standards. Providing the highest levels of secure destruction, its HTI burns waste to temperatures of 1200 degrees Celsius, ensuring complete combustion. The heat from incineration is then converted into recovered steam, which is returned back to the energy supply chain. The site also accommodates a solvent handling facility to ensure the safe handling, storage and transfer for efficient disposal of liquid waste streams from a variety of sources. The facility is protected by high security.
• Mylan – one of the world’s largest generics and specialty pharmaceutical companies, providing products to customers in approximately 150 countries and territories. The company maintains a board product portfolio, which it regularly bolster by an innovative and robust product pipeline. With a worldwide workforce of more than 18,000, Mylan has attained leading positions in international markets through its wide array of dosage forms and delivery systems, significant manufacturing capacity, global commercial scale and a focus on quality and customer service. Through its India-based subsidiary Mylan Laboratories Limited, Mylan has direct access to one of the world’s largest active pharmaceutical ingredient (API) manufacturers. This relationship makes Mylan one of very few global generics companies with a comprehensive, vertically integrated supply chain.
• LGC Health Sciences Division – providing analytical services to support surveillance, research and development, investigative services, quality assurance and regulatory activities for its customers in the food, pharmaceutical, port and consumer products sectors.
• Estover Energy – an alternative energy company which is currently proposing to build a £65 million local scale Combined Heat & Power (CHP) plant to provide
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renewable heat and electricity to Discovery Park. The plant will use locally sourced wood fuel to generate sustainable heat and power for Discovery Park and the National Grid.
• Peakdale Chemistry Services/Peakdale Molecular – providing an embedded discovery service which places its scientists’ skills for project management and problem solving alongside the client’s own team. The company offers custom synthesis, contract research, medicinal chemistry services, high throughput automated purification and high pressure chemistry.
• FosterCare UK – an independent foster service provider which works with an increasing number of local authorities on placing foster children. It has satellite offices in London and the South East and decided to move its head office to Discovery Park to meet its organisational growth requirements. It employs 98 people across its sites and has recently moved into its new 170 sq. m offices on Discovery Park. Jonathan Toomey, managing director at FosterCare UK, said: “Moving our head office to Discovery Park has enabled FosterCare UK to bring all of the high quality, child- centred services we provide into one central destination. As a rapidly growing Kent- based business, the new office space gives us room to expand our services and continue the recruitment of new foster carers in specialist areas.”
• Vital Software – develops data driven solutions for the automotive industry in the UK, Australia and the Netherlands. The company recently moved its offices to Discovery Park as part of its expansion plan. Keith Bushell, managing director for Vital Software, said: “Discovery Park is the perfect location for our 13 UK-based staff. When we learned that the site was going to become an Enterprise Zone, it was the natural choice for our relocation. We are very pleased to be in the park and are really looking forward to meeting and working with other like-minded and forward thinking companies.” Vital Software plans to continue its business expansion in the UK and Europe, having recently opened offices in Amsterdam.
C.21 Paul Barber, Managing Director of Discovery Park Ltd, is positive about the future of the site. “We believe that offering such a diverse range of services in one location – from laboratories to incubator space, specialist niche manufacturing and research and development facilities to warehouse units and high spec offices – is a unique proposition and one which sets Sandwich apart from its competitors. In addition, our tenants have been able to take full advantage of the benefits of the site’s Enterprise Zone status, 0% interest loans from Expansion East Kent, and the government funded tax reliefs for science companies as an incentive.”
C.22 Discovery Park Ltd is also working to attract universities and academic institutions to the site.
C.23 There are plans to develop the site as a thriving mixed use community. In October 2013, the vision for Sandwich Discovery Park was unveiled as a mixed use development with a superstore and 500 new homes to be completed by 2017 with the aim of generating 3,000 jobs 26 . The plans emerged during a consultation with businesses currently on the site.
26 See Thanet Gazette, 1 October 2013
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Recent coverage in Parliament
C.24 The Prime Minister praised the success of the new Discovery Park in Kent on 27 November 2013, saying it is an example of how the private and public sector can work together to boost jobs growth. He was responding to a question posed by Thanet South MP Laura Sandys during Prime Minister's Questions.
C.25 Ms Sandys said the site had been transformed by the success of a joint venture involving the private and public sector. "With the commitment of £40 million for small and medium enterprises, we now have 1,400 jobs," she said. In reply, Mr Cameron said: "It was a blow when Pfizer made its decision and many people thought that would be the end of the site. The Enterprise Zone is working well and has attracted many high tech companies. If we work with the private sector, we can get good results”. In the Prime Minister’s statement it was also stressed that Pfizer itself has also retained several hundred jobs there and recently four new business have announced their relocation to Discovery Park.
C.26 Paul Barber said: “We are delighted that Discovery Park has been chosen as the base for these diverse businesses, which will benefit the local area in terms of jobs and investment. Discovery Park is situated in a prime location with easy access to the main road network and we also benefit from Enterprise Zone status. Our vision is to create a thriving business hub centred around world class science and technology facilities we already have on site. To have welcomed four new businesses to Discovery Park and into Innovation House, our dedicated luxury office accommodation, is testament to our commitment to creating a vibrant work environment where businesses can connect, share and engage. As we develop the site we look forward to welcoming more businesses in 2013.”
Stevenage Bioscience Catalyst (SBC)
Summary learning lessons
C.27 Lessons from the development of SBC:
• There was high level senior commitment for the project within GSK; Andrew Witty as chief executive was fully behind the scheme and charged senior GSK personnel (at the level of Vice President) to progress it.
• The reasons for the wish to develop SBC were two-fold: to make use of surplus space and to create an open innovation (OI) environment. This meant that there was considerable overlap with the GSK company strategy; open innovation was considered as the new way to approach drug discovery and development and SBC was therefore an integral part of the development of company strategy.
• Once a senior decision on the merits of the development had been taken, professional experts were engaged to develop the feasibility of the development and to help make the case for public sector support.
• Once public sector support had been pledged, GSK started to implement the project without delay. GSK demonstrated its full commitment by providing substantial operational and capital funding. This was then matched by a variety of public sector
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partners. The scale of support made it possible for the scheme to be taken forward swiftly and as a high quality initiative.
• Support from central government, research organisations and regional bodies was mobilised at the highest level; GSK played its cards as one of the country’s foremost R&D-based companies and brought sponsors on board by emphasising the strategic importance to support the company and the project (and to be seen to support it).
• The location between Cambridge and London helped to make the strategic case for the scheme as a major UK initiative in the life sciences within the ‘Golden Triangle’.
• Employment of a qualified and experienced SBC chief executive (Dr Martino Picardo) early on in the process facilitated implementation, both in terms of the capital development as well as the concept development. Dr Picardo sums up the three ingredients for success as “people, appetite and culture”.
• SBC is now emerging as an excellent location for bioscience activity; this attracts companies and key organisations and brings about positive snowball effects with success generating further success.
• The scheme is positioning itself as “the first UK open innovation bioscience campus”.
Background and rationale
C.28 SBC was formed in 2009 as a joint venture between the UK Department of Business, Innovation and Skills (BIS), GlaxoSmithKline (GSK), the Wellcome Trust, the East of England Development Agency and the Technology Strategy Board. It is focused on early-stage drug discovery and development. The project was backed with £38 million from its main sponsors.
