The North East’s key role in the healthcare revolution

How the region is writing a new script for patient care

Welcome to the latest instalment of VISION 2031, the campaign launched by North East Times Magazine that lays out a blueprint for how our region can stand at the vanguard of global industrial and economic progress across the next ten years.

Here, in the second high-level roundtable event of the series, individuals from a number of leading organisations, as well as those from partner Northstar Ventures and sponsors Northern Accelerator, EY, Jackson Hogg, Lloyds Banking Group and Weightmans, discuss the North East’s healthcare sector, analysing its strengths and highlighting the measures needed to further bolster its presence at the forefront of medical advancement.

Words by Steven Hugill

Photography by Angela Carrington

THE ROUNDTABLE DISCUSSION FEATURED:

·      Alex Buchan

Investment director, Northstar Ventures

·      Professor Sir John Burn

Chair, Newcastle Hospitals NHS Foundation Trust

·      Professor Lynne Corner
Co-founder and director, VOICE

Chief operating officer, National Innovation Centre for Ageing

·      Dr Marie Labus

Chief executive, AMLo Biosciences

·      Professor Mike Trenell

Founder and chief executive, Changing Health

·      Gary Chapman

Head of North East region and director – industrials and infrastructure, Lloyds Banking Group

·      Mark Smith

Tax director, EY Private

·      Liz Rothery

Senior manager, EY Private

·      Dr Georgios Gerardos

Managing director and chief technical officer, Great North Research & Innovation

·      Paul Wigham

Partner, Weightmans

·      Steven Bagshaw

Head of business strategy, CPI

·      Dr Sam Whitehouse

Chief executive, LightOx

·      Richard Hogg

Chief executive, Jackson Hogg

·      Billy Webber

Chief executive, XR Therapeutics

·      Rick McCordall

Head of company creation, Newcastle University

·      John Duns (chair)

Director, North East Times Magazine

Given the political maelstrom, it was perhaps fitting last year ended with no little indecision.

A heavily-teased Westminster white paper, focused on tackling national healthcare inequalities, remained unpublished as the calendars crossed over.

In some respects, the situation wasn’t too surprising, given the Conservative Party was still tending to the bumps and bashes of a bruising 2022.

The situation, though, is stark.

According to Office for National Statistics (ONS) data (1), life expectancy levels in the North East are the worst across the UK, barring Scotland, for both men and women.

Even more striking are findings from the Health Foundation (2), which show women in the poorest ten per cent of areas in England – which, say ONS numbers, includes Middlesbrough and Hartlepool – will live to 78.7.

Such a lifespan is nearly five years lower than the English average and, further worryingly, inferior to any other Organisation for Economic Co-operation and Development country, barring Mexico.

The North East’s healthcare industry, however, stands as an outlier to the figures.

Led by a number of public and private sector advances – including a great many academic start-ups – the region is a hotbed for innovation, an intersection of top-class research and new treatments.

The North East has always been a flagbearer for progress, from its days as the cradle of the railway, a coal capital and a shipbuilding spearhead.

And with a healthcare ecosystem making ever more significant breakthroughs, it is doing so again.

But its development is not without challenges, which, discussed VISION 2031 roundtable members, must be surmounted to lay the foundations for even greater success.

JUST HOW STRONG IS THE NORTH EAST’S HEALTHCARE SECTOR?

If there was ever a barometer for gauging the potency of a region’s healthcare sector, a pandemic makes for as good a yardstick as any.

And with moves such as Newcastle Hospitals NHS Foundation Trust’s oversight of a COVID-19 Lighthouse laboratory, in Gateshead, and others, such as Billingham-based FUJIFILM Diosynth Biotechnologies’ work on a COVID-19 vaccine, the North East proved beyond doubt its reputation as a medical benchmark.

Addressing fellow roundtable members, Professor Sir John Burn, chair at Newcastle Hospitals NHS Foundation Trust, said the Lighthouse venture – which processed millions of tests for patients across the North East, Cumbria, Yorkshire and the Humber – was a substantial marker of the region’s healthcare prowess.

He said: “We did eight million tests, created around 750 jobs and peaked at issuing 50,000 COVID-19 test results per day.

“We showed we could do things quickly – and there aren’t many who could have done it better.”

