BUSINESS ENVIRONMENT
Life Science Opportunity Zones (LSOZ)
Life Science Opportunity Zones are part of a government initiative designed to showcase some of the UK’s best science park opportunities for life science investors. Seven locations have been awarded the status of Life Science Opportunity Zone (LSOZ) to help raise their profile and better enable them to attract investment from national and international businesses linking research and business expertise. The LSOZs are:
Charnwood Campus, Loughborough, Leicestershire
Stevenage Advanced Therapies Campus, Stevenage, Hertfordshire
Birmingham Life Sciences Park, West Midlands
Harwell Science and Innovation Campus, Oxfordshire
Cambridge Biomedical Campus, Cambridgeshire
Porton Science Park, Wiltshire
Discovery Park, Sandwich, Kent
Patent Box
The Patent Box is designed to encourage companies to keep and commercialise IP in the UK by providing a reduced rate of corporation tax of 10% for profits attributable to patents. This relief was introduced in phases from 2013 through to 2017. If your company holds certain other medicinal or botanic innovation rights it can also take advantage of Patent Box benefits. You can only use the Patent Box if your company is liable to Corporation Tax, makes a profit from exploiting patented inventions, owns or has exclusively licenced-in the patents, and has undertaken qualifying development on the patents. If you elected to the Patent Box after 30 June 2016 benefits are restricted if your company incurred expenditure in acquiring the patents and made payments to connected parties for their R&D expenditure. The R&D fraction shows how much this affects the calculation.
R&D Tax Relief
The UK offers very generous R&D tax credits in addition to the Patent Box. More information can be found from the linked document produced by HMRC.
FUNDING
British Business Bank / British Patient Capital
The British Business Bank (BBB) is a state-owned economic development bank established by the UK Government with the aim of increasing the supply of credit to small and medium enterprises as well as providing business advice services. It seeks to make finance markets work better for small businesses in the UK at all stages of their development. British Patient Capital (BPC) is a division of BBB with £2.5 billion to invest over ten years in venture and venture growth capital. It is the largest domestic investor in venture and venture growth capital in the UK. Historically, a lack of patient capital has held back many firms from scaling up and reaching their full potential leading some to be sold too early to trade buyers and failing to realise their economic promise within the UK. After the Patient Capital Review, BPC was established in 2018. The aim is to work alongside institutional investors to unlock an additional £5 billion of patient capital investment. Once it has established a strong track record, built its portfolio and proved the value of patient capital as an asset class, the intention is for BPC to be privatized.
Enterprise Investment Scheme, VCTs etc.
The Enterprise Investment Scheme is one of four venture capital schemes under which UK companies (SMEs, Startups and Social Enterprises) can raise money and receive tax reliefs for certain individuals. There is no minimum but there are maximums depending on the scheme opted for. The schemes are the Enterprise Investment Scheme (EIS), the Seed Enterprise Investment Scheme (SEIS), Social Investment Tax Relief (SITR), or a Venture Capital Trust (VCT). The limit for EIS and VCT investments is £12 milion, for SEIS investments is £150,000 and for SITR investments is £1.5 million.
Innovate UK
Innovate UK is the UK’s Innovation Agency and runs a variety of mechanisms for funding innovative UK companies looking to test their ideas and develop innovative products and services. Funding available can range from £25,000 to £10 million. It runs grant funding competitions for innovation projects led by UK-based business or research and technology organisations. The agency also offers other forms of funding, including a pilot programme of innovation loans which are available to eligible SMEs that want to carry out late-stage innovation projects and can seek to borrow anywhere from £100,000 to £1 million. Mechanisms include an Industrial Challenge Fund, Smart Grants, Knowledge Transfer Partnerships, Small Business Research Initiative, Innovation Loans, Investment Accelerator, Innovation to Commercialisation of University Research (ICUREs), Biomedical Catalyst, Energy Catalyst, International Programmes, and Managed Programmes.
Invention for Innovation (i4i)
The aim of the i4i programme is to de-risk early stage projects that have a strong potential for commercialization and acceptance for use in the NHS, making them attractive to follow-on funders and investors. It funds collaborative research projects that have demonstrated proof-of-principle and have a clear pathway towards adoption and commercialization. The expected output is an advanced or clinically validated prototype medical device, technology or invention. I4i has three funding streams: Product Development Awards (PDA), Connect and Challenge Awards. I4i funding committees are multidisciplinary, comprising academic, clinical and commercial experts, as well as patient and public members.
SBRI Healthcare
SBRI Healthcare is an NHS England and NHS Improvement initiative, supported by the Academic Health Science Network and managed by LGC Group. It aims to promote economic growth by finding solutions for identified healthcare problems. The programme is based on a two-phased development approach, with projects starting with initial feasibility and then able to move on to more detailed product development. Phase 1 contracts for feasibility testing are valued at up to £100,000 and last for six months. Phase 2 contracts for prototype development are worth up to £1 million over one year. Since 2008, the NHS programme has supported over 200 companies to develop innovative technologies that match the needs of the health service.