Science Behind Real Estate

Transcription

1 Science Behind Real Estate LIFE SCIENCE TRENDS FOR GLOBAL & UK MARKETS 2016 Tomorrow s science parks house the future of innovation

2 Global Life Science Growth Clusters GLOBAL 4.3% ISRAEL Attracting investment through new R&D park and incubators in Tel Aviv. TURKEY Pharma businesses are exempt from income tax until 2023, which is driving R&D and attracting foreign investment. RUSSIA Government restrictions on imported drugs are strengthening domestic life sciences market. NORTH AMERICA 4.8% WESTERN EUROPE 1.4% ASIA 6.6% MEXICO With government support of generics usage, pharma sales are projected to grow by 5.6% LATIN AMERICA 3.1% MIDDLE EAST & AFRICA 9.3% CHINA Biosimilars industry is now one of the biggest in the world due to large population and limited insurance coverage. SINGAPORE Significant re-exporter of pharmaceuticals and expected to grow by 9.3% per year in the next few years. SOUTH KOREA The government looks to invest $5.3 billion in a life sciences hub in Osong Bio Valley growth Source: Deloitte / Colliers International BRAZIL Home to the top medical device and biotech producers in the world. INDIA Pharma industry is projected to grow by 15% CARG* to 2020 due to population growth and rise in chronic illnesses. INDONESIA Medical device market is forecast to grow by 15% year on year. *Compound Annual Rate Growth 2 SCIENCE BEHIND REAL ESTATE COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL SCIENCE BEHIND REAL ESTATE 3

3 Projected Growth Within Each Sector SMART TECHNOLOGY Pharma 4.3% GROWTH BY 2019 $1.4 TRILLION Biologics 27% GROWTH BY 2020 $290 BILLION Advance technology to improve hearing. Smart lenses that register glucose levels. Global medtech sales are forecast to reach $454 billion by 2021, increasing by an average of 4.1% per annum. It is also estimated that medtech companies will spend a total of $29.5 billion on R&D in 2020, an equivalent of 3.5% growth per annum. Biologic agents will continue to outpace overall pharma spending growth and are expected to represent 19-20% of the total market value by Biologics currently represent around 15% of the global pharmaceutical market, including seven of the top 10 products. Led by Humira and Remicade, monoclonal antibodies (mabs) make up 41% of the market, fusion proteins 8% and cellular and regenerative medicines 1%. Patches that are designed for monitoring heart rate. Pills that analyse the body s behaviour and response to medications. Biotech 23-26% GROWTH BY 2020 FROM $300 BILLION IN 2015 TO $454 BILLION IN 2019 Biotech drug sales were just over $300 billion in 2015 and are forecast to reach $454 billion by Biotech s share of global pharma sales is projected to reach 27% in 2020, up from 18% in R&D spending is expected to grow 2% per year through Medtech 4.1% GROWTH FROM $369 BILLION TO $454 BILLION BY 2021 Global medtech sales are forecast to reach $454 billion by 2021, increasing by an average of 4.1% per annum. It is also estimated that medtech companies will spend a total of $29.5 billion on R&D in 2020, an equivalent of 3.5% per annum. Wearables in the form of wristbands that provide feedback on blood pressure, calorie intake and heartbeat. Smart insole inserts that can provide information on temperature, balance and weight bearing measurements. Source: EvaluatePharma / IBISWorld / Deloitte / Colliers International 4 SCIENCE BEHIND REAL ESTATE COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL SCIENCE BEHIND REAL ESTATE 5

