This update focuses on: the new clinical trials legal framework designed to heighten interest for planning and conducting clinical trials in the EU; the UK government’s new migration regime to make it easier for businesses to hire highly skilled workers in sectors such as life sciences; digital transformation in the life sciences sector; the outlook for M&A activity in pharmaceuticals and life sciences; and the latest on longevity in life sciences.
From 31 January 2025, all clinical trials in the European Union (EU), including ongoing trials that were approved under the previous legal framework, the Clinical Trials Directive (CTD), are now governed by the Clinical Trials Regulation (CTR) 536/2014. This marks the end of a three-year transition period, during which more than 5,000 clinical trials were transitioned to the CTR through submission to the Clinical Trials Information System (CTIS), the single-entry point for sponsors and regulators for the submission and assessment of applications for clinical trials in the EU. The European Medicines Agency (EMA) has confirmed that trials which are ongoing and have not been moved to the new system may be subject to corrective measures applied by EU member states.
EU lawmakers designed the CTR to heighten interest within the healthcare industry for planning and conducting clinical trials in the EU, which experienced a decline after implementing the EU Clinical Trial Directive 2001/20/EC more than two decades ago. In fact, Europe's share of global commercial clinical drug trials was almost halved as companies in the pharmaceutical sector took advantage of more straightforward regulatory regimes in the United States and China. Lawmakers hope to better harmonise processes to ease drug development for stakeholders who have worked in different jurisdictions and across individual EU member states under the previous framework.
The UK government wants to overhaul the UK’s migration regime to make it easier for businesses to hire highly skilled workers in sectors such as artificial intelligence and life sciences, the UK Chancellor has said. Visa reforms could potentially have a significant impact on the life sciences sector by attracting global talent. Speaking to business leaders in Davos, Rachel Reeves said the government would propose visa routes for these professionals in an immigration white paper to be published this year.
This is part of the UK's strategy to boost economic growth by attracting workers in key sectors such as clean energy and biosciences, particularly at a time of concerns that President Trump’s immigration policies will push skilled professionals out of the US, prompting a global race for talent. It would also build on the unlimited visa offers to scientists made by the previous UK government. The proposed visa reforms are designed to make it easier for highly skilled professionals in the life sciences to work in the UK, thereby enhancing the country's research capabilities and fostering innovation.
Digital transformation is at the forefront of the life sciences sector, propelled by developments in cloud computing, generative artificial intelligence (gen AI), and various digital innovations. This transformation is notably complex within the life sciences due to the need for cross-disciplinary collaboration. The urgency to complement investments in data generation technologies with robust software and data infrastructure may lead to overlooking foundational aspects. As data generation accelerates in speed and volume, the perennial challenge is ensuring the right data reaches the right hands.
Data acts as the core asset of the pharmaceutical industry, necessitating it to be accessible, interoperable, and dependable. Consequently, digital transformation is poised to significantly influence organisational strategies by 2025, with around 60% of executives identifying gen AI and digital transformation as critical trends under their surveillance. Analysis suggests that up to 11% of future growth in the value of biopharmaceutical companies will be driven by their AI investments. To harness this potential fully, leaders in the life sciences must focus on strategic issues that gen AI can substantially enhance. It is crucial for them to articulate these issues clearly to both stakeholders and technical experts, while also ensuring the infrastructure required for the effective and scalable deployment of gen AI models is established.
The UK healthcare sector experienced a remarkable surge in deal value, leading all sectors with an almost 80% increase from £8.6 billion in 2022 to £15.4 billion in 2023. This sector stood out as the only one to witness a growth in deal volume amidst an overall 18% reduction in the UK's deal activity. Private equity (PE) involvement in the UK health sector deals rose to 57% in 2023, up from 46% in 2022, surpassing the industry-wide average of 42%. Notably, the pharmaceuticals and life sciences sector accounted for three of the top 10 UK deals in 2023.
Moving into 2024, while the global mergers and acquisitions (M&A) deal value remained largely unchanged, the pharmaceuticals and life sciences M&A saw a slight decrease compared to the previous year, with the number of deals declining by 5.2%. Looking ahead to 2025, the healthcare and life sciences investment landscape in the UK is anticipated to rebound, driven by easing credit markets and strengthening investor sentiment. Despite the recent challenges in exiting healthcare and life sciences investments, there is an increased focus on investor distributions and the availability of capital for new investments. Investors are expected to contend with some regulatory challenges as they re-enter the deal market. However, there is a sense of optimism for a more active year in UK healthcare and life sciences transactions, with an expected uptick in exit activities particularly within the biosciences and healthcare services sectors.
Longevity in the life sciences sector is a rapidly evolving field. It focuses on extending both lifespan and health span, in other words, how long we stay healthy. Cell and gene therapies are at the forefront of longevity research. These therapies involve modifying genes or cells to treat or prevent diseases and they hold promise for addressing the root causes of aging. One example of this is using gene replacement, so as to replace defective genes with healthy ones. There is also epigenetic modifications, which involved altering gene expression without changing the DNA sequence. By modifying how genes are expressed, scientists can potentially reverse age-related changes. Stem cell therapies are another method being explored to regenerate damaged tissues and organs. These therapies can replace aged or damaged cells with new, healthy ones, thereby improving overall health. Finally, there is RNA therapy, which involves modifying RNA to correct genetic defects or enhance the expression of beneficial genes. This approach can be used to treat a variety of age-related conditions. These therapies hold immense potential for treating the root causes of aging and preventing age-related diseases. The goal is not just to extend life but to ensure that people remain healthy and active for as long as possible.
