Meeting of the Parliament (Hybrid)

Meeting date: Wednesday, August 26, 2020

Official Report 1162KB pdf

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Life Sciences Innovation (Covid-19 Response)

Good afternoon, everyone. The next item of business is a statement by Ivan McKee on life sciences innovation and the Covid-19 response. The minister will take questions at the end of his statement, so there should be no interventions or interruptions. You have up to 10 minutes, minister.

14:30  

Thank you, Presiding Officer.

This is my second parliamentary statement on the response of Scotland’s businesses to Covid-19. Since the start of the pandemic, I have worked with Scotland-based manufacturing companies to develop a resilient business response to current and future needs.

On 27 May, I updated the Parliament on our work to create and strengthen Scottish supply chains to produce personal protective equipment and other critical products for NHS Scotland. A company that I mentioned in May, Alpha Solway, which is based in Annan and Dumfries, purchased machines to make masks and switched from making clothing to making visors. Earlier this month, Alpha Solway secured work for a £53 million order for NHS Scotland. Over the next year, it will supply 232 million surgical masks, 6 million respirator masks and 2 million visors—and it will create 200 new jobs in Dumfries. That is great news for the company and for the local area, and it shows that Scottish businesses can be cost competitive in that sector on the global stage.

Today I will focus on how life sciences companies are supporting our response. Much has been made possible by investment by the Scottish Government and our agencies. The sector has achieved, on average, year-on-year growth of 10 per cent since 2010 and has contributed £2.4 billion gross value added. It contributes around a fifth of Scotland’s business enterprise research and development spend and is a major contributor to our exports.

I have the pleasure of co-chairing the life sciences Scotland industry leadership group, and I assure the Parliament that the sector remains ambitious and focused. I thank Dave Tudor, my co-chair, and members of the ILG, past and present, whose commitment and effort mean that we are delivering results. Dave Tudor’s day job is heading up the medicines manufacturing innovation centre, which is concentrating on strengthening our manufacturing capacity and supporting the United Kingdom vaccine task force.

My aims for the sector are to anchor high-quality companies in Scotland, build a world-class life sciences cluster and attract additional investment to Scotland. A recent example of support in that regard is the investment to anchor ODx Innovations and its medical testing business in Inverness. Highlands and Islands Enterprise made R and D investment of £1.75 million to support the company’s fit-out at Solasta house—the Inverness city region deal health and life sciences building—creating up to 60 new jobs and growing the company’s global reputation.

In this statement, I will not be able to do justice to all the companies in the sector. I apologise to those that I will miss out because of time pressures. However, I hope to give the Parliament a flavour of the ability and strength of our life sciences sector. There is a more comprehensive account of the response in the accompanying report that I will publish today.

I acknowledge the hard work of companies who have protected their staff and customers by adapting their workplaces to enable staff to work safely and securely. I thank the trade unions and the Health and Safety Executive, which supported the development of sectoral guidance.

Scotland-based companies have been active in critical parts of the Covid response, including testing supply, vaccine development, the vaccine supply chain and repurposing drugs. I will cover each in turn.

I have been working to develop a strong pipeline to achieve our test and protect priorities. We continue to build strong collaborative working across Scotland. One such partnership is with Thermo Fisher Scientific, which is based in Inchinnan and Perth. The company is a key partner in the lighthouse laboratory at the University of Glasgow Queen Elizabeth university hospital campus, and is partnered with two other Scotland-based businesses, BioAscent and BioClavis, and with the University of Dundee and the Beatson institute. The collaboration received dedicated support from Scottish Enterprise and the Scottish Manufacturing Advisory Service to optimise the throughput of test samples by the adoption of lean manufacturing principles in the lighthouse laboratory. Thermo Fisher Scientific expects increased demand for its products using the Covid-19 polymerase chain reaction testing workflow, and it is increasing manufacturing capacity in Scotland. It will shortly supply 20 million tests per week globally and is also supporting the United Kingdom response with 4.5 million sample collection and transport kits provided weekly as the result of its $25 million investment in its Perth facility.

