The UK government budget delivered in the gloom of the recession has provided good news for the industry, according to its leaders.
The ABPI has welcomed a promise to consult businesses on changes to the UK tax system that look to nurture innovative industries like pharma, which rely on intellectual property.
Dr Richard Barker, director-general of the ABPI, said the news showed strong government commitment to the sector, and could have a "significant impact on how companies make their investment decisions".
He said the consultation built on the recent move to set up the new Office of Life Sciences (OLS) – aimed at improving access to finance for small and medium-sized businesses, and stimulate investment in the industry.
Barker added: "We welcome Government's resolve to create winning strategies for key industrial sectors, with life sciences being one of these. Work continues with the OLS to address other dimensions of the UK's competitiveness in this key knowledge-based sector. The ABPI will play a full part in the consultation announced today."
The BioIndustry Association (BIA) also welcomed the news. Its chairman Clive Dix said the sector was encouraged to see support in challenging times.
He added: "The BIA has been working alongside the OLS to develop a number of initiatives including an innovation fund, and changes to the taxation of intellectual property. The small and medium sized companies that make up the bioscience sector in the UK have been hit hard by the current financial crisis."
The government is to conduct the new consultation and deliver its assessment on tax changes before the Pre-Budget Report in November 2009.
Within the budget, chancellor Alistair Darling also announced the introduction of a £750 million Strategic Investment Fund for emerging technologies, including biotech.
He said it is designed to "promote research and development and harness commercially our world-class science base".
This could go some way to answer industry calls for funding. The BIA requested £10m state investment after it conducted a survey in March on the financing of the life sciences industry, analysing results from 295 companies and finding 76% had severe difficulties in raising equity finance over the last 12 months.
The BIA agreed the new £750m Strategic Investment Fund could make a significant contribution to building a sustainable bioscience sector in the UK, but details as to how much will go to the biotech are yet to be thrashed out.
The BIA said it is seeking further information on the mechanism for the fund and the amount accessible to biotech companies.
Dix added: "We have highlighted the need for a high-tech investment fund. The BIA will be reviewing the fund detail, including the mechanism and the amount accessible to bioscience, to ensure companies in our sector are swiftly able to benefit. It is essential that the fund is now implemented rapidly."