According to the latest research from the UK Bioindustry Association (BIA) and EY, 2014 was the best year to date for investment in the UK bioscience sector, underpinned by government support in early stage life science R&D.
UK bioscience raised £1.2 billion in innovation capital in 2014, defined as equity capital raised by firms with annual revenues under £304 million, up 143% on 2013. The gap between the UK and its European competitors has also increased with a strong showing in venture capital investments, contributing £360 million to the £1.2 billion total.
Building the Third Global Cluster: State of the Nation 2015 highlights the important role that the Biomedical Catalyst (BMC) plays in filling a crucial structural gap in early stage funding and makes clear that government support must be maintained in the spending review statement on November 25 if these levels of private sector investment are to continue.
The UK now represents nearly a third (31%) of all innovation capital raised in Europe. This year’s report also shows that the historical characteristic of drip feed private financing is no longer constraining the UK industry, with larger round sizes for venture capital investments and US-like commitment to the most promising technologies.
The report was launched at the BIA’s UK Bioscience Forum, part of European Biotech week, which showcased 10 themes for change in the sector. Speakers included Life Sciences Minister, George Freeman, MP, Innovate UK Chief Executive, Ruth McKernan, and author of the Catapult Review, Herman Hauser.
- UK total innovation capital raised £1.2 billion from 86 financing rounds – up 143% on 2013 where £498 million was raised from 64 rounds
- the gap between the UK and its European competitors has increased with a strong showing in venture capital investments, which contributed £360 million to the £1.2 billion total
- the UK now represents 31% of all innovation capital raised in Europe (almost a third)
- Europe experienced its best financing year ever with total innovation capital raised of £3,920 million, up 77% on 2013
- 2014 has seen larger average round sizes with totals for the five largest venture capital rounds in 2014 being more than three times the amount for the top five in 2013
- although UK venture financing is close to matching San Diego’s levels, there is a near three-fold disparity in total capital raised, all in the public markets.
Steve Bates, Chief Executive Officer of the BIA, said: “The UK bioscience ecosystem is thriving; we have a strong and supportive fiscal environment, with new patient capital pools and open public markets, we produce investable science and have effective translation capability. With this strong base in place, we have the potential to not only sustain our momentum but to go much further, and build the third global cluster, alongside the current US leaders. ”
He continued: “However, our industry can only remain competitive with our US and European counterparts with continued investment from the government. Any decision by the Chancellor to cut government support to proven innovation policy measures, such as the Biomedical Catalyst, could halt economic growth in UK bioscience and more importantly prevent it creating wide-ranging health benefits and solutions to some of the key challenges of our time.”
Ian Oliver, Executive Director of Assurance at EY: “The level of activity we have seen in 2013/14 is unlikely to grow indefinitely; however, new records have been set this year with Immunocore’s raise of £205 million becoming the largest European private round in history, demonstrating new levels of confidence in UK science. The nurturing of early stage companies is still critical to the overall biotech ecosystem, allowing promising companies to reach critical mass and garner venture investment at these new levels.”