The story has achieved almost mythical status. One day in February 1953, Francis Crick strode into The Eagle, a local haunt for University of Cambridge scientists, to declare that he and his American collaborator James Watson had discovered “the secret of life” – DNA.
It’s a moment which lives on in The Eagle’s signature ale, served up at the bar to countless tourists on the Cambridge history trail.
The discovery of DNA paved the way for an explosion of research to develop drugs and a range of other products. These days, biotech is big business in the city.
“We’re really excited about it,” says Dr Mike Anstey, of venture capital firm Cambridge Innovation Capital. “There’s a very strong argument that Cambridge is the leading ecosystem for life sciences and biomedical innovation in Europe, only third globally to Boston and Silicon Valley.”
It would be easy to assume that this all has its roots in the university. But the city’s prowess in biotechnology runs deeper than that, claims Anstey. “The university is clearly the epicentre of the cluster, but what’s happened is almost the perfect storm.
“Now you’ve got this interesting mix of early stage companies, academic institutions and large corporates all mixing around in a medieval village.
“And that means interesting things happen, right?”
It’s not difficult to see what he is referring to. Cambridge is now home to around 430 life sciences companies – businesses, which according to Pitchbook, attracted $72m (£60m) in venture capital funding last year.
Sites such as the Babraham Research Campus, a Government-backed bioscience hub, and the Cambridge Biomedical Campus, where companies work alongside the university teaching hospitals, are almost at bursting point.
Science, not valuations
The biggest business at Babraham is Kymab, which is developing antibody-based therapies and is touted as one of the UK’s most likely “unicorns” of 2019, meaning it is expected to achieve a valuation over $1bn.
“We just crack on and develop our drugs,” shrugs Anne Hyland, a biopharma veteran and Kymab’s chief financial officer. “Science is the big driver here, not valuation. It’s a long time since the UK created really big companies in the space, but hopefully we can … ultimately be as big as AstraZeneca or GlaxoSmithKline.”
Cambridge certainly has the science – and talent – to create organisations of this size. What it hasn’t historically been so good at is preserving their independence.
Cambridge had a number of “early wins” in biotech, one of those being Solexa, a pioneer in DNA sequencing. Another was Cambridge Antibody Technology (CAT), the founder of which received a Nobel Prize.
These days CAT is part of AstraZeneca, and Solexa was swallowed up by Illumina.
In biotech, such deals aren’t rare. But questions over why so many UK biotech companies sell out too early have been around for a while, says Andy Richards, a biotech entrepreneur.
“There are lots of examples of ventures that have been sold early,” he says. “This wasn’t always down to a lack of ambition. The reason people sold early was often wholly logical, and based on gaps in the financing continuum.”
The trend has been blamed on the challenge of raising venture capital funding in the UK to help companies become global in scale.
That capital is, finally, starting to appear. Investors from Boston, Silicon Valley, and Asia are increasingly focused on Cambridge, each bringing larger and larger chequebooks.
China, in particular, is starting to make a real dent. “I’ve seen a lot more Chinese investors on startup scouting trips in Cambridge than US,” says Fiona Nielson, chief executive of genomic data start-up Repositive.
Chinese venture capitalists have been investing more of their cash into British start-ups for years. The total amount trebled between 2015 and 2017.
But 2019 may prove somewhat less lucrative. In biotech, and technology more generally, VC investment levels have dipped amid uncertainty over talent and regulations after Brexit.
Moreover, biotech can prove a trickier industry for fundraising than others. “The challenge isn’t raising money in tech or life sciences, but raising money at the convergence point of the two,” says Hakim Yadi, the co-founder and chief executive of Closed Loop Medicine. His business has developed technology that tracks how a drug is affecting a patient, and alters their prescription accordingly.
Yadi says: “Traditional tech entrepreneurs have a very different investment model and thesis … compared to the life science investors who have got a much longer timeline and larger quantum. Finding investors who understand both, they’re the ones who are really exciting.”
Cash doesn’t just come from investors, though. Many biotech businesses partner with large pharma companies, agreeing licensing deals to get extra money and infrastructure.
And this, together with M&A opportunities, is bringing the heftier corporates into the city.
“You can tell there’s something different here now,” says Yadi. “It’s moved on a step.”
Cambridge may soon house a cluster of biotech unicorns, but for many of the scientists, the real progress will come with the discoveries they make.
“And who knows?” Yadi says. “Maybe soon we’ll have another landmark moment, another Watson and Crick in The Eagle. Or, maybe it’ll be a different pub this time.”