4 Projected Growth Within Each Sector Biosimilars GROWTH FROM $25 BILLION TO $35 BILLION BY 2020 Biosimilars create opportunities for manufacturers globally due to the loss of patent protection for over 10 established biologics before Growth is driven by the continuous focus on healthcare cost reduction. Generics GROWTH FROM $261 BILLION IN 2012 (27% MARKET SHARE) TO $421 BILLION (36%) BY 2017 Generic pharma companies in the emerging markets are growing at a faster rate than those in the established markets. Sales of prescription and OTC drugs are projected to rise from an estimated $36 billion in 2010 to $38.3 billion by PRODUCT DEVELOPMENT TIMELINE GLOBAL GENERIC SEGMENT REVENUE Revenue Growth Rate MARKETING AUTHORISATION APPLICATION % % 11.4% 1 BASIC RESEARCH 2 PRECLINICAL R&D 3 CLINICAL PHASE 1 4 CLINICAL PHASE 2 5 PRE- REGISTRATION 6 LAUNCH USD BILLIONS % 11% 10.8% % GROWTH % ENTRY TO HUMANS % 10.2% % Source: Colliers International Source: Deloitte 2015 Global Life Sciences Outlook 6 SCIENCE BEHIND REAL ESTATE COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL SCIENCE BEHIND REAL ESTATE 7

5 Global Industry Trends MORE THAN 700 BIOSIMILARS APPROVED OR IN THE PIPELINE GLOBALLY Strategic Growth Increased Consolidation: The record deals for M&A and collaborations, with Big Pharma implementing a new strategy to generate alternative sources of revenue. An example of this is the attempted merger of two powerhouses Allergan and Pfizergan for $150 million. Given the mounting pressures to reduce costs, the major pharma companies continue to explore new business models through altering portfolios, more targeted deal-making and increased consolidation. REAL ESTATE: Occupiers are downsizing into smaller more strategic locations and combining with industry partners, leaving an inventory of vacant labs / office space. Innovation Clusters: There is an increase in demand for plug-n-play innovation hubs which are strategically located around areas of research and designed for university spin-offs and small SMEs. A new trend for Big Pharma is sponsoring the hubs. An example of this is Johnson & Johnson JLABS that provide open innovation with the support of Big Pharma. REAL ESTATE: When creating a hub it is important to look at research within the surrounding areas that indicate whether growth in that ecosystem is sustainable. Innovative clusters that have game-changing research will appeal to both local and global markets. Future-proofing these clusters by planning for affordable grow-on space for university spin-offs / smaller SMEs will strengthen its appeal. GENERICS ACCOUNT FOR OVER 85% OF THE UK PHARMA MARKET Navigating Through The Regulatory Environment: Drug and device product safety with increased scrutiny from government, patient advocacy groups and social media exposure. Intellectual Property Protection is a global concern, especially within emerging markets. The importance of government support is crucial. Security and privacy becomes a driver within this growing industry with the need for greater protection to combat the increase of cyber-attacks as the Medtech and Tech worlds merge. REAL ESTATE: Providing digitalised security with high speed networking capabilities within the building scheme is now a necessity that is expected by tenants. Increased Utilisation Of Generics & Biosimilars: Government mandates / Patent Cliff / emerging markets for future growth. Generics account for approximately 70% of the pharma market in the US and over 85% in the UK. The growth of generics share has accelerated in other parts of the world too. Mexico, for example, saw a 30% increase in the recent years mainly due to the falling drug prices, while Japan s government is looking to increase the share of generics to 80% by In terms of biosimilars, since the European Union approved the first biologic in 2006, there are more than 700 biosimilars approved or in the pipeline, globally. REAL ESTATE: Key requirements in this sector are manufacturing sites that provide access to a talent pool combined with government incentives and cost effective production. Source: EIU / IBISWorld / UK Office For Life Sciences / Colliers International 8 SCIENCE BEHIND REAL ESTATE COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL SCIENCE BEHIND REAL ESTATE 9

6 Life Science Investment In R&D REAL ESTATE LIFE SCIENCE GROWTH GLOBAL REAL ESTATE LIFE SCIENCE GROWTH WESTERN EUROPE 5, ,500 4, , MILLIONS 3,000 2,500 2,000 MILLIONS , , YEARS YEARS USA Rolling 12 month total Global excl. USA Rolling 12 month total UK Rolling 12 month total Western Europe excl. UK Rolling 12 month total Annualised ( ) Global 13% USA 12% Global without USA 15% R&D: Research and Development. Office buildings with this specific use may include properties occupied by firms in the medical, laboratory and scientific research space. Ultra-secure clean rooms are typical in R&D buildings. Annualised ( ) UK 41% Western Europe 11% Western Europe without UK 6% Source: Real Capital Analytics Data based on properties & portfolios ~$7.5mil or greater Source: Real Capital Analytics Data based on properties & portfolios ~$7.5mil or greater 10 SCIENCE BEHIND REAL ESTATE COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL SCIENCE BEHIND REAL ESTATE 11