Thermo Fisher Scientific is also making a substantial investment of $100 million in the Inchinnan site to support European, middle eastern and Asian bioprocessing customers and, importantly, the vaccine development work that is happening in the UK. The company previously received regional selective assistance funding of £1.9 million from Scottish Enterprise to bring ?£12.6 million into its advanced granulation technology facility in Inchinnan, which created 30 jobs and safeguarded 47.??

At a time of global shortages, we sought companies that could offer an immediate response to the pandemic. One of those was Dundee-based Hutchison Technologies, which was supported with £250,000 of RSA funding from Scottish Enterprise in 2016 for new premises. This year, the company worked with NHS Scotland to source 3.4 million approved and quality-assessed swab-sample test kits to address our urgent need.

Extraction media for use with test swabs was also in short supply. E&O Laboratories, which is based in Bonnybridge, rose to that challenge. The company previously received support to expand its premises, including a £425,000 RSA grant from Scottish Enterprise in 2015 to build an additional lab facility in Cumbernauld. This year, the company expanded from making filled petri dishes to producing viral transport medium. To do that, it has re-engineered machines for automation and retrained staff, leading to a £7 million contract with NHS Scotland.

The development of a reliable and clinically approved vaccine is of fundamental importance in the fight against Covid. Scotland has historically been strong in pharmaceutical services and has a major role to play in the response, including in two major UK collaborations at Imperial College London and the University of Oxford. We are also supporting the wider supply chain.

Valneva Scotland Ltd, in Livingston, which is part of a French group, is expected to create 75 additional jobs in developing a new coronavirus vaccine. If proven to be safe and effective in clinical trials, the expanded Livingston facility could supply up to 100 million vaccine doses worldwide. The site has had continued Scottish Enterprise support, including £250,000 to support the creation of a research and development hub in 2015. The company recently received a £925,000 research and development grant related to the development of a separate viral vaccine.

ReproCell Europe is also supporting vaccine development following recent expansion, supported by £150,000 from Scottish Enterprise in 2017, to move into the West of Scotland Science Park. The company joined a European consortium to develop a messenger RNA vaccine for high-risk populations.

Vaccine development has a complex global supply chain. Stirling-based Symbiosis Pharmaceutical Services is a contract manufacturing business that specialises in fill-finish. The Scottish National Investment Bank has a 25 per cent equity stake in the company, which announced an agreement with AstraZeneca to provide access to sterile manufacturing capabilities for clinical trials.

SGS UK Ltd, in Clydebank, also has an agreement with AstraZeneca. Part of a Swiss group, the company provides analytical testing services to support the Oxford collaboration. The company received Scottish Enterprise support for its expansion project in 2017. That support was worth £9.6 million, supported 19 new scientific jobs and safeguarded 50 other jobs. The company also received a research and development grant award of £1.79 million.

Merck BioReliance in Irvine supplies chemicals that control vaccine pH levels. It has been working primarily with the Jenner Institute in Oxford on a project that reduced the vaccine development time from one year to two months. During the past five years, the company has received Scottish Enterprise support of £125,000, primarily in capital investment to support laboratory expansion and training.

The Covid-19 response has also resulted in diversification of products as companies respond to the longer-term impact on patients. Novabiotics in Aberdeen has been testing one of its drugs on Covid-19 patients with secondary lung infections—an antibiotic that helps them tackle drug-resistant bacteria. Since 2005, the company has been provided with £3 million in equity and loans by the Scottish Investment Bank, representing an 18.2 per cent stake in the company.

Pneumagen in St Andrews has run successful trials to prevent coronavirus-related respiratory tract infections. In May, it received £4 million of investment from Thairm Bio and the Scottish National Investment Bank for work on the development of Neumifil for prevention and treatment, which is due to start next year.