C.29 The project was initiated by GSK for two main reasons. The first was to make use of land available for development (owned by GSK) adjacent to the company’s Stevenage R&D facility. Second, GSK had come to realise the importance of open innovation for drug discovery and development and the need to have close connections with a range of small and young bioscience companies for which physical proximity on an open innovation campus would be helpful.
C.30 SBC’s location between Cambridge in the north and London to the south supported the case for developing the Biocatalyst because it meant that companies and people with the right skills and interests were within a reasonable catchment area.
C.31 The topping out ceremony in 2011 was attended by senior representatives from key stakeholder organisations. The ceremony was performed David Willetts, Minister for Universities and Science who stressed the importance of SBC providing vital access to expert knowledge and research, strong links with pharmaceutical companies and high quality facilities. Other attendees included Martino Picardo (Chief Executive of SBC), Patrick Vallance (Senior Vice President of Medicines Discovery and Development at GSK) and Ted Bianco, (Director of Technology Transfer at the Wellcome Trust).
Strategic fit of SBC with the strategic mission of its sponsors
C.32 SBC has mobilised support from a number of high profile national and regional sponsors:
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• GSK itself is a pharmaceutical industry leader and one of the few companies researching both medicines and vaccines for the World Health Organization's three priority diseases – HIV/AIDS, tuberculosis and malaria. Engagement with tenant firms in the SBC helps the company to spot emerging commercialisation opportunities.
• The Wellcome Trust’s breadth of support includes public engagement, education and the application of research to improve health. It is independent of both political and commercial interests. Involvement in the SBC potentially opens new commercialisation opportunities.
• The SBC fits well with BIS’ strategic agenda for the UK to develop first class companies, products and services.
• The Technology Strategy Board works to drive economic growth by making the UK a global leader in innovation. Support of the SBC is in line with TSB’s wider innovation agenda.
• EEDA (now defunct) supported SBC as part of its wider strategy for driving innovation-led business growth.
Open Innovation (OI)
C.33 SBC promotes the use of OI within the life sciences sector, connecting small businesses with an active network consisting of GSK, academia, charities, other businesses and funding bodies. Firms using OI combine their own R&D with externally sourced ideas and expertise. OI can be explained as the use of connections and networks to exchange knowledge and ideas with external partners being involved at all stages of product development. This leads to equitable business relationships benefitting all partners and encourages new business models to maximise the value of intellectual property and other assets. Examples in other sectors have shown that the benefits of OI include reduced time to market for new products and services, access to new markets, improved innovation success rates and increased profits.
C.34 At a conference dedicated to ‘OI in Action’ at SBC in November 2012, Patrick Vallance (Pfizer’s Senior Vice President Medicines Discovery) emphasised that the time of “over-restrictive inward-looking practices” has gone, bringing many benefits for life sciences innovation. Following on from these comments, the second keynote speaker Stefan Lindegaard (open innovation expert and author), described how he has worked across diverse sectors and encouraged companies to become “competitively unpredictable”, as one CEO described it. He also raised the idea that large firms should be more innovative than smaller ones, with their size providing some protection should certain approaches fail.
C.35 The conference, which attracted over 150 delegates, also featured sessions on open access to research literature, crowd funding and social media, as well as the implications of open innovation on intellectual property, contracts and drug discovery. Speakers came from a range of organisations, including GE Life Sciences, Cambridge Enterprise, the Medical Research Council, Scrip Intelligence, the Wellcome Trust, Philips Research, Unilever R&D and Innocentive.
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The SBC offer
C.36 SBC offers a collaborative environment for small and large companies. This includes state-of- the-art facilities that are pre-fitted and ready for immediate occupancy. Reflecting its OI ethos, the lay-out of the campus is designed to encourage cooperation, dialogue and interaction between tenant companies and also with scientists on the GSK R&D site.
C.37 Key facilities include:
• The Bio-Incubator is targeted at start-up biotech companies; a total of 4,750 sq. m is split between office space (40 per cent) and laboratories (60 per cent). The design is such that there is a communal area between the two spheres which facilitates informal mingling.
• The Accelerator Building offers small companies that begin in the Bio-Incubator (or other bio-incubators around the UK) room to grow as they develop. Providing 4,100 sq. m of working space for up to 150 people, the building is split between laboratories and offices.
• The Hub is a 250 sq. m meeting and conference facility which offers space that is crucial to facilitate open innovation. Any of the occupants of the first two buildings can use the meeting room space on a flexible charge-out basis.
• Social facilities. The campus community atmosphere is supported by a range of opportunities to interact through shared social facilities with GSK including a restaurant, fitness centre, meeting rooms, lecture theatre and speaker programme.
Looking to the future
C.38 Long-term development plans envisage a significant expansion of the site to more than 45,000 sq. m. The aim is to create an environment that houses over 1,500 workers, in addition to the 2,000 GSK employees on site.
Demand and take-up
C.39 SBC now has around 25 tenants. The first tenant to move into the incubator building was the Translational and Medical Sciences Consultancy division of Aptiv Solutions , a company providing drug and medical device development services with an expertise in adaptive clinical trial design, simulation and execution.
C.40 For Aptiv Solutions, the move provided an opportunity to participate in the open innovation ethos of SBC, whilst benefiting from the state-of-the-art facilities and supportive environment available to tenants. Pat Donnelly, CEO and Chairman of Aptiv Solutions, said:
"We recognise that innovation is central to the success of drug development in addressing unmet medical need. In joining the vision created by SBC to tackle the challenges the biopharmaceutical industry faces by driving new approaches in drug discovery and development, we offer our congratulations to the founders of SBC in their initiative to create a unique knowledge hub for scientific innovation. We are excited about the possibilities that facility and the evolving community will generate."
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C.41 In June 2013, Johnson & Johnson Innovation announced the establishment of a partnership office at SBC to support emerging entrepreneurs and biotech companies in the region. Johnson & Johnson Innovation focuses on accelerating early innovation and enhancing opportunities for collaboration and investment across Johnson & Johnson’s global healthcare businesses. The firm provides scientists, entrepreneurs and emerging companies focused on early-stage opportunities with one-stop access to science and technology experts who can facilitate collaborations across the pharmaceutical, medical device and diagnostics and consumer companies of Johnson & Johnson. This support includes local deal-making capabilities with the flexibility to adapt deal structures to match early-stage opportunities and establish novel collaborations that speed development of those innovations to solve unmet needs in patients.
