GenAI in the life sciences industry
Generative AI (GenAI) is making significant strides in the life sciences sector, transforming various aspects of research and development. There are GenAI models that can generate synthetic data to augment existing datasets, improving the performance of AI models in tasks like medical image analysis and accurate diagnosis. GenAI can also simulate virtual patients for clinical trials, helping to predict how real patients might respond to new treatments. However, although GenAI has shown great promise, not many organisations within the sector have been able to build on this promise so far. According to Deloitte, more than 90% of biopharma and medtech leaders have acknowledged how impactful GenAI could be. McKinsey meanwhile, has looked at how much progress life sciences organisations have made with this. In summer 2024, the company surveyed more than 100 pharma and medtech leaders responsible for their organisations’ GenAI initiatives. Whilst 32 percent confirmed they have taken steps to scale the technology, only 5 percent say they have realised GenAI as a differentiator that generates financial value.
Examples of organisations who are making notable advancements in this area however, include Novo Nordisk Pharmaceuticals. They formed a partnership with a South-Korean startup, Kakao Healthcare, through which they aim to offer advanced digital health services that will help chronically ill people better manage their conditions. The biotech company Insilico Medicine has leveraged GenAI to develop five successful compounds, including a potentially revolutionary treatment for Inflammatory Bowel Disease (IBD). In January of this year, the company announced positive results from two Phase I studies of the drug ISM5411, a novel gut-restricted and PHD specific inhibitor designed and optimised with the support of Insilico's Chemistry42 generative reinforcement learning platform for the treatment of IBD. It will be interesting to observe how many other life sciences make advancements in this area in 2025.
London as a life sciences hub
London is home to Europe's largest life sciences innovation cluster, with the sector generating £11.6 billion in turnover during 2021-2022. The city boasts world-class research institutions like the Francis Crick Institute and the Institute of Cancer Research, and it ranks first in Europe for STEM investment. London's life sciences ecosystem includes top universities, research hospitals, and numerous clinical research facilities. Additionally, the city is a magnet for investment, with significant venture capital funding and a thriving commercial ecosystem. By 2032, London will have an additional 6.2M ft² of Life Science lab and office space. These developments will accommodate 80,000 direct jobs. By 2030, London’s economy is predicted to have contributed an additional £13.35BN to UK R&D spending, which is equivalent to the cost of 3,300 phase I clinical trials.
Camden Council have just announced that it has approved plans for Euston Tower, in Euston Road, London, to be transformed into a life sciences hub. The revamped tower will be home to new offices, including lab-enabled workspaces. Euston Tower, originally built in 1970, has stood vacant for four years. The Town Hall’s planning committee this week gave consent to developer British Land’s bid to partially demolish the current building and turn it into a 32-story mixed-use tower. British Land said it was “delighted” to have won approval to construct a “world-class science and technology building”. “Euston Tower will be a blueprint for sustainable development, delivering an all-electric building fit for the future”, a company press release said.
UAE enacts new pharma law
In October 2024, the United Arab Emirates (UAE) Government issued a new Federal Decree-Law No. 38 of 2024 to regulate medical products, the pharmacy profession and pharmaceutical establishments. This new law replaces the previous legislation from 2019 and aims to enhance safety, streamline approval processes, and support the UAE's goal of becoming a trusted center for pharmaceutical and medical industries. The law includes clearer classifications for medical products, biopharmaceuticals, food supplements, cosmetic products, and genetically modified organisms intended for medical use. The Emirates Drug Establishment (EDE) will now oversee medical product approvals, pharmacovigilance, and market monitoring, consolidating regulatory authority. The EDE grants marketing authorisations based on enhanced quality and safety standards, including conditional approvals for life-threatening conditions and emergency use authorisations. Stricter requirements for post-market surveillance, adverse event reporting, and product recalls have also been mandated. There will be stronger enforcement measures, including penalties for non-compliance with marketing standards and product quality requirements. Overall, these changes are expected to improve the regulatory landscape for pharmaceuticals in the UAE, enhancing consumer protection and encouraging innovation.
Competition for fundraising in life sciences
The competition for fundraising in the life sciences industry remains intense into 2025. The fundraising environment has been gradually recovering from the post-pandemic lows, but the pace has been slower than expected, according to research conducted by BDO. However, the BDO's research has found that venture capital funding is returning, signalling a stabilisation within the sector. They have also found clear indications that investors are becoming more discerning, focusing on companies with strong management teams, solid clinical data, and the ability to hit fundable milestones. They are less likely to be swayed by bold claims without substantial evidence. In particular, areas like antibody-drug conjugates (ADCs) and glucagon-like peptide-1 receptor agonists (GLP-1s) are attracting significant interest from venture capital and public markets.
The timeline for closing fundraising rounds however continues to be longer than pre-pandemic times. With less competition among venture firms, investors do not feel the same pressure to rush into deals. Also, the industry is seeing fewer down rounds compared to previous years, meaning companies are less likely to dilute their valuation by selling shares at a lower price than in previous rounds. Overall, it is fair to say that, while there are opportunities for innovation and growth, life sciences companies need to be strategic and well-prepared to attract funding in this competitive environment.
MHRA and NICE to speed up medicine approvals
The Medicines and Healthcare products Regulatory Agency (MHRA) and the National Institute for Health and Care Excellence (NICE) have announced joint regulatory reforms aimed at streamlining processes and enhancing patient access to innovative treatments. The MHRA and NICE will develop a joint process to provide concurrent marketing authorisation and technology appraisal. This aims to reduce the time it takes for new treatments to reach patients. According to MHRA data, marketing authorisations were running more than 100 days over their statutory limits at the beginning of 2024. MHRA data for January 2024 show that current timescales for regulatory decisions for established medicines in January 2024 were an average of 333 days for national routes, falling outside the statutory timescale of 210 days.
The reforms will also foster closer collaboration between the two agencies, ensuring that regulatory and health technology assessment processes are more aligned and efficient. The new measures will prioritise patient safety while also supporting the growth of the life sciences sector by facilitating quicker access to innovative medical products. The reforms will introduce clearer and more proportionate requirements for medical devices, providing more certainty for manufacturers. These changes are expected to benefit both patients and the healthcare industry by ensuring that safe and effective treatments are available more quickly.
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