BioWorld International Correspondent

LONDON - London's biotechnology cluster now boasts more than 100 companies, but extreme difficulty in finding laboratory space will make it hard for them to expand and grow in the city, according to the London Biotechnology Network Report 2003, published last week.

The majority of companies have fewer than 10 employees and are spin-outs from medical schools and universities. Some are virtual, others have obtained funding but remain in university accommodation and some have moved out but rely heavily on academic links.

"We are putting an increasing amount of effort into how to address the major hurdle of providing suitable laboratory space," Tony Jones, director of the London Biotechnology Network, told BioWorld International. "We need to think about grow-on space where companies can go when they get bigger than 15 people."

At present, 70 percent of companies have less than 10 people on staff, and Jones said London also is facing a shortage of incubation facilities.

Watching on the sidelines are the UK's two leading biotech clusters, Oxford and Cambridge, which Jones said are trying very hard to attract companies from London. "From a space point of view, Oxford and Cambridge are far in advance of London, but companies here want to stay in London to retain their links with hospitals and universities," he said.

The London Biotechnology Network was set up in June 2000 to coordinate development of London's biotechnology cluster. At that time the city was home to 50 biotechnology companies. One of the network's main achievements was fostering the development of the London Bioscience Innovation Center, which now accommodates 12 companies, with a further phase of building due to open in 2005.

For the London cluster to achieve full maturity, the city needs science parks the size of those in Oxford and Cambridge, but Jones said, "there is nothing immediate on the horizon" in terms of finding suitable sites.

However, he added that property developers in London are becoming more attuned to the needs of biotechnology companies. They recognize the sector is growing and that there is a demand for space.

Not only do the incumbents want to stay put, but also more and more companies from outside London would like to move into the city, if there were suitable facilities. The companies are attracted to London's financial network and its strengths in biomedical research and clinical trials. Spending on biotechnology-related research in London is around £300 million (US$524.1 million) per annum, the largest of any UK region, while 60 percent of clinical trials in Europe are carried out in the UK, with London being the leading center.

"We are very pleased that the number of companies in London is growing, and this despite the poor funding climate," Jones said. "Overall, London is a very attractive place for biotechs, and if you took away the hurdle of finding the right space there would be no barriers to further rapid growth."