Last Thursday, chancellor Jeremy Hunt announced new measures for smoother medicine approvals in the UK, increased support for R&D, and a simplified tax system for SMEs. UK biotech company, Nevrargenics shared its position on the 2023 Budget.
The chancellor also announced ambitions for the UK to become a “life sciences superpower,” which included the announcement of an enhanced credit that SMEs who spend 40% of their expenditure on research and development can claim a credit worth £27 for every £100 they spend. From April 2023 until the end of March 2026, companies can claim 100% capital allowances on qualifying plant and machinery investments.
The Budget pledged by the chancellor was said to be essential in achieving the framework’s goals of financing innovative science and technology start-ups across the UK, boosting investment in research and development and forging a pro-innovation culture throughout the UK’s public sector to improve public services.
Here's how CEO professor, Andy Whiting of Nevrargenics - an early stage Durham based drug discovery company developing treatments for neurodegenerative diseases - responded to the announcement.
Regarding the R&D tax relief, Whiting commented:
"Drug development is inherently risky but vitally important for improving access to new treatments. There are over a billion people suffering from neurodegeneration worldwide, so there is an urgent need to develop new treatments in this area. Nevrargenics is developing cutting edge medicines for diseases including MND, Alzheimer’s and Parkinson’s, so the new R&D scheme for loss making SMEs announced in the Budget is great news and a marked improvement on the much less generous scheme announced in the Autumn Statement.
"We are currently raising investment and R&D relief plays an important cash flow function, enabling every pound invested in research to go the extra mile. This measure will make a huge difference to our ability to accelerate the development of new drugs like NVG0645, which is currently in pre-clinical development studies and has demonstrated exceptional CNS exposure."
Responding to the full capital expensing, Whiting said:
"While full capital expensing is attractive for larger businesses, this measure is of minimal use to spinouts and start-ups in our sector because many are unprofitable for many years and rarely make capital equipment purchases until they are more mature. Full expensing is a relatively blunt measure designed to have wide effect on many businesses, and while there is obviously a place for this, unfortunately it does not support the life science sector in a targeted or useful way."
Whiting also commented on Nevrargenics' position on the MHRA approval changes:
Announcements on the MHRA are welcome, particularly for patients, but are unlikely to significantly impact many pharmaceutical start-ups."
"The MHRA has been leading the way in recent years on regulatory excellence, especially following the Covid vaccine roll-out. So while near automatic-sign off for medicines already approved by other regulators may accelerate regulatory approval, providing potentially improved choice for patients, it is unlikely to unlock any significant new advances or strengthen the UK life sciences sector.
"The additional funding of £10m to set up a new swift approvals process for cutting edge medicines is also welcome, but we need to see more on the detail of how this would work. The medicines we are developing at Nevrargenics are novel and potentially disease-modifying, which would seem to meet this criteria, but clear plans need putting in place for how the MHRA will become more dynamic - for example by using innovative trial designs to speed up the research and roll-out of innovative new treatments."