Profile of Birminghams Medical Technology Sector

Profile of Birminghams Medical Technologies Sector

The Medical Technology sector

Introduction This profile is one of a suite of seven covering key High Growth Sectors in Birmingham. The profiles were compiled in 2009 and go beyond analysis of the available datasets, to enable us to understand how the sectors support the local economy now, and how we can develop their potential for the future. This has been achieved by integrating data analysis with intelligence from sector experts drawn from businesses, research institutions and networks. Each of the profiles presents statistical information, along with case studies, an analysis of the sector today, and future challenges and opportunities. The seven sectors are: Business and Professional Services

233
firms in the Medical Technology sector

1,600
employed in the sector

Financial Services Creative, Media and Digital Medical Technology Transport Technologies Low Carbon Advanced Manufacturing
The new Queen Elizabeth Hospital

45%
Business birth rate between 2005 and 2010

Sector overview Our definition of Medical Technology is broad, considering medical technologies (e.g. assistive devices, medical devices) as well as pharmaceuticals and medical biotechnology, although pharmaceuticals is not a major area for Birmingham. Medical technologies are a vital part of everyones life and an increasingly important sector for the UK economy. In this profile, we examine the current state of the medical technologies sector in the city, outline Birminghams key assets and discuss how the sector is seeking to develop a competitive advantage to place it at the forefront of new investment and innovation. The sector nationally is growing, representing an increasing share of manufacturing output. Pharmaceutical and medical technology sectors combined in 2010 accounted for around 6.5 per cent of all manufacturing Gross Value Added (GVA) in the UK, up from 4.1 per cent in 1997. Productivity in the sector is also on the rise with GVA per employee increasing by 39 per cent in Medical Technologies. Employment in the broader definition of life sciences is growing as a share of total UK employment (BIS, 2010).

Profile of Birminghams Medical Technologies Sector

Meanwhile, healthcare expenditure worldwide is increasing. Data from the World Health Organisation shows that total expenditure on health per capita increased from US$477 per annum in 1996 to US$851 in 2006, an increase of 78 per cent. At the same time, in western countries, there are acute demographic changes with general trends towards ageing populations. There are ever shifting patterns of illness and diseases meaning that innovative health services and products are always in demand. These macro trends towards greater healthcare expenditure and the demand for innovation means that the Medical Technology market has great potential in both Birmingham and the UK. Market challenges While the market offers a lot of potential, it has many complex characteristics and issues that make its development less straight forward. Some of these characteristics are shown in the box below (BIS, 2010). These imply that a thriving medical technology market needs to have access to skilled labour with specialisms in biosciences, a risk seeking-healthy capital market, and good relationships with large procurers of medical services, among other traits.
Market characteristics

High R&D intensity High development costs and up-front investment Challenging intellectual property issues Long product development timescales Complexity in the development of medical devices High levels of technological uncertainty Distinct funding cycle

The UK is currently pipelining one in five of all medical biotechnology products in trials and here in the West Midlands there is a high density of specialist manufacturers within the sector'' Tony Davis, CEO, Medilink UK (source: Midlands Business News)

These product market characteristics are further exacerbated by restricted access to the NHS by innovative SMEs. While the NHS is one of the largest health providers in the world, its procurement systems are recognised as a hindrance to innovation and commercialisation. The current proposals for reform in the NHS are uncertain and it is not yet clear whether the process of supplying goods and services into the NHS will be simplified or streamlined.

The medical technology sector faces increasing competition from foreign competitors with countries including China, India and some Eastern European countries becoming key competitors in clinical trials and clinical R&D. Clinical trials research over recent years has become increasingly globalised with emerging markets taking an ever increasing market share, as standards increase and costs fall. National policy is important in this area, with R&D credits allowing research units to remain Birminghams Life Science Firms by sub-sector in 2010 competitive in the face of higher costs relative to emerging markets, and other advanced economies. This increasing globalisation of the industry is confirmed by the fact that UK firms have themselves begun to outsource elements of operations (BIS, 2010).