7 Life Sciences Going Forward 00% DIGITAL HEALTH This is set to play a vital role in global healthcare. Wearable devices, mobile health apps (mhealth), social media, big data analytics, cloud-based applications and others are rapidly evolving, promoting technology integration and boosting operational efficiencies. MERGERS AND ACQUISITIONS (M&A) More life sciences companies are expanding domestically and overseas as a strategic growth path. CHANGING DEMOGRAPHICS The combination of population ageing and increased life expectancy will bring the number of people aged 65+ to over 604 million by 2019, or 10.8% of the total global population. That proportion is anticipated to be even higher in Western Europe (nearly 21%) and Japan (28%). The average age in the UK by 2039 will be 42.9 years old. One in twelve people are expected to be aged 80+. The size of the global digital health market is expected to increase to $233.3 billion in By 2018, 50% of the 3.4 billion mobile device users will have downloaded Health apps. PERSONALISED CARE Care tailored to an individual s genetics and health information have the potential to generate new therapies that may radically improve outcomes. MORE COLLABORATION Collaboration is required to facilitate faster R&D processes and innovating new therapies. Already the industry has seen many successful engagements complementing each other in terms of resources and expertise. CROWD FUNDING This is likely to play a larger role in the future currently relatively untapped. HEALTHCARE COSTS Costs are expected to grow across the globe. GROWING IMPORTANCE OF EMERGING MARKETS Succeeding in an emerging market opens up new opportunities for growth and innovation, but is far more challenging than it is perceived. 24.4% 52% 1965 Proportion of UK population aged 85+ will increase significantly over the next 50 years 11.7% 11.3% 15.5% 2.4% % 11.4% 18.8% 17.3% 45.6% 7.4% % 10.6% Over 85 Sources: Deloitte Center for Health Solutions / ONS / Colliers International Source: ONS / Colliers International 12 SCIENCE BEHIND REAL ESTATE COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL SCIENCE BEHIND REAL ESTATE 13

8 Invest In The UK The UK is an attractive location to initiate pivotal clinical studies and is a gateway to enter other European markets. UK TRADE & INVESTMENT (UKTI) INNOVATION HOTSPOTS IN THE UK ANIMAL HEALTH & VETERINARY CHEMISTRY 1 IN 5 WORKERS ARE IN THE SCIENCE INDUSTRY A TALENT BASE OF 5.8 MILLION PEOPLE WITH GROWTH TO 7.1 MILLION PEOPLE IN THE NEXT 15 YEARS TROPICAL MEDICINE CLINICAL RESEARCH BIOLOGIES / BIOTECH / AGRITECH MEDTECH The UK currently accounts for around 4% of world pharma consumption and is expected to be among Europe s best-performing large pharma markets in the coming years. Source: ONS / Colliers International 14 SCIENCE BEHIND REAL ESTATE COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL SCIENCE BEHIND REAL ESTATE 15

