UK biotech industry experiences record £2.2bn backing

By Ben Hargreaves contact

- Last updated on GMT

(Image: Getty/Alfexe)
(Image: Getty/Alfexe)

Related tags: Uk, Biotech companies, Venture capital, Cell and gene therapy catapult, BIA

The UK biotech industry saw an 85% boost on funds raised in 2017, according to a report published by the BIA.

The £2.2bn ($2.8bn) raised across the UK biotech industry arrived after growth in financing from venture capital firms (+116%), initial public offerings (+84%), and secondary fundings (+45%).

This means that 2018 represents the largest year for fund raising by UK biotechs since the BioIndustry Association (BIA) began covering financial developments across the industry in 2013.

In terms of its position within Europe for raising venture capital, 2018 shows that the UK has a much larger presence than the next country and accounts for a significant portion of total capital raised. UK biotech raised £1.1bn of a total European-wide figure of £2.6bn, with Germany the next largest contributor with approximately £300m raised through venture capital.

Steve Bates, CEO of the BIA, stated: “The UK life sciences sector has attracted an incredible £2.2bn investment in the past 12 months. It shows the government’s industrial strategy is paying dividends as global investors flock to invest in UK innovation, jobs and growth in life sciences.”

UK government investment

The UK government has invested significantly in the cell and gene manufacturing space​, as the number of UK biotechs developing such treatments increases.

Keith Thompson, CEO of the UK Cell and Gene Therapy Catapult, a UK government initiative, told us that this had created an infrastructure that was ‘second to none’. In terms of the number of companies operating in the UK, he outlined that it had ballooned from a ‘handful’ to approximately 70 in 2018.

Brexit

The expansion of the sector is happening whilst operating under the cloud of uncertainty surrounding the UK’s exit from the European Union.

Due to the ongoing difficulties with negotiations making a ‘hard Brexit’ look more likely, the pharma industry has called for medicines to be prioritised​ and is taking measures to prepare for disruptions to supply.

Julie Simmonds, executive director of equity research at Panmure Gordon, cautioned that the end of 2018 saw a slowdown in investor confidence.

However, Simmonds noted, “The UK market now offers value opportunities across the market cap range and we expect interest to return as the healthcare sector demonstrates long term resilience across cycles.”

Related topics: Markets & Regulations

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