This is a fast-moving sector. Only last week, LumiraDx, which is based in Stirling, received emergency use authorisation from the US Food and Drug Administration for its new antigen test, which is going through the final stages of validation for use in Scotland. This UK-based company has developed a Covid-19 test whose results can be available in only 12 minutes, which could revolutionise the fight against the virus. Today I can announce a £6.76 million deal to purchase the test devices, which will be manufactured in Scotland, thereby creating local jobs and again highlighting the important R and D work that is being done here. The company has been recognised by the Bill and Melinda Gates Foundation for its innovative work. It will supply NHS Scotland with 300 instruments and a minimum of 500,000 tests, which will be of huge importance to our test and protect strategy.

Looking ahead, we expect to see continued developments in our testing capability by making sample collection simpler and turnaround times quicker. We continue our work on supply chain resilience and on future needs, and progress is being made to develop rapid or near point-of-care testing, especially in remote areas.

As Minister for Trade, Investment and Innovation, I am keen to ensure that opportunities in Scotland are communicated to trading partners and companies that wish to collaborate to support economic growth and the achievement of our health and wellbeing priorities.

I have set out some examples of the great work that is taking place right here in Scotland, which demonstrate the capability and skills in our life sciences sector and the key roles that such businesses play in the global response to Covid-19. I am very proud of all that has been achieved, and I look forward to seeing the sector continue to grow and thrive in the future.

The minister will now take questions on the issues that were raised in his statement. I will allow around 20 minutes for those, but I would appreciate succinct questions and answers, please. It would be helpful if members who wish to ask questions would press their request-to-speak buttons now.

I thank the minister for advance sight of his statement. I, too, pay tribute to the many companies that are contributing to the fight against Covid-19—especially those that are involved in the PPE supply chain, vaccine development and supply, and testing, which he mentioned in his statement.

I also acknowledge the minister’s comments about the medicines manufacturing innovation centre supporting the UK’s vaccines task force. That is a good example of Scottish and UK agencies collaborating in the fight against the virus.

I have two questions. First, the 2017 life sciences strategy for Scotland pledged to increase the industry’s contribution to the Scottish economy to £8 billion by 2025. In light of the pandemic, I ask the minister whether that is still the target that the Scottish Government is working towards and, if so, whether it will be achieved. Secondly, I welcome the development of rapid or near point-of-care testing in rural areas, especially given the issues that we have had this week. Can the minister provide any more details of when that service will become available?

On the member’s first question, he might be aware that the sector was previously running well ahead of the target to hit turnover of £8 billion by 2025. Last year’s numbers were significantly higher than those for the year before. Clearly, Covid-19 has had an impact across the whole of our economy, and the life sciences sector is not immune to that. That said, many parts of the sector will, of course, see their business increase as a consequence of the pandemic.

It is too early to say whether that target will be achieved. I am keen to see us still shooting for it—I think that it will still be possible—but, until the dust settles and we see the impact of the pandemic on the sector, it is probably too early to commit to that in its entirety. I would also like to talk to the life sciences Scotland industry leadership group and reflect further on that.

The member’s second point was about the impact that the LumiraDx technology, which will be manufactured in Scotland, will have on point-of-care testing. Of course, being able to have a test result available within 12 minutes would be significant. As I said in my statement, the final stages of assessment of that technology are happening in Scotland, with a view to its being used here, and we should receive those assessments soon. The number of units that the company will be able to produce will be constrained by its manufacturing capacity, but we expect to receive the first of them very soon. We have offered the company every assistance—such as help with the acquisition of skills; lean manufacturing support through the Scottish Manufacturing Advisory Service; and any support that it might need from us to enable its broader supply chain to accelerate the manufacture of instrumentation required for such tests. Therefore we should start to see those tests coming on stream very soon.