9 Invest In The UK The NHS is one of our greatest assets and its standardised system of data collection has the potential to help transform healthcare and support new discoveries and clinical research. UKTI The UK Government has protected the UK s science budget and is committed to supporting core science funding. The UK is also making major investment in genomics, informatics and synthetic biology. UKTI BIRTH PLACE OF INNOVATION WITH 77 NOBEL PRIZES FOR CONTRIBUTIONS TO BIOMEDICAL SCIENCE. Sources: Deloitte Center for Health Solutions / ONS / Colliers International There are 60 million people who use the National Health Service (NHS) in the UK. Increasingly, the UK s pharma companies work with the NHS to ensure local health priorities are met, improve patient outcomes, and help local NHS organisations to meet their objectives. Genomics England, a company wholly owned and funded by the UK Government, was established to deliver a flagship project, which will sequence 100,000 whole genomes from NHS patients, by Creating test beds that partner research with the NHS provides a faster path for innovation to market. The UK Government has invested financially in the life science industry: The UK Government has committed 6.9 billion investment in science infrastructure up to The UK spends more than 500 million annually on the National Institute for Health Research (NIHR) infrastructure to support experimental medicine research and clinical trials in the NHS. The UK is expanding the number of NIHR Biomedical Research Centres and Units, with an additional 800 million of investment over five years from The Strategy for UK Life Sciences provides a 180 million Biomedical Catalyst Fund and pledged to spend 130 million on personalised medicine research and 50 million on a Cell Therapy Technology and Innovation Centre. The Tax incentives will encourage innovative R&D into pharmaceuticals, biotechnology and other life sciences. The single biggest UK Government support for business investment in R&D are tax credits. The Patent Box offers eligible firms a 10% tax break on corporate profit from patented products. In 2012 the Wellcome Trust charity announced the creation of a new 200 million biotechnology start-up fund. The EU has pledged to invest 100 million in start-ups. UK Trade & Investment (UKTI) provide further information on a range of areas impacting the life science sector including; market opportunities, local skills and expertise, industry clusters, universities, incentives and funding support. 16 SCIENCE BEHIND REAL ESTATE COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL SCIENCE BEHIND REAL ESTATE 17

10 UK Real Estate Outlook The Next Wave Of Innovation It s about the research not the price. The number and diversity of life sciences customer segments suggest that one-size fits-all approach to understanding and addressing their needs will be ineffective in an era of transformation. The increasing volume of funding flowing into the market does not necessarily translate into the success of a science park. Attracting the right mix of occupiers and specialisation in a cluster formation remains the key element in the industry. Promoting the North East as a centre of biomass, processing renewable fuels, energy, heat and chemicals / materials through innovation within the Chem Clusters. The North East has a rich history in chemical innovation, with recent investment from both government and the private sector into the region for the regeneration of this industry. Watch for the development of clean chemistry technology that will revolutionise and reaffirm that this region as a chemical powerhouse. CURRENT HOTBEDS FOR INNOVATION The Northern Powerhouse has been campaigning to be a big player in the life science sectors and it is finally paying off. With a strategic focus on Medtech innovation and partnership with the NHS, the North has grabbed global attention with this sector. THE GOLDEN TRIANGLE ENGLAND S GREATER SOUTH EAST, AND SPECIFICALLY LONDON, OXFORD, CAMBRIDGE, IS THE WORLD-LEADING LIFE SCIENCES CLUSTER. This region is a hotbed of innovation and home to four of the world s top 10 universities, five out of seven of the UK s academic health science centres, leading medical research institutes including the Wellcome Trust, the Medical Research Council, Cancer Research UK and the National Cell Therapy Catapult. The Greater South East is home to 1,896 life sciences companies generating 32 billion annually and employing 62,855 people UK-wide. OXFORD LONDON CAMBRIDGE With one of the most diverse populations in the UK, the Midlands is ideal for clinical research for any life science sector. Cancer Research UK (CRUK) utilises this area as a resource for some of its most advanced clinical trials. The key to success will be finding a way to promote this region as a European research centre to the local and global markets. The Welsh life science sector employs 15,000 people, contributing around 1.3 billion to the local economy and attracting 100 million in government funding for the life science sector. GE Healthcare has invested in Wales by setting up an innovation hub in Cardiff and utilising the readily available talent pool. Cardiff also has a mental health division that rivals the likes of Cambridge and, if strategically marketed, could be the next hotspot for Neuroscience. Source: Colliers International / ONS 18 SCIENCE BEHIND REAL ESTATE COLLIERS INTERNATIONAL COLLIERS INTERNATIONAL SCIENCE BEHIND REAL ESTATE 19

11 Kaleigh Haeg Life Science Specialist D: M: Bo Glowacz Research Analyst D: