Life Sciences in the spotlight: British Patient Capital

Pamela: Hello everyone. I’m Doctor Pamela Walker, the Head of Life Sciences at Gate One and host of our Life Sciences in the Spotlight podcast series. The future of health is a topic we are all eager to predict, stretching from health and wellness and our own proactivity around longevity, all the way through to significant advances in life sciences and medical treatments.

That is why I am absolutely thrilled to welcome in conversation today Carmine Ciccelli, British Patient Capital’s Director of Life Sciences and specialist investor. Carmine has had his finger on the pulse of all things innovation in the life sciences space for many years now, not only in terms of specific trends and opportunity areas, but also how the UK market is taking significant strides in this space and how the US market drives specific dynamics.

I always learn incredible new insights from Carmine and so I’m thrilled to have him join me and share with all of us his latest views, insights and perspectives on cutting edge trends in the life sciences space.

Hello Carmine.

Carmine: Hello Pamela.

Pamela: So, shall we dive in and kick off with your high-level perspective on dynamics in the UK life sciences market over the past three years and what this means in terms of opportunity areas specifically.

Carmine: So, thank you again for having me as a guest on the podcast. It’s great to be here and I’ll dive right in. So, it’s clear it’s been a rollercoaster. For 2021 being a record high point, with 2022 being a tale of two halves. Deals slowed down significantly in the second half of 2022, and this dropped again in 2023. The second half of 2023 is looking like the low point, though, with 2024 starting strongly. Particularly for us at BPC, we’ve seen several life sciences ipos, public valuations are recovering and the XBI in the US is up almost 50% in the last 18 weeks. M and A has also been a feature of 2023, with aggregate deal value up 79% versus 2022 reaching $152 billion for the full year. This is the highest figure since 2019. In terms of opportunity, the UK has always had a lot of opportunity in therapeutic development, and we’re also seeing techbio emerging with good opportunities in medtech, research tools and reagents businesses and medical software.

Pamela: That’s really interesting. And I guess thinking back historically then, there has been a significant gap if we’re looking at market differences in this space. So specifically looking at the gap between the UK and the US in terms of market maturity, and I’d love to hear more about your specific perspective on that, really, the US, how the UK compares, and any sort of growth and dynamics you’ve seen recently.

Carmine: Yeah. So I think it’s clear that the UK has scientific excellence and commercial expertise. So, we have some of the best universities in the world. It’s three or four of the top ten. We also have major pharmaceutical companies like AstraZeneca and GSK. But undoubtedly there’s work to do from a funding perspective. BPC, as an investor, is looking to invest in fund managers and directly into companies, because we need to build the life sciences investment ecosystem in the UK to help both companies and the market mature.

Pamela: Definitely, that makes sense in terms of how the funding and innovation in this space has been maturing, and looking also at the size of our market as a really exciting launch pad for that kind of innovation versus the size of, say, the US market in terms of the dynamics across the different states, but also the pull and the maturity in terms of the different facets of the healthcare system.

So it’s really, really great to see that there’s this pull for UK innovation to really make a difference, and looking at the US market, to see all of the different dynamism in that space.

Talking about innovation, from your perspective, what role do you think tech and innovation is really playing in the space? Certainly you mentioned in medtech on its own, and tools and devices and digital, but also you mentioned tech bio, and then obviously, we know within the life sciences space, there is a huge amount of innovation that’s being boosted through digital data and tech. So, yeah, I would love your perspective on the contribution of, for example, digital therapeutics in this space.

Carmine: It’s a world of opportunity, I think, at the moment. So tech is really having many positive impacts in life sciences from improving drug discovery. So, we’re seeing many applications for driving efficiency in that pathway, and new technologies for discovering better drugs faster.

We’re also seeing the production of digital biomarkers, fully digital biopsies, which have similar performance to kind of traditional biopsy. So imagine being able to look at the whole of a patient’s organ without the need to ultimately put a needle through them, which is somewhat unpleasant.

Through to digital therapeutics. There are many digital applications out there, particularly in areas like mental health, where there’s real kind of clinical outcome and benefit, and also accessibility. So removing those barriers for patients to access therapeutics and access them on their own terms is a real advantage of technology and software.

We’re invested in Acurex, which is a company that enables the communication between patients and doctors. And ultimately, it means that they can read messages and respond when they have time, rather than needing to be there at a specific point in time, and the overall efficiency for the healthcare system of those kinds of software solutions really drives kind of broader benefits to the healthcare system, meaning that budgets can be allocated towards patient care rather than missed appointments or ultimately kind of patients that aren’t treated very well. And the economic impact of that is quite severe. It’s really helpful if we can treat patients quickly with great care, they can access it, and then ultimately can live full and happy lives. And that’s really why we’re all life science investors.

