CEO Update by
John Harris, CEO, OBN
As the country returns to some semblance of normality, despite the recent guidelines, I’d like to take the opportunity to bring our Members, Sponsors and Supporters up to date with the world of OBN.
OBN responded quickly and decisively to the unprecedented challenge that COVID 19, the lockdown and subsequent restrictions brought and I am delighted and proud of the OBN team’s response to such extraordinary circumstances, not least of which entailed the successful transformation of BioTrinity® from a physical event to become the UK’s first fully digital conference in the tightest of timescales.
BioTrinity is responsible for a very high proportion of annual UK Life Sciences investment (> £5.2 billion over the past 8 years) as well as facilitating major collaboration opportunities with Big Pharma, so not going ahead would have resulted in a significantly reduced level of funding throughout 2020 with negative economic consequences for the whole sector.
Our delegates value the opportunities to connect, do business and find investment opportunities, and most had already made substantial preparation for the event, so we successfully pivoted and delivered a very high-quality digital event encompassing the full range of panel discussions, BioLaunchPad® presentations, virtual exhibition, and on-line one-to-one partnering through our advanced 'HelloPartnering' system. As one senior Pharma executive subsequently commented, ‘BioTrinity 2020 has set the benchmark for such events.’
Together with our international partners, OBN also delivered a highly successful digital conference at BIO US in June; the International Cancer Cluster Showcase (ICCS), and included OBN’s participating companies, Cytoseek, Oxford Vacmedix, and PsiVac.
On a broader basis, continuing interaction, even if on a virtual basis, was paramount in promoting a sense of community and maintaining economic activity, developing and implementing an internal action plan with staff and continuing to offer high levels of support to our Members. We immediately launched a COVID-19 platform on our website for organisations to self-post and share ideas, projects and requests around PPE, equipment, and numerous other factors, to get messages out widely and quickly, we maintained regular News bulletins, issued the 2nd edition of our CONNECT e-magazine, delivered a range of webinars in partnership with many of our members, training via BioLearn Digital and e-delivery of our SEBC Breakfast and BioTuesday® events, facilitating interaction, learning, and fostering business opportunities.
Early on in the lockdown, digital events attracted an audience intrigued by the novelty, plus, it really was a case of go digital or do nothing. However, it is becoming increasingly clear that ‘digital fatigue’ is now setting in, with the desire to return to physical events at the earliest opportunity – humans by their nature are social animals and there is no real substitute for high quality events that bring people together in person to interact and do business.
With that in mind, and the announcement of the Government restrictions on conferences due to being lifted from 1st October, we are excited to be delivering BioForward® on the 5th October at the King’s Centre, Oxford, as a physical event with digital content. Not only is this likely to be the first UK Life Sciences conference held post-lockdown, the ‘hybrid’ format is also a first for the UK – as usual, OBN leads the way!
To allay safety concerns, the venue allows one-way traffic flow and social distancing that substantially exceed the new requirements. Our prime concern remains the safety and wellbeing of all our delegates, OBN staff and facility support staff so we will not only meet but surpass all Government requirements to offer a superb conference in as safe an environment as humanly possible.
In order to facilitate the re-building of contacts and community in the sector, we have decided to offer every R&D company (whether an OBN Member or not) one free ticket to this conference to kick-start business activity and rebuild confidence.
IMPACT ON FUNDING
Raising capital, especially for pre-revenue technology-based firms has become a great deal harder during the pandemic.
Market values plummeted 30% in around three weeks at the start of the pandemic and Investors are nervous about moving cash around in the current environment particularly since for many their current investments have been dramatically marked down in terms of their value.
Most funders are holding their investments and waiting for recovery, rather than liquidating at a much lower value and then reinvesting. For those holding private investments, attempting to recoup cash from balance sheets will be extremely tough.
Interaction with potential investors has already become more difficult – most investors generate much of their deal flow from direct contacts made at credible pitching events or conferences (~60%) and this is a route that has been cut off during the crisis.
In this challenging environment, the risk of small companies simply running out of operating capital because they fail to fund-raise adequate amounts in sufficient time cannot be underestimated, so advance planning of capital raises has never been more important.
With this in mind, OBN worked on a major funding initiative that was designed to help alleviate these issues and enable companies to access the liquidity they need to continue to function and grow, launching OBN Ventures® (OBNV) during BioTrinity in late April 2020.
OBN Ventures is a wholly owned subsidiary of OBN (UK) Ltd, and offers a sophisticated FCA-approved on-line investment platform which is designed to bring a wide range of Investors together with early-stage Life Sciences and related companies that are seeking seed / early stage investment.
To find out more about OBN Ventures then please click here.
So, despite the considerable challenges the sector is currently facing, OBN has always taken a strong and practical leadership position in the community and will continue to do so, to the benefit of all.
SO WHERE ARE WE?
Months of lockdown have clearly demonstrated that the vast majority of British people are adults and can be trusted with making sensible decisions about their health, although they do deserve coherent, consistent, and intelligent decision-making from Government.
