The past week brought a wave of announcements that rattled the UK life sciences scene. Three global pharma giants said they were scaling back or outright abandoning major UK investments. Merck shelved a planned £1 billion London research center and will withdraw from existing facilities at the Crick Institute and London Bioscience Innovation Center. AstraZeneca walked away from a proposed $270 million vaccine facility, and Lilly said it is reconsidering its Gateway Labs plans in the country.
On paper, this shouldn’t be happening. The UK has all the “right” ingredients: world-class universities, leading scientists, deep basic research, and a handful of major pharma companies headquartered there. Yet the mood among founders and investors on the ground is bleak. So this week on Is it for real? I’m asking: why has the UK struggled to turn its science into a lasting biotech hub — and what really makes places like Boston and San Francisco thrive?
1) The UK exodus
There are three overlapping factors that I believe led to this UK exodus:
Drug pricing. The UK sits at the extreme conservative end of drug value assessment. Through bodies like National Institute for Health and Care Excellence (NICE), it consistently pushes down what the NHS will pay for innovation. That may make sense for national budgets, but it erodes incentives for companies to invest heavily in UK-based launches or scale-ups.
Regulation that protects downside, not upside. Rules for startups around boards, ownership, and takeovers are designed to prevent conflicts and protect minority shareholders. For example, in the UK boards often discourage directors from holding shares. It’s a policy meant to avoid conflicts but one that ends up misaligning incentives. Instead of fostering ownership, these rules dampen risk-taking and discourage the kind of bold deal-making that helps startups grow into large-cap companies.
Geopolitical pull factors. Many of these corporate moves are also signals aimed at the U.S. Big Pharma is under pressure to demonstrate domestic investment in return for favorable policies. Drug prices alone do not explain the retreat since they are only somewhat lower in the UK than elsewhere in Europe. The bigger motivation is to show Washington that capital is flowing stateside. In today’s political climate, few signals speak louder than redirecting billions in R&D and manufacturing from Europe to the U.S.
The paradox is clear: the UK produces stellar science but has not created the conditions for that science to compound into enduring, scaled companies.
2) What actually makes a biotech hub? Lessons from Boston and SF
The conversation naturally turned to what differentiates a true biotech hub from a promising science cluster. Boston/Cambridge and the Bay Area didn’t just get lucky. I believe they built stacks of reinforcing advantages:
World-class science. At the foundation, there is the science. In Boston, institutions like Harvard, MIT, and the Broad Institute generate a continuous stream of discoveries that seed new startups. The density of research powerhouses ensures a constant flow of cutting-edge ideas, and just as importantly, well-developed pathways exist to translate those discoveries into companies. These hubs are structured to move data out of the lab and into real products quickly, reinforcing the cycle of innovation.
Access to capital. Having investors who understand biotech’s long, uncertain development cycles is essential. Generalist investors often find biotech “uninvestable” when the whole sector looks unprofitable. But in Boston and SF, specialist investors cluster, creating deep pools of capital at every stage (seed, crossover, and IPO) that reward running the hard experiments instead of chasing only M&A exits.
Clinical proximity and talent density. A hub needs more than CEOs. It needs CFOs who can navigate capital markets, regulatory experts who know how to move drugs through the FDA, and operators who have scaled companies before. One of the weaknesses in the UK is not scientific talent, but a lack of financial and operational leaders trained to build high-growth startups. By contrast, Boston and SF recycle talent from past successes, producing a deep bench across functions.
Pharma next door. Proximity matters. In Cambridge, MA, a founder can literally walk to the offices of multiple Big Pharmas in 25 minutes. The ability to test strategy with downstream partners early, form licensing deals, and get feedback on development choices is priceless. This kind of cross-fertilization accelerates both startups and pharma, making the ecosystem more than the sum of its parts.
Policy that rewards upside. U.S. hubs benefit from structural advantages such as NASDAQ listings that support high-growth biotech IPOs, tax incentives, and takeover norms that favor ambitious company building. The focus is less on guarding against failure and more on creating conditions where success can compound.
Cultural optimism. Perhaps the most underrated ingredient, Boston and San Francisco both default to optimism. Even when the fundamentals are shaky, the instinct is to push forward and run the experiment. That mindset keeps capital flowing and teams motivated through lean years, and it explains why, even at the height of the so-called biotech winter, these hubs remained relentlessly forward-looking
In contrast, the UK ecosystem lacks pieces of this stack. The science is there. The capital and policy incentives are not. Experienced repeat operators are fewer, and the regulatory climate does more to guard against conflicts than to foster growth. Until those missing links are addressed, the UK risks watching its best ideas commercialized elsewhere.
3) My take: Innovation is hard … and expensive
So, are biotech hubs “for real”? The answer is yes, but only when the full stack of ingredients comes together: science, capital, talent, pharma, enabling policy, and cultural optimism.
The UK’s struggle shows what happens when even one of those pillars is missing. Conversely, Boston and San Francisco thrive because every piece reinforces the others.
At the end of the day, innovation is hard and expensive. Drug prices are not just about recouping past costs; they are what fund the next wave of experiments. Government policy that recognizes this is critical. Undervaluing innovation means less of it. Over-reliance on M&A, meanwhile, drains the ecosystem of companies that could have scaled independently and trained the next generation of operators.
Building hubs isn’t about luck or branding. It’s about creating the right environment for risk-taking, optimism, and reinvestment. When those conditions exist, the hub is real. When they don’t, even the best science risks going elsewhere.
Here is what I am into:
What I am watching closely
This article in the Wall Street Journal covers the Trump administration’s move to tighten rules on direct-to-consumer drug advertising. We all know these ads are broken. They have been parodied endlessly on SNL for good reason. But this latest push is worth watching closely because it will not just affect drugmakers. The real ripple could be in how TV networks price their inventory, since pharma is one of the biggest ad buyers on live TV.
What I am optimistic about
This post by Dr. Jon Slotkin lays out a future where anything less than a self-driving car might one day be considered too reckless. The data is staggering: Waymo cars show 91 percent fewer serious crashes, a 95 percent reduction in dangerous intersection accidents, and tens of thousands of lives saved if adoption scaled nationally. What struck me most was his framing that this is not an incremental gain but a categorical shift. After reading it, I could not help but think how exciting it would be to live in a world where safe roads are the norm rather than the exception.
What I think everyone should know
The origin story of Ozempic is an extraordinary mix of science and business. This YouTube video deep dive nails how GLP-1 moved from a lab curiosity to a blockbuster class: from identifying the active GLP-1 fragment, to exendin-4 from Gila monster venom, to Novo Nordisk’s long-acting designs like semaglutide. It is a reminder that breakthrough drugs come from decades of careful biology, clever protein engineering, and patient capital. And a special shout-out to Dr. Svetlana Mojsov at Rockefeller University, whose foundational GLP-1 work helped set this whole field in motion.
What nobody knows
What is a catch? This video resurfaced on my X feed and it begs the ever evolving question. Okay maybe if you are a Steelers fan, don’t watch! Happy Sunday!
Thanks for joining me. See you in two weeks. For thoughts, comments or feedback, you can reach me at [email protected]
Yours truly,
Gad