The “Government Expenditure and Revenue Scotland”—GERS—figures that were published today make grim reading, so the Scottish Government needs to use every lever at its disposal to build our economy. Life sciences provide opportunities to do that, and we need to support them, especially when they begin to export. We need to ensure that ownership is retained in Scotland.

We also know that the sector lacks suitably skilled entrants, especially women. Will the Scottish Government therefore use its jobs guarantee scheme to fill that gap and encourage people to join the sector or, indeed, to reskill within the sector? There is a shortage of women in the sector, and women are also disproportionately impacted by Covid-19—indeed, they face an unemployment rate that is 50 per cent higher than that for men. Will the Scottish Government change its wrong-headed approach to its youth jobs guarantee scheme and include women, thereby building the life sciences sector and dealing with the impact of Covid-19?

My colleagues in the economy and business portfolios will comment on the jobs guarantee.

With regard to the broader aspects of skills, the report that was published today contains a section on skills. Skills are something that we have addressed through working with the life sciences sector. It is one of the key pillars of the strategy that we have jointly developed with the sector through the ILG, and there has been a continued focus on increasing the skills level for life sciences entrants, as across all science, technology, engineering and mathematics—STEM—subjects and technical careers, because we see that as being fundamentally important to the future of Scotland’s economy.

The member will be well aware that, in all those skills development plans, there is a huge focus on increasing the gender balance and encouraging more female participants—and, indeed, participants from other parts of society—to be engaged in the sector. It is something that there is a great focus on, and that focus will remain as we further develop the sector.

The minister spoke with hope about the clinical trials that are being undertaken by Valneva in Livingston and the potential to supply 100 million coronavirus vaccine doses worldwide. However, also in Livingston we have the largest life sciences employer in Scotland—IQVIA Q2 Solutions—which supports clinical trials at a global level that are targeted at cancer and other diseases. What will the Scottish Government do to ensure that that job-creating and life-saving work in my constituency continues to scale up, to show global leadership and not be blown off course by Brexit or economic recession?

The member benefits from having Valneva and IQVIA in her constituency. I visited IQVIA not long ago and was impressed by the scale of its operations.

Valneva has received funding of £250,000 to support the creation of an R and D hub in Livingston, and it recently received a £925,000 responding-to-Covid grant for R and D in life sciences innovation relating to the development of a separate viral vaccine.

We are pleased to see both companies thriving, and we continue to work closely with them to support them. As the member mentioned, Brexit will have a significant impact on the sector across a range of aspects including access to skills, access to markets, regulation and co-operation with our European partners. We work hard to develop the sector, notwithstanding the negative impact that Brexit will have.

The minister highlights the ability of business to adapt and innovate at pace whenever necessary. He also highlights the investment from businesses and Governments to enable that innovation. We hope that those efforts to curtail Covid will be successful.

What consideration has the Scottish Government given to retaining that business response for this and any future eventualities while also dealing with the reduction in current response requirements and the need for businesses to reinvest and adapt to a business world that is, hopefully, without Covid?

That is a good question. Clearly, advances in life sciences technology are rapid and there are many aspects to the work that businesses do in the sector. Unfortunately, we will not run out of diseases to cure any time soon, so we will continue to work with the sector on the areas that it identifies as being a priority, to look for opportunities to bring investment and businesses with the most advanced technology to Scotland. The fact that we have such an excellent academic underpinning of that work in Scotland—some of our universities are in the top echelons globally in life sciences research and development—acts as a magnet to attract those businesses and helps them to work with us to focus on the sector and understand where the opportunities will be post-Covid.

GlaxoSmithKline employs around 330 people in North Ayrshire, where it will cease manufacture of 6-aminopenicillanic acid, which is used to produce antibiotics, resulting in a significant cost reduction but the loss of up to 50 jobs. The company believes that that will improve sustainability, fuel investment plans in R and D and boost new product launches. The minister mentioned GSK’s development of new products. Has he discussed its collaboration with Sanofi on a Covid-19 vaccine and how the Scottish Government can best work with GSK to secure its future in North Ayrshire?

