Britain’s fastest-growing privately-owned pharma companies revealed

The fourth annual Alantra Pharma Fast 50 Index reveals British companies delivering double-digit sales growth despite political and economic volatility

17 March 2020:  Britain’s 50 fastest-growing privately-owned pharmaceutical and pharma services companies continue to enjoy high levels of growth despite the political and economic volatility that has characterised the past 12 months. These innovative, entrepreneurial businesses have successfully addressed some of the key challenges for the industry; unlocking improvement and acceleration in drug discovery, development, manufacturing and commercialisation to provide cost effective and practical healthcare solutions globally.  As a result, the average business in this year’s ranking has seen its revenues grow at an annualised rate of 26% over the past two years, while the leading businesses have achieved growth rates of almost three times that figure. 

This year’s Alantra Pharma Fast 50, an annual index of the pharmaceutical sector’s most dynamic companies, reveals that each of the top seven most highly ranked businesses have achieved revenue growth of more than 50% over the past two years. The growth is spread across the sector with at least three businesses delivering more than 40% in each of the three distinct sub-sectors covered by the ranking – consulting, pharma outsourcing, and development, wholesale and supply (DWS).

SciBite, a business that offers natural language processing tools to big pharma, is this year’s top performer racking up annualised growth of 76% over the past two years. Launched just five years ago in Cambridge by founder Lee Harland, former head of the information engineering group at Pfizer, the company is now achieving sales in excess of £4m.

Alantra made the following observations about the fast-growing segments and growth drivers highlighted in the Pharma Fast 50 Index:

• The rise of the CRO: According to Alantra, big pharma’s response to the febrile economic and political climate has been to reduce exposure to risk. Last year saw a series of mega mergers, with scale regarded as essential to reduce cost and build product portfolio diversification. At the same time, the withdrawal of big pharma from high-risk drug development activity has continued, with firms instead developing their product pipelines in emerging therapies via acquisition or outsourcing to contract research organisations (CROs).  Their continued rise is highlighted by the Pharma Fast 50 which this year includes a significant number of CROs operating at the pre-clinical stage, servicing clients such as “virtual biotechs”.

• Technological innovation: The fastest-growing business in the Pharma Fast 50, SciBite, generated two-year CAGR of 76%; its value proposition centred on natural language processing tools that enable big pharma to unlock the potential of an asset they already have by identifying hidden insight in their data. Additional tech-enabled businesses also feature in this year’s ranking, including specialists in artificial intelligence, machine learning and data analytics. All offer the pharma sector access to new tools that could provide a shortcut to better outcomes, both for the bottom line and for patients.

• Growing pressure to make the case for new therapies: Medical communications consultants are well-represented in this year’s Pharma Fast 50, reflecting the pressure on the sector to articulate the case for new therapies with greater sophistication. In an era of payer austerity and fiscal discipline, drug developers are compelled to prove the economic case for new therapies and build a market with healthcare practitioners.

• Filling gaps in the market: The DWS sector is also well represented in the Index with companies stepping up their innovation in order to fill gaps in the market. From specialty pharma to supply chain technologies, these businesses are able to operate in areas where the industry’s largest players have left a vacuum.

Tom Cowap, a Director in Alantra’s UK advisory business who specialises in the pharmaceuticals sector, said: “Despite tough headwinds, the pharmaceutical industry continues to prove its robustness and resilience. The outstanding businesses in this year’s Alantra Pharma Fast 50 have achieved remarkable rates of growth and we are proud to highlight their success.”

Cowap added: “The growth delivered by Fast 50 companies reflect the many ways in which fleet-of-foot, entrepreneurial businesses in the UK are adapting to this environment. These are businesses led by management teams ready to leverage their experience and expertise in order to embrace the opportunities created by cost-consciousness and risk aversion.”

Alantra points to the broader impact of this success on the pharmaceutical sector, with privately owned UK pharma businesses now attracting investment at a heightened rate. The willingness of trade buyers to do deals is also evident with several previous Pharma Fast 50 companies accepting strategic bids over the past 12 months.

Alantra’s Tom Cowap said: “While traditionally nervous about investing in specialist pharma businesses, the private equity industry is now increasing its involvement in the sector.  Healthcare focused funds have been active over the past year, and the capital and broader support that they bring is enabling a number of businesses to accelerate their growth.”

He added: “Given the growth achieved by leading privately-owned pharma companies in the UK and the changing model of big pharma, consolidation and investment is likely to continue during 2020 and beyond. Many of the businesses in this year’s Alantra Pharma Fast 50 have already received approaches from suitors.”

The Alantra Pharma Fast 50 ranks the UK’s fastest-growing, privately-owned pharmaceutical businesses according to their revenue growth over the past two years (the businesses must have reported revenues of more than £1m in the first year of assessment to be included). It includes analysis of businesses grouped into three distinct sub-sectors – Consulting; Pharma outsourcing; and Development, wholesale and supply (DWS).

This year’s highest rankers are:

• Overall: SciBite
• Consulting: Prime Global
• Pharma outsourcing: BioAscent
• Development, wholesale and supply: Morningside Healthcare

This is the fourth successive year that Alantra has published its Pharma Fast 50 Index.