Alex Buchan, investment director at Newcastle-based finance house Northstar Ventures, agreed, describing the region’s healthcare environment as a “nascent sector” at the crux of ground-breaking advances across areas including artificial intelligence, messenger RNA vaccines and personalised treatments.

He said: “We have fantastic assets, from our world-class hospitals to the National Innovation Centre for Ageing, the National Innovation Centre for Data, excellent universities and larger organisations, such as Procter & Gamble.

“There is so much we can do here.”

FOR ALL ITS PANDEMIC RESPONSE AND BROADER STRENGTH AND POTENTIAL, HOWEVER, THERE NEVERTHELESS REMAIN WIDER CHALLENGES FOR THE REGION’S HEALTHCARE INDUSTRY. WHAT DO YOU SEE AS THE LARGEST BARRIERS TO FURTHER PROGRESS?

Newcastle’s £350 million Helix science park provides a lovely symmetry.

To stand at the doors of the development’s flagship Catalyst building – where eye-catching golden steelwork criss-crosses a heavily windowed exterior – is to simultaneously step into two worlds.

Once a mine that helped power economic and social development, the modern city centre hub is today cutting an entirely new seam of innovation.

With The Catalyst flanked by buildings including The Biosphere, which houses a welter of biotech businesses – many spawned as local university spin-outs – the sprawling site represents a poster scheme for healthcare advancement.

Surroundings, however, make up just one piece of the jigsaw.

A key element in any firm moving from research to real-life application is investment.

But, warned the roundtable panel, the region is presently experiencing more of a trickle than a torrent.

Dr Sam Whitehouse, chief executive at Newcastle-based LightOx, which previously secured support from organisations including Northstar Ventures and London’s NG Bio to develop a light-based topical treatment for early-stage mouth cancers, said the situation is holding back further progression.

He said: “We have some of the best hospitals to help run clinical trials, but there is a funding gap between them and the commercial world.”

Professor Mike Trenell, founder and chief executive of Helix-based Changing Health, known for digital platforms that support diabetes, cancer and heart disease sufferers, echoed the warning.

He said: “The North East is one of the best places in the world to work in metabolic medicine; what we achieve in this region stands on a global scale.

“But some companies in the sector are raising north of £50 million, and we can’t do that in the North East.”

Dr Georgios Gerardos, managing director and chief technical officer at Great North Research & Innovation, highlighted the journey of the Newcastle University spin-out, which is focused on improving sepsis treatment, revealing some of the difficulties that come with securing early-stage funding.

He said: “We needed something like £750,000, and that was not an easy feat in the North East.

“We managed to get funds in place, and the very good relationship we have with our angel investors has led to a longer relationship.

“But fundraising is very challenging.

“Some say it’s too early, some don’t want to risk an amount for fear of repercussions, and there just aren’t as many funds in the North East as there are in other regions and countries.

“We took exactly the same materials, plans and presentations to the US, and were offered a much higher valuation by a private equity fund that wanted a higher stake.

“We weren’t happy to do that, but it nevertheless showed the huge discrepancy between the North East and elsewhere.”

Alex agreed with Dr Gerardos, saying funding is critical to maintaining sector momentum.

He said: “There is a massive need for early-stage capital in this region.

“The sector has expanded dramatically, but it is still very vulnerable to a lack of people, funding and space.”

Sir John added: “We are certainly global players in terms of research and development, but we aren’t global players in turning that into commercial success.

“We’re a very long way from the people with chequebooks in the South East, and we need to challenge a psychology that the North East is somehow a branch economy.”

WHY IS FUNDING SUCH A CHALLENGE?

Professor Lynne Corner, director of VOICE – the international body using public insight and experience to shape wellbeing advances for older members of society – pointed to ambition.

She said: “Investors are attracted to passion, vision and a can-do attitude.

“The North East must start saying, ‘we are the place to come’.”

Prof Corner, who is also chief operating officer at the Helix-based National Innovation Centre for Ageing, added: “It’s about putting ourselves out there with purpose.”

Paul Wigham, partner at Newcastle-based law firm Weightmans, said the situation was being accentuated by a “knowledge gap”, as well as legislative obligations that weigh heavy on bosses’ shoulders.

He said: “I think there is a fundamental lack of understanding of healthcare businesses within the investment community.

“Furthermore, we are in a marketplace where the regulatory burden on funding is increasing.