I have met around 15 or 16 of the businesses that are mentioned in the report so far, and I am working my way around the rest. GSK is one of the businesses that I intend to speak to soon. As I mentioned, the life sciences sector is unfortunately not immune from the impact of Covid on the economy. Clearly, parts of the sector have a lot of work and are expanding as a consequence of the Covid pandemic, but that does not mean that all of the sector is immune. The unfortunate situation with the potential job losses at GSK is something that we will be talking to the company about in the broader context, to understand whether there is anything we can do to support the aspects of its work that would absorb those employees and, if that is not the case, to find alternative solutions through partnership action for continuing employment activity, which would look to find other opportunities for those individuals to continue their careers in the life sciences sector in Scotland.

I hope that we all share support for innovation and co-operation in the interests of public health. However, all too predictably, we see companies around the world competing to be the first to bring products to market regardless of safety. The Royal College of Pathologists has expressed concerns about the direct sale to consumers of antibody testing, and concerns have also been raised about products that do not meet an acceptable standard here and that are manufactured in countries that do not use those products themselves but export them. Will the minister give us an assurance that the Scottish Government will support the manufacture in Scotland or the export from Scotland only of products that meet a standard that would allow them to be used in Scotland?

The member will be aware that we have high standards in Scotland regarding life sciences products. That applies to both their manufacture and their use, and it is very important to us. We will continue to maintain those standards, working with businesses that apply those standards and with the sector to ensure that those high standards are maintained here, in Scotland, and internationally.

I thank the minister for his statement, and I look forward to the publication of the report. The life sciences industry is a truly global industry that is key in the fight against Covid-19. However, it is dependent on collaboration, R and D, and horizon 2020 funding, in particular. What concerns does the minister have as we fast approach a no-deal Brexit, and what impact may that have on our life sciences industry?

The member is absolutely correct—the fight against the pandemic, as the word suggests, is global, and Scottish businesses are engaged in all aspects of that activity. Members will see in the report that around half of the businesses that we identified are foreign owned and are part of larger global groups. All those businesses work across the UK and Europe, as well as globally, and that collaboration is hugely important in this effort, as it is in all efforts in the sector.

It is clear that Brexit will have a negative impact on horizon 2020 funding, which has been mentioned, as well as on research, access to skills, the transfer of skills across borders, regulatory issues and complex supply chains. We and the sector have been very concerned about that since 2016, and we continue to be concerned about it as the prospect of a no-deal Brexit continues to loom on the horizon.

I welcome the statement and share the minister’s enthusiasm for the future potential of the life sciences. I flag up to the minister the first-class work that is being carried out in my Highlands and Islands region by LifeScan and the centre for health science, and their focus on diabetes research and development.

How do we attract inward investment? How do we retain jobs? How do we upskill training and development? Will the minister join me in congratulating Highlands and Islands Enterprise on the work that it does, such as with ODx Innovations? It is crucial that its budget is maintained and indeed enhanced, and not cut.

I share David Stewart’s appreciation of the great work that Highlands and Islands Enterprise does, along with our other economic development agencies across Scotland, and I recognise the great work of LifeScan and the cluster that is developing in the Inverness area around the life sciences and medical devices. That is hugely welcome.

I have already talked about skills. They continue to be a huge focus for the sector, and we are working closely with it to execute and bring forward as many plans to upskill as possible.

A lot of work has been done on foreign direct investment over the past months. In the next few weeks, we will launch our new foreign direct investment plan to accompany our export plan, which we launched last year. I recommend it to David Stewart and other members. It clearly identifies a strategic approach and the key sectors that we want to focus on to attract inward investment and position Scotland’s assets and strengths in order to do that and continue the strength that we have in the area.

I can let David Stewart know, although it will be no secret, that the life sciences will be among the key sectors that we will focus on to attract global investment into Scotland, further strengthen the sector here, build clusters, and work with and strengthen the existing local supply chains.

