UK life sciences experiencing growth ‘not previously seen this century’

By Ben Hargreaves contact

- Last updated on GMT

(Image: Getty/Harvepino)
(Image: Getty/Harvepino)

Related tags: Startups, Biotech companies, Uk, London, AI

The number of UK startups and the amount of investment has taken off in the last five years, suggests BioCity analysis.

With a growing funding base supporting the UK life science ecosystem, there have been an increase in the number of start ups in the UK by almost 50%, BioCity, a UK-based business incubator, stated in its recent report​.

This number correlates with a significant increase in investment into life science startups, as investment has increased four-fold, to approximately £2.8bn ($3.6bn), in the same time period (2014-2018, compared to 2012-2016).

The report authors emphasized, “Over the past five years the life science industry has experienced a period of growth not previously seen this century.”

The growth in the number of life science startups is, predictably, being driven by London, which possesses the highest amount compared to the wider regional areas of the UK.

However, the report notes that despite London being the leader in the space at present, it has taken some time to establish itself in this position – having previously been ranked as the fourth leading region for startups during the period 2006-2010.

BioCity suggested that this is likely due to the level of research produced in the city, which has given rise to a number of therapeutics-focused companies. As such ventures require high levels of capital, it is beneficial for biotechs based in London to be close to where leading investors are also located.

Pointing towards potential for future growth, the report identifies development plans around King’s Cross, White City, and London Bridge/Waterloo as providing greater levels of laboratory space – previously a barrier to the growth of such companies in the city.

Beyond London, startups are concentrated in the East, South East, North West, and Scotland.

Of these, the North West is the fastest developing region, with a growth in the number of companies exceeding 50%. In part, this is due to the presence of Alderley Park, which houses a number of startups and established companies​. In addition, the major cities of Liverpool and Manchester also add their own startups to the overall figure.

Aiding ailing R&D

Of all the areas that the startups are working within, the application of AI to the drug discovery and development process was the most highly represented, with 23% of all businesses in this area. The report notes that this is due to the low cost, as no lab space is required, as well as the opportunity for such companies as pharma companies attempt to make drug discovery more efficient.

Not only are startups looking to confront a serious issue facing the industry, in the cost and difficulty of drug discovery, but many are starting up to capitalize on larger companies downsizing their own capacity in this space.

The report describes that the North West of the UK has become a hub for contract research organizations (CROs), in part due to AstraZeneca’s exit from Alderley Park​.

As a result, CROs are formed as the discovery and developments teams from the larger companies set up their own independent startups. Of all the CROs based in the UK, 20% are found in Alderley Park.

University research power

As could be expected, Oxford and Cambridge are responsible for the greatest number of spin-out companies, boosted by the setting up of region-specific investing businesses, such as Oxford Sciences Innovation and Cambridge Innovation Capital.

The report grouped universities into calculated ‘research power’ and noted the correlation of the number of spin outs. Oxford and Cambridge were in first and second position, followed by Imperial College London and University College London (UCL).

However, the report noted that UCL underperformed against its research power, suggesting further room for growth once the ‘right environment’ had been achieved. The right environment could include anything from university commercialization strategy to access to capital.

Related topics: Markets & Regulations, Pipelines

Related news

Show more

Follow us

Products

View more

Webinars