“A lot of companies may now need Government consent to raise investment because of the National Security Investment Act.

“But that’s not really the sort of thing a business, which has been spun out of university, wants to spend legal fees on.”

Gary Chapman, head of North East region and director – industrials and infrastructure at Lloyds Banking Group, pointed to what growing operators are faced with when seeking support.

He said: “The large commercial banks are set up to fund against established assets and cashflows, so you’re looking for that equity-type investment.

“Lloyds is the only bank with a proper equity offering in the North East, which is really important in terms of helping a company with a facility or product.

“As a region, we need more of that.”

Mark Smith, a tax director at Newcastle-based EY Private, added: “One of the ways to get funding into businesses is to make research and development claims.

“But a lot of businesses don’t do it, or look at it as blue-sky thinking. It is much broader than that, though.”

Dr Whitehouse called for a Government re-think to reconcile a marketplace bias.

He said: “The big drug companies are not developing new treatments, they are buying companies that do that.

“The Government thinks they’re the ones with the innovation, but the ones who really need the investment are SMEs, to develop, grow and work with those bigger firms.”

IS THE NORTH EAST DOING ENOUGH TO PROMOTE ITS HEALTHCARE ADVANCES? DOES IT NEED TO MORE GREATLY TALK UP ITS EXPERTISE?

Innovation and introversion have long been comfortable bedfellows in the North East.

The scene, though, is changing, as ever-increasing numbers of company marketing teams roll out content campaigns and social media posts which go far beyond the region’s traditional ‘keep your head down and carry on’ ethos.

And roundtable members agreed the North East’s healthcare sector would greatly benefit from such continued amplification.

Dr Marie Labus, chief executive at Newcastle-based AMLo Biosciences, which is working to translate cancer biomarker research into diagnostic products, said: “We don’t promote our science and innovation enough in the North East, to the point that when we do go out to try and raise funds, people are very much, ‘who, where, why?’”

Steven Bagshaw, head of business strategy at Darlington, Sedgefield and Wilton-based CPI, which helps firms commercialise ideas, agreed, saying the industry was guilty of failing to speak to the layperson.

He said: “Communication around the brilliant work we do could be improved.

“We’re good at the innovation, but we’re not so good at taking something extremely complex and explaining it in a simple manner.”

Steven said the region must also identify a USP to mark it against competitors, such as those from the much-vaunted bioscience ‘golden triangle’ of Cambridge, London and Oxford.

He added: “We need to provide a clear identity – what do we want to be known for in the next ten years?

“Rather than the general ‘levelling-up’ story, there must be something that goes back to our heritage, culture and beliefs, which enables us to be different and ultimately move forward.”

Alex agreed a more forceful voice would help catch the City’s attention.

He said: “We have to be much louder.

“It is never easy to attract capital, but until you bang the drum, investors aren’t going to know about you.”

Dr Whitehouse added: “We have the talent, and we can attract the best people, but we’re not singing about it.

“Maybe we’re a best kept secret – but I don’t want to be a secret.”

Gary suggested using wider success stories, such as the Government’s decamping of more than 1000 senior civil servants – including the now Second Permanent Secretary to the Treasury – from London to Darlington, to help promote the North East and, by association, its healthcare sector.

He said: “We have fantastic stories across numerous sectors, which we really need to be putting to the City.

“Could the Darlington economic campus be a gateway to creating more momentum?”

 

SKILLED WORKERS ARE CRITICAL TO SUCCESS, BUT DOES THE NORTH EAST HAVE A SUFFICIENTLY STRONG, AND PRACTISED, HEALTHCARE EMPLOYEE BASE?

Great things in business are never done by one person, they’re done by a team of people, so said Apple co-founder Steve Jobs.

And to that end, the North East’s healthcare sector is a fine example.

Fuelled by the ever-growing ecosystem created by its universities, and helped in no small part by the presence of the National Innovation Centre for Ageing and National Innovation Centre for Data – which, among other sites, act as a nearshoring magnet for City firms to base teams in the region – the North East is a hotbed for talent.

However, panellists agreed there remains work to do to ensure the region’s healthcare sector continues to cultivate an attractive environment for staff, which in turn will add further thrust to its momentum.

Furthermore, members said the industry must take an inclusive approach to recruitment, which melds homegrown employees with those from different geographies and the entire skills spectrum.