I, too, welcome the minister’s statement. The life sciences are among the highest multipliers in the economy and they produce many more jobs and sources of wealth creation outwith the sector as well as in it. A very good example of that is ILC Therapeutics in BioCity in my constituency. It is engaged in immunotherapy, which is a hugely growing area for the life sciences.

I draw the minister’s attention to the huge potential in the expansion of animal life sciences. As we will discuss agriculture this afternoon, it is particularly relevant that we consider the two together and look at the huge benefits that would accrue for Scotland from substantially increased investment in animal life sciences as well as in human life sciences.

Alex Neil is fortunate to have BioCity in his constituency. ILC Therapeutics is one of the businesses there, and others that are based in BioCity are mentioned in the report. I have had the pleasure of visiting BioCity twice, I think, in my tenure as the minister responsible for the life sciences.

Alex Neil is absolutely correct: the life sciences sector in Scotland is broad. It covers a number of areas including testing and vaccine development, which we have talked about; therapeutics; medical devices, which were mentioned with regard to Inverness; and the animal, aquaculture and agriculture—or triple A—aspects, which are very important to the sector. We all know many examples of innovation in that subsector, and it is very much part of the focus as we move forward to continue to build and grow the sector and its roots in Scotland.

The minister has acknowledged the valuable work of the Glasgow-based Tissue Solutions partnership with the Cambridge blood and stem cell biobank, which has been working to contribute to the development of a vaccine and potential treatments. However, despite providing in the region of 1,400 blood samples over the past few months, the partnership has been unable to access the necessary material from Scottish biorepositories. I understand from Tissue Solutions that the minister is now working to enable access to Scottish biorepositories, but why has the process taken so long when the impacts of such access from the start could have led to potentially life-saving efficiency?

The vaccine development and supply chain is complicated and it has been further complicated by the impact of Covid on some of the operations. I am aware of Tissue Solutions and I undertake to look into the member’s specific concern to understand whether there is anything else that I can do as minister to help to accelerate action on this particular challenge. However, he can rest assured that we are hugely focused on making the process as efficient and speedy as possible as we move forward on a great many fronts, as I have highlighted, to try to find solutions, vaccines and cures for the current Covid situation.

The minister touched on some of the collaboration between industry and academia that is part and parcel of the response to Covid-19. Does he agree that having five Scottish universities in the top 20 for biological sciences, as graded by the good university guide, is testament to the strength of the Scottish life sciences sector?

Yes. I mentioned that the triple helix—the co-operation between industry, the NHS and the universities in Scotland—is absolutely fundamental to the sector’s success, and we see it as underpinning how we go forward. I will name check the five universities: they are Dundee, St Andrews, Strathclyde, Glasgow and Edinburgh. Dundee, which comes in at number 3 in the table, is a global leader in drug discovery, so it is particularly to be commended for the great work that it has done over many years in the life sciences sector.

It is also worth highlighting that Dundee and Edinburgh universities are both involved in the €77 million pan-European corona accelerated R and D in Europe—or CARE—consortium, which is seeking to accelerate the development of therapies for Covid-19 and future coronaviruses. We are hugely focused on that. We recognise the importance of universities to the work in the sector and we will continue to co-operate with them to move forward with the work.

It is good that the minister has highlighted the importance of the work of Scotland’s universities. What discussions has he had with the Cabinet Secretary for Finance to ensure that the vital funding is in place so that that collaboration can continue?

The member will be aware that we are in the middle of budget processes, and those discussions are continuing. He can rest assured that I am making every effort to explain the importance of the sector and many other high-technology sectors in Scotland to ensure that they and the university work that underpins them receive support, because these sectors are the future and they are where we need to be focusing our resource. Of course, this is all part of a bigger picture, and the finance secretary and the Cabinet will take their decisions on the allocation of funds in due course.

That concludes questions on the minister’s statement, and we will shortly move on to the next item of business.