C.42 As part of a broader strategy to interact with the UK life sciences ecosystem, science and business experts from the London Innovation Centre of Johnson & Johnson Innovation will have a regular presence at SBC to interact with companies in residence who are advancing concepts and technologies with the potential to transform patient healthcare. This collaboration with SBC reflects Johnson & Johnson Innovation’s commitment to open innovation and collaboration that is necessary to tackle urgent unmet medical needs. “Our goal in placing four regional innovation centres in life science hotspots ... is to integrate our science and business experts with innovators and entrepreneurs in these communities so that together we can support a strong biotech industry and advance promising healthcare solutions ” noted Dr Kurt Hertogs, Incubator Strategy Leader for Johnson & Johnson Innovation in the London Innovation Centre. “ Collaboration within the unique incubator environment of SBC, which was created to provide small organizations access to the resources of larger pharmaceutical companies, is one of the steps we can take to help advance these goals. ”
C.43 In October 2013, MRC Technology announced the relocation of MRC Technology’s drug discovery activities to the Stevenage campus. The move forms an important part of MRC Technology’s evolution and sees their Centre for Therapeutics Discovery become the cornerstone tenant in SBC’s Accelerator building. Fit-out of the facilities is expected to start shortly, with completion and relocation by 2015.
C.44 MRC Technology’s Centre for Therapeutics Discovery, which has around 70 staff, identifies and develops novel small molecule and antibody targets generated by academia and research charities, with the aim of creating effective new drug candidates. From its inception in 2000, MRC Technology has helped launch 12 drugs, form 18 start-ups and generated over £600 million in royalty revenues. At SBC, it will occupy around 2,100 sq. m of laboratory and office space.
C.45 In choosing the new location for its laboratories, MRC Technology was attracted by the innovation network developing at SBC and the opportunity it offers to collaborate extensively with universities, charities, biotechnology and pharmaceutical companies. MRC Technology undertook an extensive search to find the right environment for its further development, as it is expected that the current site adjacent to the MRC National Institute for Medical Research in Mill Hill, London, will be decommissioned by the end of 2016.
C.46 Dave Tapolczay, MRC Technology’s CEO, said “Our move to Stevenage Bioscience Catalyst provides us with a fantastic opportunity to increase and strengthen the small molecule and therapeutic antibody engineering development work that we do for academia, charities, biotech and pharma. It will help us realise our ambition to be a centre of excellence for
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translating drug targets into drugs with potential to move to the clinic, and we are looking forward to being part of the open innovation network at SBC.”
BioCity Scotland, Newhouse (Lanarkshire)
Learning lessons
• A high level consortium headed by Scottish Enterprise and Scottish Development International led the negotiations with MSD
• MSD supported the development by gifting the site
• Access to equipment and compound production facilities provided an important competitive advantage for companies locating at the site. Facilities include high- throughput screening, nuclear magnetic resonance machines, mass spectrometers, high-performance liquid chromatography, electrophysiology and cell culture suites, centrifuges and freezers. Also part of the package is a “world leading” compound management system and a library of 100,000 compounds
• BioCity Scotland is much more than a property scheme. The site is developed as a hub for events and as an anchor for overseas missions.
Background and rationale
C.47 The US pharmaceutical company Merck, known as MSD in the UK, announced the closure of its research site and plant at Newhouse, Lanarkshire in July 2010 with the potential loss of 250 jobs. The plant, located by the M8 motorway, was at the forefront of drug development and the closure was brought about by a consolidation of the company’s global operations.
C.48 The site was acquired by Organon in 1948 and has continued to grow throughout the years. Organon was acquired by Schering Plough in 2007 and the Newhouse site was further expanded with the addition of a large compound management facility. Schering Plough merged with Merck at the end of 2009.
C.49 As well as the Scottish plant, the firm also announced plans to close a further seven research sites and eight manufacturing plants around the world. The move came just over a year after the merger of Merck and Schering-Plough.
C.50 To lessen the blow to the local community, MSD ‘gifted’ the facility to BioCity Scotland, a joint venture between BioCity Nottingham and Scotland’s Roslin BioCentre, to become a base for the development of a Life Sciences cluster. This followed discussions between MSD, Scottish Enterprise and Scottish Development International. The ‘gifting’ opened up more than 12,000 sq. m of purpose built laboratories on a 9 hectare site to support pre-clinical drug discovery and development by a range of independent companies.
C.51 BioCity Scotland is complementing existing provisions for the sector in Scotland by catering for start-up and growing companies wanting a central base on the M8, just 15 miles from Glasgow and 33 miles from Edinburgh city centres. New ventures can tap into business advice and cost-effective support whilst the bigger tenants are attracted by the excellent laboratory, equipment and office environment.
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Demand and uptake
C.52 Within weeks the first companies were moving onto the site. Since the official opening, BioCity Scotland has started to populate the once-vacant laboratories and offices by attracting start- up tenants, university spin-outs and well-established bioscience companies.
C.53 By January 2013, 11 companies had joined BioCity.
C.54 Companies include:
• AMSBIO Cell Systems – provides products and services that accelerate discovery in the medical, nutrition, cosmetics and energy industries. The AMSBIO range includes specialist antibodies, peptides and recombinant proteins as well as systems for studying cell motility, migration, invasion and proliferation. Key areas include: Oncology, Regenerative Medicine, Environmental Analysis, Cytotoxicity Screening, Glycomics and Stem Cell Biology.
• Biogelx – develops and supplies simple, yet functional peptide gels for use as tissue mimics in cell culture. The gels are tuneable, so can be designed and created to match the environment individual cell types require, creating new opportunities and applications for cell biologists.
• Conex Chromatography Systems – is a laboratory instrument service, sales and supplies company providing onsite and in-house support on all major chromatography manufacturers’ instrumentation.
• GH Associates (GHA) – is a specialist consultancy, assisting businesses and other organisations in the acquisition of grant funding from national and European funding authorities for research and development, across all industrial sectors.
• Insignia Technologies Ltd – a team of scientific and commercial experts developing a range of intelligent indicators which will keep both customers and consumers informed. The company’s launch applications include cost effective, colour-changing labels which improve food safety and remove unnecessary waste.
• MTS Crysostores – offering off-site sample storage and transport in very cold conditions.
C.55 One of the earliest companies on site was stem cell services company Pharmacells™ whose work is being applied to tackling diseases such as osteo-arthritis, cosmetic anti-ageing, diabetes, and soft tissue and cartilage repair and renewal. Pharmacells™ Chief Executive Athol Haas said: "We were delighted to be able to relocate our stem cell banking service to the fantastic facilities provided by Biocity at Newhouse. Access to these world class facilities has allowed Pharmacells™ to develop our Oristem ® and Thallocell™ products and to open new markets within regenerative medicine."
C.56 Other tenants include:
• A presence of Edinburgh Napier University to provide liaison services with the university for student placement and research purposes.
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• Full service commercial law firm McClure Naismith LLP joined as BioCity Scotland Corporate Partners. Corporate partner status enables companies such as McClure to offer specialist advice to all BioCity companies through clinics, workshops, seminars and presentations. They also get involved in regular BioCity corporate events, such as the BioEntrepreneur Boot Camp. David Gallagher, Associate with a particular interest in intellectual property said: "Partnering with BioCity Scotland has been a great opportunity for us over the last 12 months to meet, network and discuss legal issues with companies who are at the cutting edge of the sector in Scotland. Events, including the Boot Camp, have allowed individuals and companies to showcase the best that Scotland has to offer in this area and we are proud to support these growing businesses".
Other facilities and events
C.57 Virtual office and meeting facilities are regularly booked out, and visitors from across Scotland attend training and business networking events. Scottish Enterprise, the Scottish Life Science Association, the Life Sciences Advisory Board (LiSAB), Health Science Scotland, Medilink and ABHI regularly use BioCity for international tours, meetings and training.