‘Following the Science’ has been a convenient justification for choices made but equally, following science means living with uncertainty. Indeed, following the science is not at all easy or even possible when you are dealing with a new pathogen where scientific fact has yet to be established. Rather, what we have received is the ‘opinion’ of a limited range of scientists which is a very different thing, and many other scientists have expressed alternative views but have not really been listened to by Government.
It is now becoming obvious that Covid is far from the existential threat that was initially feared. It is not an extraordinarily lethal pathogen, just a nasty one, similar to many others in our history.
Paul Tambyah, President-Elect of the International Society of Infectious Diseases, recently reported that the prevalent Covid strain in the UK is now D614G which is a mutated strain that is ten times more infectious but much less deadly than initial strains. Assuming Dr. Tambyah is correct, such a development is hardly a surprise because it is in the virus’ interest to infect more people but not kill them in order to ensure its own survival.
Death rates have been coming down consistently despite spikes in infection levels and whilst treatment regimens have undoubtedly improved, if the inherent lethality of the virus is also reducing, then this could be a significant factor to explain this trend.
So, it makes no sense whatsoever to ‘follow the science’ on Covid to the exclusion of everything else, especially trashing our whole economy in the process. No nation ever improved its health by going bust.
Undoubtedly the lockdown has itself created major harm, not least to the mental welfare of our population. It is notable that four times as many people have died from bowel cancer than Covid during the lockdown, and at the point of writing six times the number of people are dying from flu and pneumonia but do you recall there being any significant media attention about that?
However, the UK Life Sciences sector has responded magnificently, with new diagnostics, equipment, treatments, and vaccines on the horizon. In particular, the team at the Oxford Jenner Institute deserves a particular mention, being at the very forefront of global vaccine development. Their “phase one” study involving around 1,000 volunteers (including one of our OBN staff) generated a clear immune response leading to the production of neutralising antibodies as well as a surge in specific T-cells targeted against the virus.
With the team at Imperial College also progressing their own technology, as well as other international approaches, there has to be a realistic expectation that a viable vaccine capable of preventing, or at least mitigating, the disease is a likely prospect for late 2020 / early 2021.
A NEW BUSINESS WORLD?
I’m now tempted to ‘follow the science’, meaning I’ll get my own crystal ball out! In particular, what will the new world look like in terms of people, supply chains, and Merger / Acquisition activity?
Working from home is now often cited as being the ‘new normal’ and whole companies are opting not to return to the office. Certainly, the economic uncertainty of the pandemic has or will cause many workers to lose their jobs and exposed others for the first time to non-standard work models.
Companies are also learning the downsides of reliance on human capital and the impacts of social distancing, so we can expect an enhanced use of artificial intelligence and machine learning to constantly reassess and re-plan activities and automation to replace labour-intensive activities. The use of more automation and technology was always coming, COVID-19 will just hasten the pace.
And as AI systems continue to develop and improve we can also envisage automated systems replacing knowledge intensive jobs that previously were perhaps not regarded as being under threat.
From a human perspective, firms will see the value in continuing to simplify and streamline their organisational structures, with critical roles linked to value-creation and leadership roles that are much more fluid, with new leaders emerging from unexpected places – a premium will be placed on character, flexibility and mental resilience rather than on expertise or experience.
One factor that barely attracts a mention is the development of young / new staff. A critical factor in developing competence and expertise is the continuous interaction with more experienced people, seeing how they perform and behave, and learning from that. How are people expected to learn if they are all operating remotely?
A total move to remote working probably isn’t sustainable, but the current remote working experiment is likely to herald the emergence of hybrid working models that are more resilient and but will require matching the right talent, regardless of hierarchy, to the most critical challenges.
SUPPLY CHAIN RESILIENCE
Across industries, global shortages of supplies have been a real threat to their operations and the disruption has exposed the existing fragility in global supply chains and service networks.
Given this, successful companies will redesign their operations and supply chains to protect against a wider and more acute range of potential shocks by rebalancing their global supplier mix. The once-prevalent global-sourcing model based on cost & efficiency will steadily decline as new technologies and changing consumer patterns encourage regionalisation of supply chains and dual or even triple sourcing to mitigate risk, combined with carrying greater levels of inventory.
Ultimately, adaptability is essential. That will mean changing the ecosystem and considering non-traditional collaborations with partners up and down the supply chain. The key message is that firms will prioritise resilience over efficiency going forwards and build in the ability to respond quickly in the face of threat.
M&A / DIVERSIFICATION
Companies frequently go through a cycle of diversification only to later reverse the process and focus on core business and competencies.
After every financial crisis, global M&A activity accelerates and as the pandemic subsides, we can expect to see the same trends play out.
Companies will focus on expanding their geographic diversification and investment in secondary markets to mitigate and manage risk in times of disruption, and much of this will be achieved by acquisition.
Those firms that are well managed and well capitalised will inevitably take advantage and absorb weaker rivals to grow their market share and achieve economies of scale.
Overall, what is the key message?
Charles Darwin gave us the pointer – ‘It is not the strongest of the species that survives, nor the most intelligent, but the one that is most adaptable to change’.
Doubtless, more lessons will emerge over the coming months, but one thing is clear: the ability to adapt to the unexpected or improbable will itself become a critical business capability.