In episode four of Optimum Perspectives Podcast, our in-house IR expert, ex-Fund Manager Eva Haas interviewed Dan Mahony, Chairman of the BioIndustry Association (BIA), following his appointment as UK Life Sciences Investment Envoy to hear his plans for championing the UK’s Life Sciences industry.
Dan’s circuitous and unplanned journey to his current role involved among many experiences a freezer incident early on in his career which caused him to lose a year’s worth of work overnight, discouraging him from pursuing scientific research which may, in hindsight, have been fortuitous in prompting a move into financial research and life sciences investment. Following an illustrious career in this field and a stint as Entrepreneur In Residence at Evotec AG Dan was asked late last year to take on the role of Life Sciences Investment Envoy for the UK Government. Despite having a sabbatical planned at the time, Dan took on the task, feeling it to be important to BIA members and the sector as a whole to ignite domestic investment in UK Life Sciences.
Through his new role, Dan hopes to be able to address the challenge of translating the UK’s “great science” into big companies, something he believes has been frustratingly difficult in recent years. Pointing to the steady “de-equitisation” of the UK economy over the last 20-30 years which has seen investors with a long-term view, such as pension funds, paradoxically veering away from equities, the asset class that offers the best long-term returns, Dan hopes to make the most of the Government’s willingness to implement the regulatory changes needed to unlock growth capital from pension funds to help scale our country’s life sciences companies. He hopes to “rebuild our financial ecosystem” bringing together investors from all stages of the journey – seeds to Series C – with the aim of having at least one UK-based investor either leading or heavily involved in every growth capital fundraise alongside foreign direct investment. This, he believes, will enable companies to build stronger roots here in the UK which, in turn, will lead to more jobs and boost domestic intellectual property.
His overriding aim is to help the UK realise the benefits of investing in pioneering ventures which, while representing some uncertainty, can deliver the kinds of returns that will drive innovation and productivity, and result in the level of GDP growth that is so lacking in the UK economy today. He believes passionately in the talent and knowledge we have to offer across the whole country but fears “the availability of capital means risk takers are looking more to the US”, something we need to fix soon “otherwise the ship completely sails”.
Dan highlights Cell & Gene Therapy and Genomics as two areas in which the UK has a global lead, stressing the importance of translating that knowledge into commercial application before our lack of manufacturing capacity causes all expertise to disperse elsewhere. Flagging the NHS as in “crisis management”, he warns against placing it at the centre of any Government-led life sciences plan, as its cash conserving approach (due to highly stretched resources) and lack of capacity renders it unable to bring about meaningful execution. Rather than try to “boil the ocean”, Dan advises we focus on one or two areas that offer realistic prospects and start by delivering on these in a meaningful way.
He believes politicians are listening, helped by the recent SVB banking crisis which, far from weakening our position, strengthened the UK by shining a light on the importance of our Life Sciences sector and demonstrating our ability to fix the crisis without the need for a government bail-out.
HSBC sees a real opportunity to create a growth capital bank. Alongside this, Dan points to the quality of UK management teams and budding entrepreneurs, together with our improving ability to translate the UK’s pioneering science into world leading companies, as strong reasons for optimism as he strives to lay the foundations for a future where the UK Life Sciences industry flourishes on a global stage in the decades ahead.
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