C.58 Highlights during the first year of operation have included the visit in January by First Minister John Swinney MSP, followed in February by HRH the Princess Royal who officially named the Sir James Black building. Then came the hosting of a three-day BioEntrepreneur Boot Camp, the staging of the Dalziel High School Award for Scientific Excellence, and the appointment of Fraser Black as Managing Director.
C.59 BioCity Scotland MD Fraser Black said: "It has been a privilege to take up the management reins from the initial launch team whose work laid the foundations for a thriving bioscience business environment. The results speak for themselves, and the vision of building a centre which places Scotland as a global leader in life science innovation is clearly coming to fruition. Further progress will be made as we continue to build links with our leading research universities, enter discussions with corporate investors and venture funds, and attract the very best high growth company bio-entrepreneurs."
Cambridge, UK
Cambridge Biomedical Campus
C.60 The proposal for a biomedical park at Addenbrooke’s Hospital was first announced in 1999 in the “Addenbrooke’s 2020” Vision published by the Addenbrooke’s NHS Trust, Cambridge University and the Medical Research Council (MRC). The vision for the future of the hospital site was to transform it into a Biomedical Campus, including expansion of the existing hospital, a new much larger building for the MRC, the eventual accommodation on the site of Papworth Hospital, and space for attraction and development of major public and private research facilities.
C.61 In 2000, SQW undertook market research on the potential of the site to attract bioscience businesses. At that time we found considerable interest from small fast growing companies in and around Cambridge and London, and also from major medical related charities.
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C.62 After a gestation period of a few years, the Cambridge Biomedical Campus is now being developed by Cambridge Medipark Limited (CML) which was appointed in 2003 as the development partner for the campus expansion following a competitive tender led by Bidwells on behalf of the Hospital Trust, its partners and the landowners. CML is a joint venture company which was incorporated by Liberty Property Trust and Countryside Properties specifically for the delivery of the campus development. The two companies had worked together previously on commercial projects in the UK including the Chertsey regeneration project and the redevelopment of a former hospital in Didsbury in south Manchester into a mixed-use development which will include a new 7,000 sq. m private hospital for the Circle Health Group.
C.63 Since 2003, CML has played a pivotal role in securing the release of the greenbelt land. It successfully obtained outline planning consent for the expanded site in 2009. To date, CML has achieved a number of key milestones in the development of the campus including the sale of land to the MRC for its new 27,000 sq. m building to house the Laboratory of Molecular Biology and its agreement with Papworth Hospital to relocate the hospital to the campus. It is expected that construction for the new hospital site will commence in the autumn of 2014 with completion scheduled for 2017.
C.64 To support the development, the partnership has assembled a group of experts with a broad range of skills and experience in commercial real estate and marketing.
C.65 Investment was dedicated to improving the connection of the site into the national road network. A new link road to the M11 (Junction 11) was funded partly through development gain (S106) from the adjacent housing development by Countryside Properties and funding of around £10 million provided through CLG to Cambridgeshire Horizons under the old Growth Areas programme, to be repaid through house sales. In addition the new guided busway provides a direct connection to central Cambridge and the railway station. The site is now excellently connected into national and international transport and communications networks.
C.66 Addenbrooke’s Hospital is a world-renowned teaching hospital with strong affiliations to the University of Cambridge. Its Medical School ranks as the third best medical school in the world. Addenbrookes Hospital attracts considerable government funding each year as a recognised leading centre for biomedical R&D. This support is further increased by funding given to research organisations on the campus and elsewhere in Cambridge.
C.67 Planning consent has been secured for more than 185,800 sq. m of research, clinical treatment and higher education development, which will expand the total extent of the Addenbrooke’s campus to 55 hectares. Since its launch some 10 years ago, around 46,500 sq. m of bespoke property has been developed for three research organisations: including 25,000 sq. m for the MRC’s Laboratory of Molecular Biology and major facilities for the Cambridge research institute of Cancer Research UK and the Cambridge Institute for Diabetes, Endocrinology, and Metabolism (CIDEM).
C.68 A hotel and conference centre is planned as part of the next phase of development, and consideration is being given to the creation of a central hub to provide more restaurants/food outlets and limited retail space for staff and visitors, promoting the benefits of co-location on the campus.
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C.69 Marketing of the biomedical campus is being undertaken jointly by Bidwells, Savills and Creative Places, with the first two focusing on international and national mobile investment, and Creative Places targeting potential spin outs and expansions from the existing research facilities (including but not limited to Cambridge University) and the hospital. Marketing is also supported by a full time project director (Jeanette Walker) with extensive bioscience background and an intimate knowledge of the Cambridge cluster. Jeanette played a key role in making the case for relocating to Cambridge to AstraZeneca and is now working with the company to integrate them into the Cambridge cluster.
C.70 There was some concern about the financial viability of such project on part of the developers because the feasibility is more complex to forecast than developing and leasing or selling a freestanding facility. Moreover, because of the relatively high density of the master plan the developers need to build in units of at least 4,600 to 5,600 sq. m, ideally with a substantial proportion pre let on long leases. However, research undertaken by SQW into the Cambridge economy (in 2010) and further market intelligence has highlighted that the lack of small units at flexible terms is a significant constraint to the development of the Cambridge cluster. Very young companies require starter units and growing companies require in the range up to 2,800 sq. m. The new multi-occupancy building may address the demand from smaller occupiers in the first instance. However, the preference on part of the developers to construct buildings with a minimum of 4,600 sq. m may mean that there is a higher likelihood of demand from public sector organisations who generally want their own buildings and are prepared to enter into longer leasehold arrangements.
Granta Park
C.71 Launched in 1997, Granta Park was developed as a joint venture between The Welding Institute (now known simply as TWI) and MEPC on land owned by TWI five miles to the south of Cambridge, on a junction of the A11 close to the M11 interchange. Following initial market research by SQW, the 40 hectare site received outline planning permission for R&D (B1b) uses in 1996. The research identified demand from firms in the bioscience as well as telecommunications sectors. Following the dotcom crash, development and marketing switched exclusively to the bioscience sector.
C.72 As part of the JV arrangement, new facilities for TWI were completed in 2003, enabling redevelopment of the old buildings.
C.73 Granta Park is now home to around 20 companies, mostly from the life sciences sector, employing around 2,000 employees. Most client companies are large enough to want their own buildings and are prepared to enter into longer leasehold arrangements. Companies include Ceris (crop protection), Gilead (research-based pharmaceuticals), MedImmune (industry leader in personalised medicine), PPD (targeted drug development) and Pfizer Research Centre. There are, however, also two multi-occupancy buildings. The McClintock Building offers short leases on relatively small units (70 to 280 sq. m) and the Riverside Building offers larger units (between 280 and 420 sq. m).
C.74 In the early stages of development, demand came predominantly from local companies. For example this included Cambridge Antibody Technology (CAT), which was a spin out from the Laboratory of Molecular Biology and Chiroscience, a Cambridge-owned drug discovery company. These firms had secured venture funding for expansion and were outgrowing their
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premises in and around central Cambridge. However, not all were stable: one of the first buildings to be constructed was 2,800 sq. m of laboratory space for Axis Genetics, but the firm went into administration during the construction of its building.
C.75 Subsequently, consolidation in the bioscience sector led to various takeovers and closures which had a significant impact on both demand for space at Granta Park and also on the ownership of firms based there. For example:
• CAT was acquired by AstraZeneca, which also acquired MedImmune and formed a new combined division. The amount of space occupied by the new division at Granta Park grew in stages from 1,900 sq. m to 18,900 sq. m
• Celltech acquired Chiroscience in 1999, and was in turn acquired by UCB in 2004
• Ribotargets, founded in 1997, merged with British Biotech in 2003, and the merged company was subsequently bought by Vernalis
• PPD, a CRO that provides expertise in clinical trial development, management and post approval services, moved to Granta Park in 2002 when it took 2,800 sq. m. It has since expanded in two phases and now occupies 8,400 sq. m. In 2011 The Carlyle Group and Hellman & Friedman acquired PPD
• Pfizer’s decision to run down and eventually close its site at Sandwich benefitted Cambridge. Pfizer’s regenerative medicine activities were moved to Granta in 2006 and subsequently expanded, to the extent that it is now the second largest occupier of space at Granta Park.
C.76 In total, Granta Park now comprises around 65,000 sq. m of office and laboratory space within buildings developed at relatively low densities (lower than at the Addenbrooke’s Biomedical Campus) over the past 15 years.
Edinburgh, UK
C.77 At the time of publication of the Scottish Life Sciences Strategy in 2011 27 , Scotland was home to around 640 Life Sciences organisations employing around 32,000 people. Since 1998, turnover in the sector had increased significantly from £1.8 billion to £3.1 billion.
C.78 Within Scotland, Edinburgh has emerged as a clear focal point. The Edinburgh BioQuarter has been established to reinforce Edinburgh’s position as a key centre of biomedical research, leveraging its proximity to one of the UK’s top universities, the University of Edinburgh, the only Medical Faculty in Scotland with a five star rating.
C.79 The BioQuarter campus is a major collaboration project between Scottish Development International, the University of Edinburgh, NHS Lothian, the City of Edinburgh Council and the specialist life sciences developer Alexandria Real Estate Equities, Inc. It combines outstanding biomedical research from the University of Edinburgh with the clinical expertise of NHS Lothian and a team of industry professionals.
27 Life Sciences Scotland: Scottish Life Sciences Strategy 2011
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C.80 Project investment for the whole BioQuarter development is expected to exceed £600 million and provide 130,000 sq. m of biomedical and research and development facilities on a 40 hectare site and generate several thousand jobs. BioQuarter will offer a unique environment for innovation in healthcare by supporting intensive interactions between world-class clinicians, internationally renowned researchers and the global biomedical industry. BioQuarter aims to facilitate the development of ideas from the research laboratory to the point at which they are market ready.
C.81 The project is located three miles from Edinburgh City Centre, adjacent to the Edinburgh Royal Infirmary. This is a PFI new-build hospital built on a 25 year lease around ten years ago. It has 870 beds and offers emergency and long-term care to patients across the whole spectrum of healthcare. It has formed the anchor of the BioQuarter site, and continues to expand, with the Royal Hospital for Sick Children (also known as the Sick Kids Hospital) to be re-located to the BioQuarter by 2017.
C.82 The campus brings together three leading medical organisations, the Royal Infirmary, Edinburgh University’s College of Medicine and Veterinary Medicine and the Scottish Centre for Regenerative Medicine. It also includes the Queens Medical Research Institute, the Scottish Centre for Regenerative Medicine (SCRM), the Clinical Imaging Centre, and the Roslin Institute.
C.83 The site has a variety of other institutes and initiatives and includes a bioincubator building, Nine Edinburgh BioQuarter, costing £24 million and offering around 4,600 sq. m of office and laboratory space.
C.84 According to Scottish Development International, 1,200 researchers are already on site at the BioQuarter. The Anne Rowling Regenerative Neurology Clinic was on site in late 2011, the Brain and Body Institute will come in 2016 and the new Sick Kids Hospital is due to open during 2017. The renowned Roslin Institute and Dick Vet Hospital are around six miles away and the British Heart Foundation, Wellcome Foundation and the MRC have a number of supported programmes on-site
C.85 The BioQuarter has the unique advantage of having access to fully computerised patient records, through its partnership with the Scottish Academic Health Sciences Consortium, with Scotland being the only nation in Europe with such records.
C.86 Edinburgh is at the centre of a larger concentration of life science companies in central Scotland, with Dundee forming a secondary focus of development, with a 10 hectare medipark at Ninewells Hospital and Medical School, and a £12 million Clinical Research Centre. Combined with a £20 million Centre for Interdisciplinary Research, and the Wellcome Trust Biocentre Dundee is a major secondary centre for life sciences research in Scotland. There are also important links across to Glasgow and the West of Scotland Science Park.
C.87 The SCRIP Business Insights report on biotechnology clusters 28 describes 23 “established” and 18 “emerging” clusters and it ranks the Glasgow-Edinburgh-Dundee area as an established cluster.
28 Verma, A. (2011) Established and emerging biotech clusters: key components, trends, areas of expertise, rankings and detailed profiles. SCRIP Business Insights Report.
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C.88 The report ranks cluster strengths using five criteria. The Scottish cluster is ranked 23 rd overall and is characterised as follows:
• the region has strong academic institutions which promote basic research in biology and also has specialised (named) research centres
• the cluster is still at a nascent stage compared with Cambridge and London. However, it is actively promoting itself to attract attention and investment from across the world
• the Glasgow region is promoting itself as a clinical trials hub
• Edinburgh has developed science parks and innovation centres to attract life-science companies, and in particular the Edinburgh BioQuarter
• the biotech start-up rate and growth is good, with as many as 50% of start-ups able to find funding as opposed to 36% in the rest of UK. This has been possible as a result of the good network of angel investors in Scotland and good government support in facilitating funding
• it is reported that there is a scarcity of “big-ticket” VC funding in the cluster, especially above the $10 million level
• the absence of VC companies with a long-term investment horizon is leading to the formation of soft companies (a science or technology based company whose business model is to provide R&D-based services) and early sell-offs, which is preventing Scottish biotech start-ups realising their potential.
Boston, Massachusetts
C.89 The Boston area was identified in a 2008 review of life sciences clusters in the USA as the strongest in the country 29 . According to the International Strategy for Massachusetts, it is “an unusually strong and complete cluster with strengths in many areas from hospitals to biotechnology to medical devices to pharmaceutical development to stem cell research” 30 . This includes a wide range and large scale of research activities linked to the universities and teaching hospitals (e.g. Harvard Medical School), various major medical facilities (e.g. Massachusetts General Hospital, Beth Israel Deaconess Medical Centre) and a large cluster of businesses engaged in R&D, manufacturing and service activities (including major companies such as Genzyme and Vertex Pharmaceuticals, and numerous small firms). The main concentrations within the Boston area are at Cambridge/Mass and Longwood.
C.90 According to the Boston Redevelopment Authority, Boston's 22 hospitals and 34 colleges/ universities are important anchors in the city's life sciences sector and wider economy. It is claimed that with more than 124,000 employees, 144,000 students, and 240,000 annual in- patients, the economic impact of these assets on the city's gross regional product is around $15.6 billion annually. Additionally, Boston has received the most in the National Health
29 The Greater Philadelphia Life Sciences Cluster, 2009: An Economic and Comparative Assessment; Milken Institute, 2009 30 An International Strategy for Massachusetts; a report for the Executive Office of Housing and Economic Development, Massachusetts State Government, by the Massachusetts Technology Collaborative, July 2010, page 32
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Institutes’ funding awards for 14 straight years and more life science PhDs are granted locally annually than in any other metropolitan area of the US.
C.91 The Massachusetts General Hospital is the largest teaching hospital of the Harvard Medical School and a biomedical research facility containing 905 beds and admitting over 45,000 patients each year. With more than 10,000 employees, the hospital is the largest non- governmental employer in Boston with the largest hospital-based research programme in the United States, conducting an annual research budget of more than $400 million and with around 93,000 sq. m of dedicated research space.
C.92 Harvard Medical School, established in September 1782, holds a faculty population of 10,800. In 2008, it received a total funding package of $230 million including direct and indirect US government contributions totalling $192 million. Recent property developments in and around the Medical School have opened up the facility to surrounding neighbourhoods with additional open spaces leading to gentrification and a rise in rents and property values.
C.93 The businesses locating close to the research and hospital facilities in Cambridge and Longwood are mainly high value R&D and service operations. Lower value related manufacturing is more dispersed in lower cost locations within and beyond the Boston metropolitan area.
C.94 The Massachusetts State Government has taken various initiatives to support growth of the bioscience and medical cluster, including support for inward investment and establishment of a Life Science Centre (MLSC) and funding to support the start-up and growth of cluster companies. The MLSC covers pharmaceuticals, biopharmaceuticals, bioinformatics, diagnostics and medical devices (which are the most important in terms of exports from the State). It is a quasi-public sector entity, which means it is somewhat protected from political considerations in the disbursement of its substantial funds. Over a 10 year period these are said to amount to $1 billion, the main elements of which are a $500 million capital fund for infrastructure and $250 million tax incentives against which companies commit to create “x” jobs.
C.95 Other MLSC funding includes:
• co-operative marketing grants for industry research
• accelerator loans which are unsecured but only granted after tough screening. These are given before a series A funding round with the aim of helping firms secure investment funds
• a small business fund which matches SBIR grants
• grants for young scientists who have not obtained an NIH grant.
C.96 MLSC claims that in its first 18 months its own outlay of $186 million attracted matching funds of $704 million and created some 6,000 jobs.
C.97 The International Strategy for Massachusetts proposes life sciences to receive ”special attention in the State’s international efforts” and identifies China as the main target market, and in addition Europe, Israel, Japan and Singapore.
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Biopolis and one-north, Singapore
C.98 one-north is the overall development within which Biopolis is located. It is Singapore’s icon for the knowledge economy – aiming to provide an intellectually stimulating and creative physical environment for entrepreneurs, scientists and researchers to congregate, interact and exchange ideas. Key facets are:
• the development is now ten years old; having been conceived at a time when the world economy was booming – it has had to live through the global economic downturn
• it is a mixed use development including public and private sector research, businesses and residential development and social amenities – all to a high standard and aiming to attract international talent
• it has been developed by a strong public corporation (JTC Corporation)
• it is big (covering an area of 200 hectares) and of high density
• the overall plan was developed by the internationally renowned architect Zaha Hadid and innovative design – particularly of the first Biopolis buildings – was key to raising its international visibility
• landscaping and conservation programmes were implemented early on in the development process
• the implementation plan was developed in great detail with high level support from all relevant government departments and agencies
• infrastructure investment has included a new station on the light rail system.
C.99 one-north , which was formerly a military camp, is strategically located in Buona Vista near the National University of Singapore, a major hospital and Singapore’s Science Parks (1 and 2). It aims to be a focal point for research, development and entrepreneurial activities and has been given freedom and encouragement by government to be an experimental development – trying out new, sometimes risky, approaches which, if they are successful, may be applied elsewhere. INSEAD is already located adjacent to the site and the Nanyang Technological University has developed a centre for its alumni within the development.
C.100 The idea behind one-north has been to develop a new 21 st Century place, engendering a creative buzz and entrepreneurial energy through bringing together the opportunities to live, work, play and learn. Biopolis , the physical cluster for the life sciences and Fusionopolis , targeted at the ICT and media cluster, are the first two phases – along with housing development to attract key people (some of it off-site). The overall developer is the JTC Corporation, a government owned company which is Singapore’s leading provider of industrial space solutions.
C.101 JTC undertook the initial development from its own resources, but made strenuous efforts to draw in private sector participation as soon as possible (in Singapore the boundary between public and private sectors is somewhat blurred owing to the dominant importance of government).
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C.102 JTC has stated the rationale behind one-north as follows: “one-north will be a new community of the new dynamic generation. A place where homes, offices, parks and commerce are mixed into a vibrant social melting pot. Somewhere you can walk to work, see a friend at lunchtime and share a meal. A fun place that is always pulsating, never dull and never short of ideas. Chic apartments next to affordable lofts above a linear retail plaza; tropical retail exchanges near open green spaces, arts and culture, sports and recreation, food for brains and souls. one- north has a creative atmosphere which seamlessly integrates all the elements of the mix.“
C.103 Through this approach, one-north aims to broaden the range of choices available to both Singaporeans and incomers. The aim is to attract international companies and their research teams, creating a place within which they can embed rapidly into the country’s economic and social life.
C.104 Biopolis was given a crucial initial boost by the decision of A*Star – the Government’s science development agency – to move its key biomedical institutes into the development and Fusionopolis also has A*Star teams as early occupants. This has been crucial to engendering confidence amongst private research groups that one-north is the place to be.
The strategic context for life sciences in Singapore
C.105 Singapore has a highly planned economy. Following thorough research into alternative approaches, strategic initiatives are agreed and buy-in is secured across all economic and administrative actors. In 1999 the Economic Development Board, which has shaped the growth of industry in Singapore over the past 40 years, announced a strategy for building a knowledge-based economy. Developing the life sciences was a key part of this and it is instructive to see the approach taken.
C.106 A National Biomedical Science Strategy was launched in 2000, with a systems-based approach to developing biomedical sciences in Singapore, comprising:
• a Ministerial Committee to ensure political consensus through policy and programme development
• an International Advisory Committee (IAC) through which key academic and industrial players were brought in to advise on worldwide research and industry trends, to offer critique on current initiatives, to guide development, and to provide ethical and legal inputs
• the Biomedical Sciences Group (BMSG) which provides planning and management across the entire value chain.
C.107 An estimated $2 billion was set aside for the period 2000-2005 to fund new institutes, academic research and training, as well as funding and tax incentives for companies of all sizes, from start-ups to established multi-nationals. In addition, almost $700 million was made available for investments in world class firms carrying out R&D in Singapore.
C.108 The ‘systems approach’ included the three primary components that were deemed necessary for a biomedical sciences initiative to be successful. These were: provisions for infrastructure; tax and capital incentives; and education and workforce initiatives.
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Government support for growth
C.109 There are a number of government tax incentive schemes and grants available to encourage biomedical science companies to locate in the region. These include grants for R&D and manpower training for the purpose of jumpstarting a local operation. Government will match corporate investment in research and development under the ‘Scientific Capability Development Programme’.
C.110 Biomedical Sciences Investments (with total endowments in 2002 of $682.3 million), makes equity investments in biomedical companies and biomedical sciences worldwide and in Singapore-based joint ventures and start-ups. One of the conditions of funding for overseas companies is that they should commit to setting up a joint venture or subsidiary in Singapore when they are ready to expand.
C.111 Education initiatives have been introduced at all levels of the education system, from science events and focused curricula at primary and secondary level, to grants and scholarships for post-graduate study, including exchanges and industry placements. There has been a 50% increase in the number of university life-science enrolments since the implementation of Industry 21.
C.112 Government research funding is available for academics (of either Singaporean or foreign extraction) for up to five years. There is clear recognition of the time constraints faced by academics and the submission system for research proposals takes minimal time and paperwork.
Legislative incentives for the sector
C.113 Having the correct legislation in place is seen as equal in importance for the development of biosciences to having a good infrastructure and a strong scientific base. Adoption of transparent ethical standards is also recognized as crucial. Singapore has become a ‘regulatory haven’ for stem cell research, and is hoping to attract disaffected scientists who feel their academic freedom has been compromised by legislation in other countries. Patents are granted for 20 years from date of filing under the Patents Act 1994. The patenting of plant varieties is permitted under this act. Confidential data/test data are protected under the Medicines Act/Control of Plants Act for a period of 5 years.
C.114 Initiatives taken in 1998 strengthened IPR compliance, leading to full compliance with the WTOs Trade-Related Aspects of IPR (TRIPS) in 1999. There are judicial processes in place to support IPR enforcement, and there are on-going programmes to raise awareness and to educate the public about IPR protection. Moreover there is a good deal of credence that the laws will be enforced.
Wider support for growth
C.115 Singapore holds the secretariat of the Asia-Pacific Economic Corporation (APEC) Coordinating Centre for Good Clinical Practice (GCP). GCP is promoted through the training of clinical research personnel and the creation of a conducive environment for multi-site clinical trials in the region. The Centre for Drug Evaluation was set up in 1998 to deal with New Drug Applications (NDAs), and to provide pre-submission consultations on clinical trial protocols
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etc. Drugs take on average 8-12 months to gain approval, which compares favourably with regimes in the US, Europe and Australia.
C.116 A key element in developing Singapore’s life science’s cluster has been to attract the involvement of a number of very high profile scientists. These have included:
• Sydney Brenner – former director of the MRC Laboratory of Molecular Biology in Cambridge UK, and with strong links to the US science community, who won the Nobel prize in 2002
• Edison Liu, who spent 10 years in Singapore before he returned to the US
• Axel Ullrichthe Max Planck Institute for Molecular Biology in Germany.
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Annex D: Summary of the Physical offer at Alderley Park’s Mereside Zone
D.1 The table below breaks down the physical offer at Alderley Park, showing the key facilities in each block and the different types of space available.
Table D-1: Physical offer at Alderley Park (sq. m – all figures have been rounded) Summary Building GIA m² NIA m² Specialist Specialist Generalised General flexible Wider name lab/write-up technical lab/write-up office facilities facility • Office space Block 1 4,000 3,000 - - - 3,000 - • 3 floors
• Lab and office space • Labs contain flume cupboards, freezers and secure storage Block 3 12,000 6,000 - 500 6,000 - - • 1 floor of animal facilities including labs, HEPA-filtration and waste management services
• Lab space • 1 modern floor, 1 older Block 8 7,500 5,000 - - 4,500 - 500 • Basement with servicing and cleaning areas
• Open plan office Block 11 7,000 5,500 - - - 5,500 - • Modern
• Lab and office space Block 12 5,500 3,500 - - 3,000 - 500
• Labs and write-up space • Some older areas in need of modernisation Block 14 4,500 2,500 - - 2,500 - - • Cell culture equipment and cytology facilities
• Lab space Block 17 500 500 - - 500 - -
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Summary Building GIA m² NIA m² Specialist Specialist Generalised General flexible Wider name lab/write-up technical lab/write-up office facilities facility • Contains the AstraZeneca ‘biobank’, a highly specialised facility
• Lab and office • Specialist facilities include high fume Block 19 13,000 8,500 - - 8,500 - - hood density
• Office, both open plan and individual units Block 20 2,000 2,000 - - - 2,000 - • Modern interior
• Lab space Block 22 8,500 5,500 5,500 - - - - • In-vivo facilities
• Lab and office space • Designed for pathology connected to Block 23 10,500 6,500 4,500 2,000 - - - animal facility
• Specialist technical facility • A DMPK (Drug Metabolism & Pharmacokinetics) facility Block 24 9,500 5,500 4,000 1,500 - - - • Includes 2 high density bioscience labs
• Specialist technical facility Block 25 2,500 1,000 - 1,000 - - - • Includes a high-pressure facility
• Open plan office Block 26 5,500 4,500 - - - 4,500 -
• Lab space • Modern, high quality Block 33 8,000 5,500 - - 5,500 - - • Includes a high quality NMR suite (500, 700 MHz facilities)
• Specialist facility Block 35 6,500 4,000 - - 4,000 - - • Includes a DMPK standard facility
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Summary Building GIA m² NIA m² Specialist Specialist Generalised General flexible Wider name lab/write-up technical lab/write-up office facilities facility • Also includes a new, high specification bioscience lab facility
• Lab and specialist facility • It includes In-vivo isolators • Also includes an imaging suite for Block 41 6,500 4,000 2,500 1,500 - - - animals • Other facilities include NMR and PET scanners
• Modern lab space • Used for discovery science, with cell Block 50 5,000 3,000 3,000 - - - - tissue line functionality
• Modern lab space • Specialist facilities including a Block 52 7,500 4,500 3,000 1,000 - - - compound library and high throughput screening
Total 126,000 80,0 00 22,500 7,500 34,5 00 15,000 1,000 Source: SQW
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Annex E: Key maps from the Witty Review
E.1 This Annex presents a series of maps that have been adapted from Sir Andrew Witty’s Review of Universities and Growth, published in October 2013. These maps, and corresponding tables, present contextual information relating to the following:
• Location of the Technology Strategy Board’s Catapult Centres
• Location quotients for employment in the Life Sciences by LEP area (2012 data)
• Top 20 UK HEIs in terms of Life Science -related research publications.
Location of the Technology Strategy Board’s Catapult Centres
E.2 The following map shows the location of the Technology Strategy Board’s Catapult Centres, with 13 in total. One of these focuses on the Life Sciences, although this is based in London. None of the Catapult Centres are in the North West of England.