Profile of Birminghams Medical Technologies Sector

The business base According to our definition there are 233 sector firms operating in the city, employing 1,600 people, and representing one per cent of the UK industry. 73 firms in Birmingham manufacture medical and surgical Largest sector employers in Birmingham equipment. A lower number are involved in the production of The Binding Site 375 medicines (11 firms) and fewer Werfen Control S.L. 350 still in pharmaceutical Salts Healthcare Ltd 150 manufacture (2 firms). R&D in Birmingham Research Park Ltd 120 Natural Sciences and Engineering Bionostics Holdings Ltd 106 has significant presence in the Rsl Steeper Holdings Ltd 60 Farmoza Ltd 50 city but this is likely to include Bodyguard Work Wear 40 non-life science based The Hearing Services Centre 35 businesses. Between 2005 and Euroshowers (Midlands) Ltd 27 2010, 105 medical technology firms were created, representing around two fifths of the 2010 stock being established since 2005. In the same period, 39 firms were wound up representing a loss of 23 per cent of the business base. These birth and death rates are favourable compared to the UK average. While we can evidence increases to the business base, between 2005 and 2010 the employment in the sector fell by 16 per cent, four fewer employees on average per firm. GVA in the Birmingham medical technology sector was almost 180m in 2010. The largest firm and most successful medical technology business in Birmingham in recent years has undoubtedly been The Binding Site. With 375 employees in the city, the company is a specialist protein company committed to the development of innovative immunodiagnostic assays. From its origins as a research group at the University of Birmingham, The Binding Site now has offices worldwide, a brand new headquarters in Edgbaston, 460 employees worldwide and an annual turnover of at least 33m. Large firms in the sector include Salts Healthcare Limited, a manufacturer and supplier of stoma care and orthotic products and one of the oldest family-owned companies in the UK. In addition to The Binding Site, there have been several other university spin outs over the past few years including Microbial Systems Limited (1988), Peptide Theraputics (1992), IMT Limited (1996), Hybrid Systems (1998), Cobra Therapeuatics (1999), Cellyntx (2007), and most recently a spin-off of PsiOxus (formerly Hybrid Biosystems), the Native Antigen Company will have operations in Birmingham and commercialise further the isolation and purification of both viral and bacterial native antigens. While this spin-out activity is welcome, the scale and effectiveness of spinout activity is still in its infancy compared to other cities and universities across the UK (such as Manchester and Warwick Universities).

180m
contribution to the citys economy

Five
firms have their headquarters in Birmingham

2%
of firms are foreignowned

Profile of Birminghams Medical Technologies Sector

In terms of the spatial location of the sectors businesses there are significant groups of firms located near key research assets, for example there is a cluster of businesses around the University of Birmingham, Queen Elizabeth Hospital and Aston University.

Birminghams medical technology assets While the evidence suggests that the citys medical technologies business base is not large, the city has characteristics which means that it has significant potential to develop as a high growth sector. - The NHS as a market and an innovator The NHS is the major purchaser of medical devices, new medicines and other healthcare services in the UK. The service has a very strong presence in Birmingham hosting the following PCTs and Hospital Trusts: Queen Elizabeth Hospital, Heartlands Hospital, Birmingham City Hospital, Sutton Coldfield Good Hope Hospital, the Royal Orthopaedic Hospital, Birmingham Childrens Hospital, Selly Oak Hospital and Birmingham Dental Hospital. The city also has several major private health providers including The Priory Hospital and Edgbaston Hospital.

Profile of Birminghams Medical Technologies Sector

Particular research specialisms include womens health at Birmingham Womens Health Care NHS Trust, paediatrics at Birmingham Childrens Hospital NHS Trust, and andorthopaedics and locomotion at The Royal Orthopaedic Hospital NHS Trust. The NHS plays two further important roles in the sector: clinical research and innovation. NHS staff (surgeons, clinicians and consultants ) conduct clinical research, often in collaboration with academic peers, providing a stream of knowledge with the potential to generate commercial value. In clinical settings, NHS professionals often devise innovative new products, services and processes which have a commercial value in terms of intellectual property rights, or in some cases direct commercialisation. This has been recognised recently with the joint announcement by the University of Birmingham and University Hospital Birmingham NHS Foundation Trust to establish a world-class medical, technology research and training academy in the city.
''The new QE super hospital and the University of Birmingham Medical School can form the hub of a thriving medical and life sciences sector Andy Mountain, Alta Innovations

