For biotechnology chief executive Athol Haas, the different attitudes to healthcare he encounters as he travels round the world is proving to be something of a revelation. His stem cell banking company is attracting significant interest from patients in some surprising locations
For biotechnology chief executive Athol Haas, the different attitudes to healthcare he encounters as he travels round the world is proving to be something of a revelation.
His stem cell banking company is attracting significant interest from patients in some surprising locations. "In the UK people are used to not paying for medical services but in somewhere like Abu Dhabi or Dubai it is a completely different mindset," says Haas, of Newhouse-based Pharmacells, which has exclusive rights to a novel adult stem cell technique.
Through its subsidiary, Oristem, the company offers stem cell collection and banking to individuals. With the service costing several thousand pounds, price is a major consideration for UK customers. But Haas says in markets such as the Middle East or China it is a different matter. "They are used to choosing what they want in terms of healthcare and paying for it but the affordability is also quite different. For many people the cost involved for our services is just not regarded as lot of money."
The global trends for healthcare spending in general continue to look very positive. An ageing population, burgeoning middle class in many developing economies, new treatments and greater public expectations of healthcare mean spending is set to continue to rise.
The total market for healthcare products and services is predicted to grow at some seven to 12 per cent annually and their position in the global industry means UK and Scottish life sciences companies are well placed to benefit from that.
In Scotland the industry employs more than 31,000 people, generates turnover of well over £3bn and the nation is home to the second largest life sciences cluster in the UK.
The scale of the global opportunity means when industry veteran Jim Reid founded his latest biotech venture Sistemic, his sights were on international markets from day one. Reid, a biochemist and pharmacologist, opened a sales o¦ce in Boston within Glasgow-based Sistemic's first year in business. "You really have to look to operate globally as early as possible in life sciences," explains Reid, chairman and chief executive of the company which analyses cells on behalf of drug developers and tells them what effect their new medicines are having. The company has also branched out into the growing stem cells market, working with companies developing treatments for conditions such as diabetes, multiple sclerosis and Parkinson's disease.
"Scotland and the UK is a relatively small indigenous market and to exploit your international assets you have to look outside that."
But Reid, a Global Scot and the recipient of the 2010 Outstanding Contribution to Scottish Life Sciences award, stresses it is important internationalisation is done in a controlled way following research to identify the best locations for a particular business. "We decided to open in the US first as that is where the majority of the market in our sector of the industry is. But it is not just a matter of setting up a base - you have to be prepared to put the time into it in terms of regularly going out there. It is time consuming, it is expensive and it is hard work but that is the nature of the business."
Sistemic now has clients all over the US, with rapid growth also being seen in Japan, Australia and Korea as well as mainland Europe.
While much of Scotland's life sciences sector is based around the central belt, companies such as Isle of Lewis-based Equateq are also successfully winning business worldwide. The pharmaceutical production company last year secured its biggest-ever order from US firm Amarin Corporation, which it will supply with an ingredient for a treatment under development to combat cardiovascular disease.
Sandy Dobbie, chairman of Chemical Sciences Scotland, describes the achievement as "remarkable". "One of the ways in which Scotland can compete and flourish on the world stage is through international trade, but winning large contracts is not easy when you're competing with similar companies all over the world," says Dobbie. "That's what makes Equateq's achievement all the more remarkable, and by expanding their facilities and workforce the company will create new skilled jobs in Scotland."
Glasgow-based Biopta is also enjoying considerable success in the US after establishing a base there last year. According to Dr David Bunton, co-founder and chief executive, the move involved a degree of good fortune as well as business planning. The Glasgow-based contract research company conducts non-clinical trials on new drugs using donated human tissue collected from general and transplant surgery.
With most of its business originating in the US, and greater potential for the supply of tissue there than in the UK, the company had been keen to establish a laboratory base 'across the pond' for some time. "We had been talking to a company in a related field and it transpired there was an opportunity to sub-let space in their premises in Maryland which looked ideal for us," says Bunton. "It was a pretty inexpensive way for us to establish a presence there and it all happened quite quickly but within six weeks of opening we were already generating turnover. The site is now making a real contribution to sales and profits."
The location of the base is within easy travelling distance of the headquarters of many of the main US pharmaceutical companies clustered around New Jersey and Philadelphia. Staffing is currently mostly provided by employees from Scotland travelling there on secondments but some may make a more permanent move in the near future.
"We are now also looking to recruit locally," says Bunton. "And I've just spent time going round the universities there to speak with potential employees as well as to discuss collaboration opportunities."
Reid, who led drug development company Haptogen before its sale to global giant Wyeth, says while internationalising a business is not for the faint-hearted, Scottish companies looking at global markets for the first time would be starting from a strong platform. "In my experience the world views Scottish life sciences very positively indeed. But I think as well as the actual science they like our reputation for an efficient but friendly approach to doing business, which is an important factor."
FACTFILE: Life sciences
Two major events in the months ahead will see a number of Scottish firms look to promote themselves and gain a foothold in the world's two largest healthcare markets. ChinaBio 2012 in May is China's main life science partnering event and attracts biotech and pharmaceutical leaders from Europe, US and Asia, along with hundreds of China-based developers of novel technologies. Scottish Development International will have a stand at the event. In the US, BIO 2012 is taking place in Boston in June with a delegation of Scottish life science and biotech companies attending. Although US-based, BIO 2012 is a global event attracting visitors from almost 60 countries.