London Mayor Boris Johnson has announced plans to establish a £10bn 'megafund' to support UK pharmaceutical companies developing new drugs and treatments.
The proposal will be discussed at a special conference hosted by the mayor's office in conjunction with MedCity, and aims to maximise the full economic and health benefit of the capital city's world-leading research and development base.
Companies such as Lilly, Pfizer, Imperial Innovations, Silicon Valley Bank, European Investment Bank and JP Morgan will explore options for innovative new funding models that support long-term drug development and company growth.
Johnson said: "London is one of the most powerful scientific discovery engines in the world, home to an incredible cornucopia of research, medical and financial pre-eminence."
The £10bn fund may comprise a mix of debt and equity finance that would enable simultaneous investment in multiple drugs at different stages of development.
In return, fund investors could have a small percentage of the royalties from successful products or licensing revenues.
In addition, another option that will be explored is to make use of a programme jointly undertaken by the European Commission and the European Investment Bank to make more than €24bn available over the next seven years.
The new InnovFin is expected to provide more than £17bn of new financing for research and innovation across Europe in the next five years.
Furthermore, other options include offering tax incentives for investors who hold onto shares for more than ten years, or encouraging them to behave more like owners and grow larger companies.
Investors can also be offered capital gains incentives where lower capital gains tax is paid the longer it takes to get a return.
MedCity executive chair Eliot Forster said: "If you compare the UK to other leading life sciences hubs, we are extremely competitive, we have huge innovation, creativity and entrepreneurial drive, and we are increasingly agile in translating exciting research into spin-out companies.
"If we want to develop another GSK or AstraZeneca, if we want to get a full return on the investment we put into our research base, and if we want better therapies more quickly, this is an issue we have to address."
