Boost in UK biotech investment shows growth opportunity for new government

London, UK – Monday 12 August 2024 – The UK’s innovative life sciences and biotech sector enjoyed its best quarter for investment since the pandemic, according to new data published by the UK  BioIndustry Association (BIA) today.

The boosted investment means the sector has already surpassed the total amount raised in 2023. The sector raised £1.98 billion in Q1 and Q2 2024, beating the £1.80 billion raised last year.

The data has been submitted to the Ara Darzi review of the NHS for the Department of Health and Social Care, showing that UK life science is well set to be a core pillar of the UK's future economic growth if the NHS works with the industry.

Steve Bates OBE, CEO of the BIA, commented:

Wes Streeting as the new Health Secretary has said that he 'will make Britain a powerhouse for life sciences and medical technology.' Our data shows that over the last six months, the UK biotech sector has demonstrated increased investor interest and confidence, marked by significant public financing and a notable rise in venture capital funding driven by several large deals.Ara Darzi’s diagnosis of the challenges and opportunities for the NHS can now include an evidence base that shows if the NHS works hand in hand with life sciences research institutions and medical technology companies, the new government can drive the development of new treatments and help grow the industries of the future, crowding in private capital to develop world leading products and services.

Key findings:

• Venture capital funding: The second quarter of 2024 witnessed a 135% increase in venture capital funding, raising £564 million compared to £240 million in Q1. This represents the highest quarterly funding since Q3 2021 and stands in marked contrast to the global decline in venture capital funding for biotech witnessed in Q1 2023.
• Public financing: Public financing raised £577 million in Q2 2024, evidence of a strong investment environment.
• IPO market: The IPO market remained inactive, with no IPOs recorded in the first half of 2024, reflecting a cautious approach towards new market launches. This is a continuation of a challenging environment for European IPOs witnessed in 2023. 

Venture capital breakdown:

• Total raised: £564 million across 38 deals.
• Average deal size: £15 million per deal.
• Seed deals: 15 deals completed, nearly matching the total for the entire 2023 (28 deals).
• Notable deals: Pheon Therapeutics secured £94 million in Series B funding; Amber Therapeutics raised £79 million.

International comparisons:

• Global VC funding: The US led with £4.8 billion, while Europe raised £1.1 billion. Asian companies saw a significant reduction in fundraising activity, down 76%.
• International IPOs: The US recorded six IPOs raising £974 million. Europe had one IPO, Cinclus Pharma in Sweden, raising £53 million.

Martin Turner, Associate Director of Policy, Public Affairs and Investor Relations at the BIA, commented: 

“This quarter has marked a significant step forward for UK biotech. Public and private biotech companies secured large rounds from global investors, demonstrating the world-leading capability of UK science and our business leaders. The increase in seed investments in new companies also shows great confidence in UK innovation. However, these deals represent many months or even years of effort from companies. This boost is fragile given continued instability in stock markets.

“Our sector's performance can be further bolstered by the new Labour government's growth mission that has focused on unlocking new sources of capital from British pension funds to grow our venture capital ecosystem. If correctly focused on industries of the future, like life sciences, this initiative will create a fertile environment for innovation and job creation.”

Notes to editors

• Please contact Albert Maguire-King on 07874617351 or [email protected] for more information.
• The full report can be found at https://biotechfinance.org

·       The Secretary of State has appointed Professor Ara Darzi, Baron Darzi of Denham, to lead the investigation, which will report in September 2024.

·       Lord Darzi has launched an open analytical channel to gather data, intelligence and analysis to inform his independent investigation into the performance of the health service in England.

• About the BioIndustry Association (BIA)

The BioIndustry Association (BIA) is the voice of the innovative life sciences and biotech industry, enabling and connecting the UK ecosystem so that businesses can start, grow, and deliver world-changing innovation.