- Research base Closely linked to the NHS, the citys research base is highly regarded with the University of Birmingham, Aston University and Birmingham City University bringing complementarities to each others research activities that mean that the city has expertise in the whole sphere of life sciences. The University of Birmingham has an internationally recognised medical school. The College of Medicine and Dental Sciences has invested more than 73m in an ongoing programme of works to improve and expand its research and teaching facilities, with the aim of advancing its position at the forefront of developments in medical science, including the 35m Institute of Bio-medical Research. From 2010 the College began to deliver high quality laboratory and clinical research facilities within the new Queen Elizabeth hospital including a new purpose-built HTAcompliant biorepository, gene therapy pharmacy, a mobile clinical research facility and commercial spin out laboratory. The latest research centre exercise shows that the colleges strategic research strengths include Cancer Sciences, Hormones & Genes and Primary Care research. The college hosts the Henry Wellcome Building for Biomolecular Nuclear Magnetic Resonance, a 10m national facility, and the UK's largest , providing academic and industrial users with open access to six NMR spectrometers.
Life Science Research at the University of Birmingham

Cancer Auto-Immune and Inflammatory Disease Infectious disease Neuroscience Cardio-Vascular Medicine Tissue Repair and Biomaterials Molecular Cell Biology and Molecular Microbiology

Structural Biology, Genomics and Proteomics

Biochemical Engineering Medical Imaging Nanotechnology Diagnostic Instruments and Devices Clinical Systems Management

Profile of Birminghams Medical Technologies Sector

Further development of the research base comes in the form of the Centre for Clinical Haematology (CCH), a newly established clinical research facility developing and delivering novel drug and transplant therapies in patients with haematological malignancies (Collinge et al, 2009). In January 2011, the college announced a 20m trauma care collaboration. The National Institute for Health Research (NIHR) Centre for Surgical Reconstruction and Microbiology aims to bring together military and trauma surgeons alongside scientists to share their medical research expertise to boost trauma care delivery at the earliest stages of injury. The Medici project (Burfitt et al 2005) states that Birmingham is the largest recipient of research funding in the West Midlands within its mapping exercise of medical research excellence across the region. Aston Universitys Life & Health Sciences Department is a leader in ophthalmic research, with one of the largest departments in the country and rated 5 in the latest Research Assessment Exercise. Neuro-imaging is also a particular strength, with th university housing the only MEG scanner in the region. Particular advantages are drawn from the presence of both MEG and MRI scanning systems for example in research around sports and leisure injuries. The department hosts the Aston Brain Centre (ABC), an integrated research environment for the study of neurodevelopment in health and disease. In addition, the Aston Research Centre for Healthy Ageing (ARCHA) was launched in 2009 delivering multidisciplinary research into the impacts of an ageing population. It also houses the Academy of Life Sciences, offering diagnostic and surgical services for eye care and brain imaging. The Academy is founded on the principle of collaboration between academic research and private medical care. A major focus of activity is in new treatments in cataract, refractive surgery, macular degeneration and diabetic eye disease. Further strengths of the University include refractive surgery, audiology and pharmacy. Birmingham City University (BCU) is home to a large faculty of health, the most significant trainer of nurses and allied health professionals in the region. Its research and innovation strengths are in the delivery of healthcare and the application of new technologies. Examples of collaboration and innovation with the local NHS include

Aston University: Research Strengths

Neurosciences: including multi-channel

electroencephalography (EEG) systems, evoked response systems, brain mapping software, magnetoencephaolography (MEG) and ophthalmic optics and vision sciences

Microbiology: Core research interests

include applied microbiology, food microbiology and molecular microbiology

Biomedical engineering: investigating

monitoring, diagnosis and surgical tool solutions with insights from Mechatronics, Information Technology and Micro/Nano fabrication technologies

Molecular Biosciences and Biomedical Chemistry: The blockbuster drug Temodal for certain brain cancers was first synthesised and developed at Aston. The Biomedical Chemistry Group also researches human breast cancer and brain tumours, with world-renowned experts on cancercachexia, in both its mechanism and treatment.

