UK biotech attracted a record-breaking £2.2bn in investment last year, with UK firm’s claiming 40% of the venture capital funding that went to the sector across Europe, according to a BioIndustry Association (BIA) report.
The £2.2bn tally is around £1bn more than the amount raised in 2017 and included £1.1bn in venture funding with deals tending to be larger than in previous years, according to BIA chief executive Steve Bates, who said the data “shows global investors see this value and want to be part of the UK’s exciting and fast-growing biotech opportunity”.
One clear trend in the 2018 report is that biotechs are staying private for longer, as witneded by the larger number of later-stage rounds. There were just five initial public offering (IPOs) in the year, raising £432m, with another £658m coming from follow-on public financings, including a £273m round from GW Pharma. 2018’s UK IPOs came from Orchard Therapeutics, Autolus, Sensyne Health, Acacia Pharma and Renalytix AI.
Bates said that other trends included a diversification in the UK life science industry, for example with the emergence of new business models in areas such as artificial intelligence, as well as more money becoming available from overseas including from US and Chinese investment groups.
“Growing from the UK to IPO later on NASDAQ [has become] a recognised, understood and well-trodden path,” according to Bates (pictured below). The picture isn’t all rosy, however, as the BIA acknowledges that at the moment the London Stock Exchange’s AIM “doesn’t have the depth of drug discovery companies to enable a vibrant market.”
Another notable trend was that UK companies were as much the acquirer as the acquired when it came to M&A, despite the low pound making UK companies cheaper for overseas purchasers. There were eight acquisitions by UK-domiciled companies in the year, compared to seven involving overseas (US, Chinese and Japanese) firms.
“The UK biotech ecosystem is a key engine of innovation that is delivering jobs, economic growth and most importantly, life-changing new treatments for patients,” said Bates.
“Investor confidence is a direct reflection of the commitment the government has made to the sector throughout 2018 and in previous years. We must keep this momentum going if we are to continue to attract global money into our young and scaling companies.”