The UK life sciences sector has seen a substantial drop in international investment, according to a new report published by the UK government.
The latest Life Sciences Competitiveness Indicators report has revealed that the estimated value of inward life sciences foreign direct investment fell from £1.9bn in 2021 to £1bn in 2022.
This drop resulted in the UK falling to ninth out of 18 comparator countries in 2022, down from second in 2021, with key beneficiary countries including Ireland, India, Singapore, and Belgium.
The report also found that the UK saw a significant decline in equity finance raised, falling from £7.2bn in 2021 to £3.3bn in 2022.
Substantial drops were recorded in both the number of initial public offerings (IPOs), and the associated amount raised. In 2022, the UK had £7.1m raised through three IPOs, compared to £751.5m raised through 11 IPOs in 2021.
According to the Association of the British Pharmaceutical Industry (ABPI), the collapse in investment comes as the clawback rates manufacturers of branded medicines must pay on their UK revenues rose from 15% in 2022 to 26.5% in 2023.
The association has previously warned that if the UK is unable to address rapidly escalating rates in future years and return repayment rates to “historical norms”, it will increasingly see investment, jobs, and research partnerships go to other, more supportive markets.
Richard Torbett, the ABPI’s chief executive, said: “When international markets turn away from you, it can be tough to turn things around. The industry has repeatedly warned that unless the UK addresses the excessive and internationally uncompetitive rebate rates, it cannot expect companies and investors to base themselves here.
“The UK continues to have all the hallmarks of a global life science leader, and ministers are right to single out the industry’s potential to drive UK economic growth, but talk can only get you so far. We need to fix the commercial environment and make the UK a genuinely attractive investment prospect.”
The report comes just a month after the medicines manufacturing alliance argued that if the UK is to realise its “life sciences superpower” ambition, it must not only discover and develop new medicines but also manufacture a significant share of them too.
Brian Henry, chair of the Medicines Manufacturing Industry Partnership, said at the time of publication: “A sustained effort is needed to capitalise on the UK’s traditional strength in early-stage science and translate it into medicines manufacturing success – with all the jobs, investment and long-term growth that comes with it.”