Cell And Gene Therapy Growth Creates A New Opportunity For UK Life Sciences

When the real estate world talks about life sciences, it often does so as if all companies operating in the sector are the same. Yet one area of scientific research and discovery is set to drive an upturn in real estate demand over the next few years. 

“I would say that cell and gene therapy is leading the way in the UK, as well as worldwide,” Bulb Interiors Director of Science and Technology Manisha Kulkarni told the audience of more than 550 people at Bisnow’s UK Life Sciences and Innovation Real Estate Annual Conference, held at British Land’s 1 Triton Square life sciences refurbishment scheme.

“These emerging technologies or therapies are the more interesting ones where the startup ecosystem in the UK, the biotech companies, are focusing, so I see lots of advanced therapies happening in there,” she said.

Traditional chemical drug research and development will evolve and drive space demand, said Kulkarni, a former synthetic organic chemistry researcher.

But emerging cell and gene therapy research will be a big area of expansion for the UK life sciences industry, she said. And that expansion is set to help to develop an underexplored part of the life sciences real estate firmament in the UK: manufacturing facilities. 

Cell and gene therapy has been an area of research since the 1960s, but the strides made in the past five years have been huge, panellists said. Gene therapy involves the transfer of genetic material and the uptake of the gene into targeted cells in the body, whereas cell therapy involves the transfer of cells with relevant usage into a patient. 

As the science evolves, the hope is that the genetic information of individuals can be used to create therapies tailored to a single person, rendering them more effective. 

Data from the UK BioIndustry Association shows that the number of jobs in cell and gene therapy research and manufacture in the UK doubled between 2019 and 2023. The Cell and Gene Therapy Catapult, a government-backed research organisation, reported that the number of jobs in the sector would need to double between 2021 and 2026 to keep up with the investment targeting the sector.

That growth in research and manufacturing is already translating into demand for real estate. As of December, 45% of all lab requirements in Cambridge were related to the cell and gene therapy sector. The equivalent figure was 30% for Oxford, according to Bidwells data. 

“The rest of the market is a real mix, but you can see the importance of cell and gene therapy, in particular in the UK,” Bidwells Research Director Sue Foxley said. 

Demand for lab and research space is having a positive knock-on effect for the UK economy and UK real estate, creating demand for advanced facilities to manufacture drugs once they have been discovered, tested and approved.

If the UK can provide the space for companies in the sector, it can create a virtuous circle of demand.

“Cell and gene therapy demand means that the manufacturing has to be done, ideally close to [where companies reside] and within the region,” West Midlands Growth Company Life Sciences Lead Anil Vaidya said, adding that if “manufacturing requirements are not taken more seriously, then those companies will start doing their work outside of the UK.” 

The threat of losing that demand to areas outside of the UK is a very real one, which would have a detrimental effect on the UK life sciences ecosystem and the broader economy, according to one company operating in this sector. 

“We work primarily with cell and gene therapy developers,” eXmoor Pharma Commercial Manager Remy Martin said. “We advise them. We support them with process engineering and concept design for manufacturing facilities.”

Martin said his firm over the past five or six years has seen companies increasingly go outside of the UK to access fast, cheap contract manufacturing, outsourcing the fabrication of drugs once they have been developed. 

That secular trend of drug companies outsourcing manufacturing is a positive for the real estate sector. Contract manufacturers are increasingly likely to lease facilities instead of building their own. But if it can be undertaken more cheaply outside of the UK because other countries have more fit-for-purpose space, that is not helpful to the domestic sector. 

“The flip side of that is often those clinical trials take place outside of the UK. These companies often set up their headquarters or operational centres outside of the UK,” Martin said. “And then down the line, the investment tends to come from ex-UK. So it's really critical to try and stop that brain drain early because if we get to keep the manufacturing onshore, we get to see the economic benefits of it.”

One real estate firm making a foray into the manufacturing sector is UBS, which has teamed up with developer Reef to build a £900M life sciences campus in Stevenage, to the north of London, close to the Cell and Gene Therapy Catapult research facility. 

In addition to lab and office space, the campus will include manufacturing space. Planning was secured last year, allowing development to begin, and some of the manufacturing space has already been pre-let to Autolus Therapeutics for a chimeric antigen receptor T-cell manufacturing facility.

“We want to provide everything from startups to scale-ups, all the way through to those larger requirements,” UBS Investment Manager Ellie Junod said. “But importantly, also the R&D and the manufacturing element. A part that people quite often forget is that early stage manufacturing is kind of essential for that R&D, and it's a part that gets missed off.” 

Creating manufacturing facilities is not easy, Junod said. Often the sites on which they could be built have other uses that might return higher values, like pure lab space or traditional industrial or logistics facilities. For that reason, an area like Stevenage, where land values are lower than in Oxford or Cambridge, makes the development of manufacturing space more viable. 

But the synergy of having manufacturing and R&D space on the same campus makes it worth the effort, she said. 

“I think from a developer or investor standpoint, [manufacturing] is complicated,” Junod said. “It's not straightforward. It's expensive to build. And I just don't think there's enough knowledge on it. It's higher up on the risk curve of getting under the skin of demand and who's going to take your facility.

“It's challenging, and you've got to really have gumption and belief in the sector and the fundamentals driving behind it.”