It’s really to help people get better and make the most of the opportunity in front of them. So digital solutions will transform the way doctors make decisions, patients access healthcare, and the way we treat patients ultimately.

Pamela: You’ve given some great examples there. So, it’s across the whole foundation of our healthcare infrastructure that we’re seeing transformation, and from digital data and tech in this space. And I guess maybe thinking a bit more specifically across this landscape, do you see areas of specific unmet need that you think could unlock significant growth and kind of turbocharge this transformation?

Carmine: Yeah, it’s a great one, mainly because there are different areas for different parts of life sciences. So, from a therapeutic perspective, you know, the autoimmune conditions and the inflammatory conditions are key to an awful lot of unmet medical needs. So, for disease areas like neurodegeneration, oncology, cardiovascular disease and metabolic disease, they’re all major challenges, as well as mental health.

And improving these unmet needs would drive, you know, significant growth, both in the industry, but both in the productivity of people, because, you know very well, people are ultimately more productive.

So from our point of view, driving those kinds of solutions, either be it through therapeutic or digital modalities, ultimately can improve kind of how we all live our lives.

And I also think there’s a really major opportunity at the moment in women’s health that could have a major impact on healthcare. You know, we’re already seeing an awful lot of focus on diversity in clinical trials. So, making better drugs and more precise drugs for the right patient groups and how we think about that question is really important in the future of healthcare, but also in making sure that people are appropriately treated in a way that’s very precise, and that ultimately unlocks value based care and linking how people ultimately benefit from treatments to the impact in society.

Pamela: I completely agree with you, and I don’t know if you saw it just as an aside, but a couple of weeks back, I was really pleased to see the government’s commitment to unlocking more diversity in clinical trials, specifically around the development of medical devices. To make sure that we’re removing biases within the production of the devices themselves, but certainly within the trialling and the regulatory process of devices, and I think this is a huge step forward to your point, to be able to give more targeted and effective care, but also recognising the diversity across the whole customer and consumer base. As we move more towards consumer-based healthcare, we need to have solutions that match the consumer base and that aren’t just biased towards one specific group. So, it’s really fantastic to see that in addition to the innovation, the UK government’s really at the forefront of driving this global initiative.

Carmine: Yeah, and even down to making sure that we have balanced boards in companies where we can be supporting female CEO’s. So from our point of view, as an investment fund, we’ve invested in companies. Around 30% have female CEO’s and the market’s about 15. So that really is something that’s quite positive from our point of view. But also we found that aligns quite strongly with our vision for how these companies grow and develop and ultimately provide patient care in the way that we would like to see with respect to the diversity point at all levels of organisations and in divisions as well.

Pamela: Absolutely. I had one more question for you, Carmine, before you leave us for the day. And that’s really for your view on if you had to choose three critical levers over the next five years that will be most transformative to how we experience healthcare treatments as a result of innovation, what would they be?

Carmine: That’s an interesting challenge in terms of narrowing it down to three. All of them really converge around collaboration. So collaboration and problem solving, the key kind of levers to make all of that really work are really in and around a bit of implementation and product optimisation and understanding and patience on both sides. So we need to ultimately accept that the prize at the end of this is very valuable to how we live, work and operate in the medical industry, but it will take a little bit of time to get there and to encourage people ultimately to get to the right point in terms of those levers.

It’s really about the ease of implementation and the communication in that conversation for how not only a solution is designed because it has to meet many people’s needs, it’s the patient, it’s the hospital, it’s the regulator, it’s the commercial argument as well. And solving for that and making sure everybody is heading towards the common goal of improving patient care and wants to ultimately kind of commit the time and resources to doing that will mean we get there.

So there is an element of focus on really understanding all people’s perspectives and all stakeholders perspectives in getting to that point that we all ultimately want to reach. But if I was to say kind of things that I would hope to see, collaboration, a bit of patience and flexibility on all sides, but ultimately that understanding to achieve that higher level and higher standard of patient care.

Pamela: Thank you so much, Carmine, for joining me and sharing these perspectives with us today. We’ve covered a lot of ground in a short period of time and it’s been really illuminating hearing your point of view.

And that draws our podcast to a close. A big thank you to our guest today, Carmine from British Patient Capital, your insights have been invaluable and like you, I’m very much looking forward to seeing what the industry has in store for us over the next twelve months and beyond.

So thank you so much again, Carmine.

Carmine: And thank you very much, Pamela. It’s been great to be a guest and I really enjoy our conversations.