Visit to England: What Did We Learn? 
Posted by Carlos on Apr 04, 2017

We just returned from a brief trip to England, where we met with a client, plus a few friends and colleagues. Over several meetings and meals, three issues consistently came up during conversation: Terrorism, Brexit and Trump.

Terrorism – The United Kingdom is no stranger to terrorism, as this lengthy list of terrorist attacks in London illustrates. The unpredictability of terrorism has briefly jangled some nerves, but their “Keep calm and carry on” mentality will prevail. 

Any reports of the country “shutting down” are simply nonsense. 

Brexit – When the term “Brexit” began to appear in the news last year, it was initially difficult to understand what it precisely meant. What does “Leave Europe” actually mean? How can you “leave” a continent? And, why would anyone voluntarily leave in the first place? And, how will Scotland, Ireland, and Wales react?

Now that Article 50 was triggered, the race is on for the UK to conclude negotiations with the EU.  It is clear from the many articles being published that forecasting what will happen is difficult. Some changes will affect certain industries differently than others, as is discussed here

The life sciences will not be immune to the effects of Brexit, whatever they will be. A few items which may be impacted include:

> Terms, Conditions, and Tariffs imposed on the exports of products from the UK to the EU

> Movement of agencies and companies out of the UK, especially the EMA

> Funding from the EU to UK researchers and companies

> Flow of scientific, management, and other talent from the EU to the UK

The UK has successfully leveraged its historical strengths in the pharmaceutical industry, as evidenced by the very active start up scene, active venture capital community, and friendly public markets and exchanges. 

Indeed, the industry raised nearly £1 billion on the London Stock Exchange alone in 2015, and an additional £600 million on the AIM. How much of this will be at risk in the coming years is unknown…and it is the uncertainty of it all which is ultimately causing some folks to be worried. Indeed, there are scattered reports that VCs are beginning to focus more on investments in the EU and less in the UK.

Trump – While many of us were enjoying ourselves at BIO Europe in Cologne last November, Donald Trump was (somehow) elected President of the United States. 

Today, President Trump is a reality we are all still trying to understand. 

From our admittedly limited sample size, the uncertainty associated with a Trump presidency is perhaps the biggest concern expressed. For example:

> Will the close relationship between the USA and UK continue? 

> How will Brexit affect this relationship? 

> Will the USA make enemies with countries (China?) and expect the UK to provide support? 

> How will environmental policy change? 

> Will “America First” mean increased tariffs for UK goods and services? 

> What will US-UK trade look like moving forward? 

Conclusion

Our conclusion is that there is no conclusion…yet. 

It is simply to early to say how Brexit and Trump will affect our industry. What we can say is that we are, now more than ever, dependent on finding and understanding unbiased information and insight. 

Only then can we think through how these issues will impact our near-term and longer-term businesses.

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