Referencing former England and Manchester United footballer Michael Carrick, who rolled off the same Wallsend Boys Club production line as Alan Shearer – but was never signed professionally by a North East team – Billy Webber, chief executive at Gateshead-based XR Therapeutics, said: “We can’t let talent slip through our fingers.

“I always look at players like Carrick and think, ‘how did we let him go!?’”

Richard Hogg, founder and chief executive at Newcastle and Teesside-based recruitment and outsourced people services partner Jackson Hogg, called for greater clarity.

He added: “There are a lot of people who would like to come into the sector – from those in laboratories to business development and sales – who don’t think they can.

“But they can, and the marketing is very important.

“We need to be clearer about access to the sector and the clusters of companies that exist.”

Richard was backed by Dr Labus, who revealed AMLo Biosciences has shifted its employment parameters.

She said: “Attracting people is a challenge, as is retaining them and ensuring we’re not treated as a stepping stone to the ‘golden triangle’.

“We previously tried to recruit people with exactly the right skills for jobs, which was very difficult.

“Instead, over the last 12 months, we’ve taken on people with transferable skills and invested in their training and futures.”

Prof Trenell pinpointed the pandemic’s legacy as a potential driver in securing talent.

Highlighting the rise of remote working, he said companies must make good use of opportunities to scout from pools previously out of bounds.

He said: “The decentralisation of talent, knowledge and clinical care is the biggest disruption in my lifetime, and there is a fantastic opportunity to not only retain talent, but bring people in.

“The game has changed, and we need to change the way we think.”

And Prof Trenell said the shifting landscape represents too an opportunity to fill management voids.

He added: “There is a gap around leadership, and if we are serious about creating a culture of nurturing new companies, we need people to drop in to them.”

Alex agreed, saying an influx of senior talent would “make a really big difference.”

He said: “We’ve got a lot of very good companies, some great graduates and people who can be trained up.

“But more people, who want to run businesses and work with company creation teams, would be incredibly beneficial too.”

To that end, Rick McCordall, head of company creation at Newcastle University, pointed to the ongoing success of the Northern Accelerator programme.

Backed by the European Regional Development Fund and Research England’s Connecting Capability Fund, the venture has to date helped spin out nearly 40 companies and raise more than £100 million investment by translating research from Durham, Newcastle, Northumbria, Sunderland and Teesside universities into multi-sector applications.

A chief cog in its wheels is the Executives into Business scheme.

Matching academics’ innovation with leaders’ commercial knowledge and experience, its play book includes Billy and XR Therapeutics, as well as Newcastle University fledgling Skin Life Analytics and Durham University and Heriot-Watt University collaboration Respiratone.

Through Executives into Business, Skin Life Analytics, which has devised a swab test to detect mitochondrial DNA damage, now counts experienced biomedical graduate Jonathan Brookes as chief executive, alongside founder and chief scientific officer Professor Mark Birch-Machin.

And Respiratone, known for a mobile device capable of identifying metabolic imbalances through breath, is complementing its academic advances with leadership from ex-Walgreens Boots Alliance global brand leadership and product development team member Laura Bond.

Highlighting the role of Northern Accelerator, which recently welcomed University of York to its fold, Rick said: “There is a real danger of losing the momentum we have achieved to date.

“Finding people to drive companies commercially is a challenge, and we need to make sure opportunities are adequately resourced right at the beginning, to realise their full potential.”

Dr Gerardos reiterated the importance of investment to employee retention.

He said: “This region has visionaries and leaders, and people who start businesses that can change the world.

“But when they start to grow, some find it isn’t the right place to be.

“We need machinery that keeps them here, that keeps things moving.”

Richard, Gary and Liz Rothery, senior manager at EY Private, pointed to additional recruitment magnets, such as organisations’ environmental and social commitments.

Richard said: “The firms retaining staff are the ones that have very strong values and a broad sense of purpose.

“Companies must think outside the box and understand what is driving people.”

Gary said: “Environmental, social and corporate governance strategies are coming through stronger and stronger.

“Initially, it was the larger companies, but it’s now filtering down to the smaller businesses, and we’re doing a lot with clients to embed those principles into our financial support.”

Liz added: “We are seeing clients do more to be attractive to employees, from providing electric vehicles to additional non-cash benefits that can be delivered relatively cost efficiently.”