Bio-materials: Main research centres on

the synthesis and behaviour of polymers, particularly hydrogels, for biomedical applications and devices

Profile of Birminghams Medical Technologies Sector

new head gear for surgery following work with Birmingham Childrens Hospital, and applying Digital Media to the teaching and simulation of clinical conditions through the Virtual Case Creator Project. - Clinical trials The University of Birmingham has one of the largest clinical trials clusters in the UK. With more than 25 years of experience, the university operates three units in the city . The Cancer Research UK Clinical Trials Unit (CRCTU) stands comfortably between the Pan Birmingham network of hospitals, that serve a population of more than 5,000,000 people, and a large basic science research group of more than 200 researchers situated at the University's Institute of Cancer Sciences. From identifying quicker and better ways to diagnose cancer to harnessing viruses in the fight against cancer, the University of Birmingham's cancer experts are committed to finding ways to individualise cancer treatments and reduce the toxicity of the treatment, so that life after cancer is improved. The CRCTU was established in 1983 and in 2007 had live funding at around 20m. In the past three years CRCTU staff have contributed to more than 140 clinical trials, acting as the coordinating centre for 58, with more than 39,000 patients participating. The Birmingham Clinical Trials Unit (BCTU) undertakes high-quality innovative clinical trial research in specialty areas other than cancer and primary care. Trials involve pharmacological, non-pharmacological and community-based interventions. The final clinical trials unit is the Primary Care Clinical Research and Trials Unit (PC-CRTU). There is scope for further opportunities in clinical trials in Birmingham, particularly on a commercial basis. Several reports have identified this as a strength and opportunity for the city over the years. This belief is based on the pre-existing research base and clinical excellence in the city, access to knowledge and experience of clinical trials, as well as the demographics of the city. The population of Birmingham is one of the most ethnically diverse in the UK, meaning that access to client groups is near unrivalled given it has over 1 million residents. - Science Parks Birmingham hosts two well established Science Parks that provide space, infrastructure, business support, networking and commercial opportunities for business. Birmingham Research Park (BRP) is associated with the University of Birmingham. Located close to the Edgbaston Campus, BRP offers purpose-built accommodation to organisations seeking to work in research, development and training. Currently BRP hosts a number of medical technology and life sciences firms, accessing university facilities and expertise. Birmingham Science Park Aston provides support and opportunities for early stage businesses in Medtech, Cleantech, digital & media and ICT. Located adjacent to Aston University, the park currently houses a number of medical technology firms alongside many innovative IT and digital & media enterprises. - Support infrastructure Birmingham has access to several institutions that enable commercialisation and innovation in medical technology. Medilink West Midlands was launched in 2002 providing specialist business support to the medical technologies sector. Other

Profile of Birminghams Medical Technologies Sector

organisations are focused on innovation and commercialisation from within the NHS. Midtech is one of nine regional innovation Life Sciences companies in hubs established to identify, protect and Birmingham Research Park develop innovations from within the health Celentyx service. Alta Innovations is the technology transfer company for the University of CLRN (clinical trials) Birmingham, facilitating partnerships between DPMD (managing PG training for academics and business, as well as encouraging innovation and enterprise among academic staff. Birmingham also has some implicitly important infrastructure for the development of the sector including professional and legal services, and access to venture capital and other sources of finance. - Birmingham Science City
defence medical services)

InnovationXChange (Consultancy) M&G S Blood Supply Service

(monitoring blood products to the armed forces)

National Blood Service

(management of blood supply in the WM NHS)

''Birmingham has the component parts of a world class healthcare sector'' John Gibney, University of Birmingham

