The UK’s innovative life sciences and biotech sector showed resilience in 2023, securing £1.8 billion in equity investment despite a challenging global economic climate, according to the latest report by the UK BioIndustry Association (BIA). London-quoted biotechs also continue to outperform UK and US markets over the long term, having made substantial gains during the pandemic that have not been lost.
Key findings of the report:
- UK biotechs secured £1.8 billion in equity financings, down only 9% from 2022.
- UK retains top spot in Europe receiving 41% of total venture capital invested into biotechs across the region.
- £1.25 billion was raised in venture capital, a 6% decrease year-on-year.
- The collective share price of London-quoted UK biotechs is up approximately 350% compared to pre-pandemic levels, showing the sector delivers long-term returns for investors.
- There were no new market launches due to continued low valuations and investor appetite, however, two European listings on Nasdaq signals a gradual recovery
- Major licensing and M&A deals demonstrate the ongoing quality and attractiveness of UK science.
- The UK takes the lead in Europe with the highest number of clinical-stage companies.
Steve Bates OBE, CEO of the BIA, said:
“The UK life sciences sector has had some incredible successes and impacts over the past five years. Record levels of investment, stock market highs and a COVID vaccine that has saved millions of lives around the world.
“Although 2023 was a tough year for companies across sectors, including the global biotech industry, the UK sector showed remarkable resilience and investment, and stock market performance continues to outpace pre-pandemic levels.
“£1.8 billion in investment plus billions more in licensing and M&A deals highlights the strength of our science, the talent of our entrepreneurs, and the growing interest in innovative life sciences technologies.
“With the global inflation easing, there is hope for a gradual recovery in the public markets in 2024, which will lead to an improved venture environment. The UK's strong science, coupled with meaningful policy progress aimed at unlocking new pension fund capital, positions the sector well for continued growth in the year to come.”
Some of the key trends the report notes include:
- Foreign investors participated in 40% of all UK biotech venture deals, demonstrating the sector's global appeal. Seed-stage companies enjoyed the strongest domestic support, while international investor support was more prominent in later-stage deals.
- US investors are the second most active venture investors in the UK behind domestic investors, but their participation fluctuates year to year more than European investors.
- French VC manager Sofinnova is the joint most active venture investor alongside the UK’s Meltwind Advisory and o2h Ventures.