THE NORTHERN ACCELERATOR PROGRAMME IS A FINE EXAMPLE OF SUCCESS THROUGH PARTNERSHIP. BUT IS THERE ENOUGH COLLABORATION TAKING PLACE ACROSS THE ENTIRE NORTH EAST TO ENSURE ITS HEALTHCARE SECTOR CAN TRULY THRIVE?

In the days following the roundtable, the cohesiveness of the region’s business community received a potentially significant boost, with the Government announcing its proposed £1.4 billion devolution deal.

Promising fresh powers across sectors including education, housing and transport, the new framework would replace both the North of Tyne Combined Authority and the North East Combined Authority, drawing together previously separate areas of the region under the guidance of a new mayor.

Supporters say the blueprint will catalyse enormous growth opportunities, building on the region’s innovative culture by providing scope for greater collaboration, the latter an area Prof Corner highlighted in the VISION 2031 discussion.

She said: “We recently launched the Quantum Health Longevity Innovation Mission, which is about saying, ‘we have a huge amount of knowledge already, but we can be an echo chamber repeating the same problems, so how do we take a leap forward?’

“We can do that through very effective collaboration and lobbying of things like regulatory changes.

“We are very interested in how we can leverage artificial intelligence and other new technologies to get ahead of the curve and begin creating health, rather than fixing people.

“There is enormous opportunity, and we have the ingredients; it’s now about how we come together and deliver it.”

Steven added: “Innovation is no longer insulated in the research and development departments of large corporates.

“They are realising collaboration happens when firms speak to each other.

“We’re an extremely collaborative region, which is a key, compelling advantage for us.

“It just needs to be unpacked.”

Billy, who is overseeing the rollout of XR Therapeutics’ cognitive behavioural therapy, which uses virtual reality environments tailored to patients’ unique circumstances, said the healthcare sector would benefit from a better connection conduit.

Citing an event in Sheffield, featuring a number of Yorkshire health trusts, he said: “We need a more joined-up approach, so things can happen more often and more quickly.

“A mechanism to show the trusts what we can do would be extremely beneficial, both in helping companies get a leg-up and increasing collaboration.”

And Richard spoke of his experiences at a recent Edinburgh business conference, focused on UK and US free trade agreements, to highlight the need for greater co-operation around financial support.

He said: “Each US state had an SME support-style organisation; they were a blueprint for getting through an investment round.

“And they all represented different parts of the economy – I don’t see much of that in the North East, or indeed the wider UK.”

LOOKING ACROSS THE NEXT DECADE, WHAT ARE THE KEY OBJECTIVES TO FURTHER BOLSTER THE NORTH EAST HEALTHCARE SECTOR?

Referencing a late 2022 event at Aviva’s London offices – organised by Northstar Ventures alongside Northern Accelerator and NewcastleGateshead Initiative to showcase the region’s investment possibilities – Alex said it was imperative the area continues to champion its story.

He said: “When people in London see the North of Tyne or Sunderland presenting, for example, they see a modest amount of opportunity.

“But when you put the whole region together, there is real potential for investment.

“There is big opportunity here, and that is important, because we need to start building more businesses that expand out of the North East.”

And Sir John said the region must keep on reminding those in the corridors of power of its potency.

He said: “The North East is a fantastic place to live and work, and we need to continue presenting that message.

“Science Minister George Freeman has been very supportive, and we have local MPs, like Berwick’s Anne-Marie Trevelyan, who we need to continue building connections with to promote our message.”

Sir John also suggested it would be prudent to begin planning for how a new Government could benefit the North East.

He added: “With Labour looking likely to win the next election, we should perhaps be having some detailed briefing sessions with the party about how it is going to take advantage of our strengths.

“We’ve led the way as a region before, with the railways and shipbuilding, and with the right support, we will do so again with healthcare.”

References:

1: Office for National Statistics: Exploring local income deprivation – www.ons.gov.uk/visualisations/dvc1371/#/E08000021

2: The Health Foundation: In the poorest parts of England, life expectancy for women is lower than in Colombia, Latvia and Hungary – www.health.org.uk/news-and-comment/news/in-the-poorest-parts-of-england-life-expectancy-for-women-is-lower-than-in-colombia-latvia-and-hungary