Birmingham is one of six cities across the UK who have been granted permission to create a Pan Birmingham Cancer Network Science City: a collaboration between higher (clinical trials) education, government and business to Synexus Midlands Clinical promote economic growth through the Research Centre scientific assets of a city. It does so by Tracer measurement systems promoting effective knowledge exchange, (R&D services for portable supporting demonstrator projects, and medical devices) showcasing new science based market Xenobiotika (Biotechnology opportunities. Birmingham Science City also services) invests in commercially relevant infrastructure and aims to ensure that the city and wider region has the access to skills it needs. In particular, the Science City Research Alliance (between Birmingham and Warwick Universities) is developing the Human Biomaterials Resource Centre (HBRC) and promoting collaborative clinically focused research through the translational medicine (TM) programme. The TM programme recognises that real excellence in medical research comes from collaboration with non-clinical research disciplines such as engineering, biological sciences, mathematics and computer science. In particular, this aims to better translate research into commercial applications. The programme, aims to develop the clinical trials infrastructure to support the translation of advances into improved patient care and to work through an experimental network of excellence to engage partners and lead to a steady pipeline of opportunities. Five research themes have been prioritised through the programme: infection, neuroscience, metabolism, cardiovascular health, and reproduction. The Science City Research Alliance has successfully levered some 40m of additional research funding from research councils and others - demonstrating the effectiveness of collaboration.

Profile of Birminghams Medical Technologies Sector

Developing competitive advantage in Birmingham While Birmingham already has a range of assets to support the medical technology sector, there are further planned developments which may catalyse its growth further. - University Science Park, Pebble Mill The University of Birmingham, Calthorpe Estates and other partners are supporting the 90m development of a Science Park at the old BBC Pebble Mill site. Central to this are plans for a biotechnology incubator. The site has gained planning consent for flexible office or laboratory space for companies engaged predominantly in research and development activities, with the remainder of the site to be developed according to customer requirements. The first building in the parks phased development - the biotechnology incubator - will provide start-ups with physical space, wet and dry laboratories, meeting and conference rooms, specialist business support and other support services and networking opportunities. - Human Biomaterials Resource Centre (HBRC) Work has begun on HBRC, a facility dedicated to the collection and storage of quality-assured biomaterials for distribution to biomedical research groups in academia and industry. Licensed by the Human Tissue Authority, planning consent has been granted and construction of the facility has already started. The biorepository is one of several translational medicine projects being carried out under the umbrella of Birmingham Science City. - Defence Medicine The establishment of the Royal Centre for Defence Medicine at the new Queen Elizabeth Hospital provides a real opportunity for further specialism in Birminghams medical technology sector (e.g. infection control, burns, and traumatology) - Manufacturing diversification There are a small number of cases of manufacturers in the city diversifying into medical technologies. Seating Design & Development Ltd, for example, have successfully diversified their MouleTec seating concept from the transport market into medical.

Profile of Birminghams Medical Technologies Sector

Future opportunities The Medical Technology sector in Birmingham is small, but strong in certain niche areas. While the city has never identified pharmaceuticals as a growth sector, it does provide a valuable platform for clinical trials. Its manufacturing base may also offer highly specialised developments for a healthcare market that is only likely to grow in coming years. Commercialisation of university research could be improved - and is already a focus for initiatives such as Birmingham Science City - but the underlying research base is deep and well-established. Tapping that research base more effectively would greatly increase the economic value of the sector to the city, as would unlocking the procurement processes of the NHS. More generally, the city has a strong academic research base, access to clinical excellence, a developing culture of collaboration, and the right planned infrastructure to catalyse the development of the medical technology sector. Already, commercial partners are recognising this potential. The investment in the future University Science Park is a key signal to the market of the citys potential in this area.

Further Information Reporting and analysis by Consulting Inplace . Unless otherwise specified, the statistical data in this profile relates to 2010 figures, based on a bespoke sector definition determined by Birmingham City Council for the purposes of this research. Data comes from TBR and may therefore differ from ONS and other business datasets. Copies of all seven High Growth Sector profiles can be downloaded from: www.birmingham.gov.uk/birminghameconomy Further information about this profile can be obtained from: Economic Strategy Birmingham City Council PO Box 14439 Birmingham B2 2JE T +44 (0) 121 464 2114 E birminghameconomy@birmingham.gov.uk Get in touch with Business Birmingham's specialist inward investment team to find out more about the opportunities Birmingham offers: T +44 (0) 121 202 5022 E invest@marketingbirmingham.com W www.businessbirmingham.com

Profile of Birminghams Medical Technologies Sector