The UK’s biotech sector is bringing in more venture capital than its European peers, and holding its own against the US as VCs vote with their wallets.
A recent report from the British Bioindustry Association (BIA) and research firm Evaluate revealed that UK biotech attracts more long term financing than US peers, to the tune of over £2.4 billion in a decade.
The UK outperformed other European countries, raising £923.7 million in initial public offerings (IPOs) and $2.4 billion (£1.54 billion) in venture capital funding.
During 2014, nine companies listed, raising a total of £408 million - almost half the total IPO haul during the decade.
One notable flotation includes Oxford-based Circassia, which made history as London’s largest pharma IPO for decades when it raised £220 million to develop anti-allergy drugs in March last year. Horizon biotechnology, based in Cambridge has also been noted for its impressive growth, cited in Deloitte's top growing tech firms.
UK venture capital financing also improved in 2014, jumping 71 percent from the previous year to $430m, with Venture Capital firms doing fewer, bigger rounds at an earlier stage.
Coincidentally, seed funding of early stage companies by venture capital has fallen dramatically and highlights the need for alternative funding and the return of specialist investors willing to take a more long-term view of the industry, the report found.
“The uplift of investment into the UK is fantastic news for the life sciences market, and 2014 in particularly, was an extraordinary year,” said Lisa Urquhart, report author and Editor of EP Vantage, the editorial arm of Evaluate. “However, these recent gains have been hard won. As we enter the second half of 2015, it will be interesting to see if any indicators of the future direction of the UK sector can be spotted. What is obvious, is that if we are to maintain this momentum, we need to see a big jump in seed funding - crucial to grow and retain UK innovation.”
Steve Bates, CEO of the BIA, said: “It is clear that the UK biotech funding ecosystem has learnt lessons from its history and is doing things differently this time around. We are seeing the development of different forms of investment for innovative UK companies. In contrast to the more generalist US investors, the UK’s specialist investors understand the need for patience, restocking funds while capital is plentiful, giving well-backed UK companies more financial runway to succeed.”