Figure E-1: Location of the TSB Catapult Centres
Source: Sir Andrew Witty (2013) Encouraging a British Invention Revolution: Review of Universities and Growth
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Location Quotient of employment in Life Sciences
E.3 The following map shows the location quotient of employment in the Life Sciences in 2012, by Local Enterprise Partnership area, with the highest concentrations found in the Humber, Hertfordshire, Swindon and Wiltshire, and Oxfordshire areas.
Figure E-2: Employment Location Quotient 2012 – Life Sciences
Source: Sir Andrew Witty (2013) Encouraging a British Invention Revolution: Review of Universities and Growth
Location Quotient for Life Science-related research publications
E.4 The following maps and tables show the location quotients of Life Science-related research publications, splitting these across three categories, showing the Top 20 sites for each:
• An overall Life Sciences category
• Genetics and Synthetic Biology
• Regenerative Medicine.
E.5 Across all three categories, both the University of Manchester and the University of Liverpool feature in the top 20.
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Figure E-3: Life Sciences: Top 20 organisations (by publications)
Source: Sir Andrew Witty (2013) Encouraging a British Invention Revolution: Review of Universities and Growth
Table E-1: Life Sciences: Top 20 organisations (by publications)
Name Publications FWCI In global top 1% In global top 10% University of Cambridge 11,843 2.13 595 (5.0%) 3,481 (29.4%)
University of Oxford 13,345 2.13 588 (4.4%) 3,886 (29.1%)
King's College London 7,728 1.99 353 (4.6%) 2,079 (26.9%)
Queen Mary, University of 3,274 1.97 139 (4.2%) 870 (26.6%) London
Imperial College London 10,205 1.94 401 (3.9%) 2,689 (26.3%)
University of Leeds 4,192 1.94 161 (3.8%) 1,055 (25.2%)
GlaxoSmithKline 3,945 1.90 131 (3.3%) 860 (21.8%)
University of Edinburgh 7,441 1.89 265 (3.6%) 1,836 (24.7%)
University College London 13,911 1.87 451 (3.2%) 3,629 (26.1%)
University of Glasgow 4,748 1.85 127 (2.7%) 1,078 (22.7%)
University of Aberdeen 3,438 1.82 91 (2.6%) 706 (20.5%)
University of Manchester 6,948 1.80 221 (3.2%) 1,653 (23.8%)
University of Newcastle upon 4,023 1.78 132 (3.3%) 891 (22.1%) Tyne
University of Bristol 4,885 1.78 121 (2.5%) 1,019 (20.9%)
University of Southampton 3,417 1.77 95 (2.8%) 744 (21.8%)
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Name Publications FWCI In global top 1% In global top 10% University of Sheffield 3,902 1.72 95 (2.4%) 838 (21.5%)
Cardiff University 3,802 1.70 108 (2.8%) 829 (21.8%)
University of Liverpool 4,107 1.69 72 (1.8%) 801 (19.5%)
University of Nottingham 4,863 1.61 95 (2.0%) 940 (19.3%)
University of Birmingham 4,338 1.55 105 (2.4%) 884 (20.4%) Source: Sir Andrew Witty (2013) Encouraging a British Invention Revolution: Review of Universities and Growth
Figure E-4: Life Sciences – Genetics and Synthetic Biology: Top 20 organisations (by publications)
Source: Sir Andrew Witty (2013) Encouraging a British Invention Revolution: Review of Universities and Growth
Table E-2: Life Sciences – Genetics and Synthetic Biology: Top 20 organisations (by publications)
Name Publications FWCI In global top 1% In global top 10% Wellcome Research 345 3.16 38 (11.0%) 136 (39.4%) Laboratories
University of Cambridge 1052 2.42 40 (3.8%) 270 (25.7%)
King's College London 615 2.20 19 (3.1%) 128 (20.8%)
University of Oxford 984 2.16 36 (3.7%) 235 (23.9%)
University of Glasgow 373 2.14 10 (2.7%) 72 (19.3%)
Queen Mary, University of 425 2.06 6 (1.4%) 81 (19.1%) London
Imperial College London 1123 2.05 27 (2.4%) 244 (21.7%)
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Name Publications FWCI In global top 1% In global top 10% University of Dundee 252 2.02 8 (3.2%) 50 (19.8%)
University of Bristol 395 2.02 9 (2.3%) 67 (17.0%)
University of Edinburgh 712 1.92 21 (2.9%) 137 (19.2%)
University of Nottingham 495 1.86 12 (2.4%) 77 (15.6%)
University of Liverpool 371 1.86 6 (1.6%) 56 (15.1%)
University College London 1153 1.85 30 (2.6%) 202 (17.5%)
University of Newcastle upon 329 1.76 9 (2.7%) 51 (15.5%) Tyne
University of Southampton 303 1.76 7 (2.3%) 42 (13.9%)
University of Sheffield 344 1.63 2 (0.6%) 49 (14.2%)
University of Birmingham 440 1.50 4 (0.9%) 52 (11.8%)
University of Leeds 430 1.47 5 (1.2%) 62 (14.4%)
University of Manchester 719 1.46 7 (1.0%) 85 (11.8%)
Cardiff University 322 1.38 5 (1.6%) 32 (9.9%) Source: Sir Andrew Witty (2013) Encouraging a British Invention Revolution: Review of Universities and Growth
Figure E-5: Regenerative Medicine: Top 20 organisations (by publications)
Source: Sir Andrew Witty (2013) Encouraging a British Invention Revolution: Review of Universities and Growth
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Table E-3: Regenerative Medicine: Top 20 organisations (by publications)
Name Publications FWCI In global top 1% In global top 10% Cancer Research UK 155 2.84 10 (6.5%) 50 (32.3%)
University of Cambridge 761 2.72 39 (5.1%) 220 (28.9%)
University of Bristol 190 2.36 1 (0.5%) 33 (17.4%)
Queen Mary, University of 286 2.32 10 (3.5%) 51 (17.8%) London
University of Oxford 586 2.24 12 (2.0%) 128 (21.8%)
University of Edinburgh 456 2.16 18 (3.9%) 96 (21.1%)
University College London 1099 2.12 19 (1.7%) 194 (17.7%)
University of Liverpool 147 2.05 4 (2.7%) 14 (9.5%)
King's College London 529 2.04 10 (1.9%) 105 (19.8%)
University of Glasgow 198 2.04 4 (2.0%) 25 (12.6%)
Imperial College London 681 2.02 9 (1.3%) 114 (16.7%)
University of Southampton 144 2.01 2 (1.4%) 18 (12.5%)
NHS Blood and Transplant 177 1.89 3 (1.7%) 27 (15.3%)
University of Sheffield 306 1.87 6 (2.0%) 42 (13.7%)
University of Leeds 262 1.80 2 (0.8%) 34 (13.0%)
University of Manchester 438 1.74 7 (1.6%) 60 (13.7%)
University of Birmingham 215 1.64 2 (0.9%) 25 (11.6%)
University of Newcastle upon 247 1.58 1 (0.4%) 43 (17.4%) Tyne
University of Nottingham 382 1.56 4 (1.0%) 45 (11.8%)
Cardiff University 190 1.49 1 (0.5%) 17 (8.9%) Source: Sir Andrew Witty (2013) Encouraging a British Invention Revolution: Review of Universities and Growth
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