OF ALL the sectors identified by the Scottish Government as a key industry that deserves special support, life sciences arguably represented the most challenging.
It is a high-risk environment that produces an above-average range of failures. As such, it has proved a difficult arena in which to attract outside investment and to convince those who do inject finance that they may one day see a return.
Not surprisingly, as Scottish Enterprise led efforts to build a cluster of companies, there were those who thought it an over-ambitious strategy and as public markets dried up they appeared to be vindicated. Companies were acquired or fell by the wayside.
There does seem to be something of a sea-change going on. The Edinburgh BioQuarter, which was identified by Scottish Enterprise as its next big hope, is among the key sites that are now attracting investment and tenants.
There remains some frustration that the pension funds and other institutional money managers shy away from the sector as being too high-risk and too long-term, but much of the improved environment is down to a greater enthusiasm for the sector from the venture capital community and business angels. Academics are becoming less wary of the commercial world and showing a greater interest in creating companies around their research.
The sector now requires the development of a food chain of supporting businesses and the creation of companies of scale. Many of them remain micro-businesses employing two or three people and, as we reported yesterday, the challenge for the economy is to move companies from small- to medium- and hopefully larger-scale enterprises.
It is a tall order that will require more funding and the creation of the environment required for these businesses to prosper.
But First Minister Alex Salmond was yesterday shown the facilities on offer at the BioQuarter, which – together with BioCity in Lanarkshire – represents a statement that Scotland is making some progress.
BP turning the corner as it prepares for trial
IN ANY other circumstances the fall in profits at BP might have been a worry. Against a backcloth of troubles in the Gulf of Mexico and Russia it is fair to say the company looks in reasonable health.
The results were, in fact, ahead of expectations, with production broadly flat on an underlying basis and in line with the company’s guidance.
It is seen to be a more focused operation well-placed to benefit from a strong exploration and production programme.
Excluding the sale of its interest in the TNK-BP joint venture to the Russian group Rosneft, BP has now agreed divestments worth $37.8 billion (£24bn) since 2010 to help pay the bill for the Deepwater Horizon disaster, effectively achieving its $38bn target a year earlier than planned.
With the full-year results out of the way, attention will now switch to the trial due to begin at the end of the month.
There remains huge uncertainty around the total amount that BP will have to pay in civil claims and this will be influenced by the verdict on gross negligence charges.
The hearing will affect sentiment and the shares, though there are positive signs that BP can reach a settlement with the federal and state authorities before it starts.