Investment in UK biotech jumps 60% to £4.5bn in 2021

Investment in UK biotech jumps 60% to £4.5bn in 2021

New data from the BioIndustry Association (BIA) and Clarivate shows 2021 was the highest year on record for investments into UK biotech and life sciences companies. £4.5bn was raised in public and private financings, £1.7 billon (60%) more than in 2020.

Breakdown of investments from 1 December 2020 to 30 November 2021 include:

• Venture capital financings totalled £2,518 million, an increase of 81% from 2020
• Initial Public Offerings (IPOs) totalled £1,304 million, an increase of 434% from 2020
• Other public financings raised £684 million

Although venture capital made up a greater proportion of the total raised, it is the number and scale of IPOs that mark out the year as distinctly different to what the UK has seen before, with a remarkable increase from the £244 million raised in 2020. Listings of UK companies on markets on both sides of the Atlantic suggest an ecosystem reaching maturity, and the record-breaking levels of venture investment shows a strong pipeline of companies coming through.

Notable company investments include:  

• Oxford Nanopore topped UK Venture deals for the second year running with a £195 million fundraise prior to their £350 million London IPO, which was the largest amount raised in a listing on the London Stock Exchange by a biotech company.
• Vaccitech, the Oxford University spin-out commercialising the technology platform behind the Oxford/AstraZeneca COVID-19 vaccine, also raised a large series B round of £118m prior to their IPO on NASDAQ.
• Exscientia capitalised on the well-placed hopes of AI-driven drug discovery to secure the fourth largest private fundraise ever recorded by the BIA, with a £158m Series D round.

Steve Bates OBE, Chief Executive of the BIA, said: “The UK is a global hub for life sciences, with a world leading academic base, global pharmaceutical players, an increasing manufacturing footprint and a thriving pipeline of innovative SMEs and entrepreneurs.

“There is an obvious gap that we must plug in the UK’s financing environment. The large fundraises seen in 2021 are largely the result of welcome overseas investment, meaning that significant value creation will also be offshored. History has handed the UK two world-leading sectors: life sciences and finance. A symbiosis should exist between these two, but it doesn’t, yet. There is great opportunity to turbo-charge the UK’s biotech and life sciences sector and capture more of its economic value for the UK by building better connections between the UK’s financial institutions and our innovative scaling businesses.”

George Freeman MP, Minister for Science, Research and Innovation said: “The UK life science sector has led the world during the pandemic; from sequencing the virus genome to developing the first diagnostics, vaccine, and antivirals; setting up the world’s biggest and fastest ever clinical trial, and now this record-breaking level of investment.

"We value the significant investment that comes from overseas, but we must complement it with the full financial firepower of the City of London so that more companies stay in the UK.

“This is why our ambitious 2021 Life Sciences Vision sets out our firm commitment to helping UK life sciences and biotech firms access long-term scale-up capital from investors here at home, who are committed to building successful companies. Scaling up UK companies will help both grow our economy and improve access to innovative diagnostics and treatments.”

Mike Ward, Global Head of Thought Leadership, Life Sciences & Healthcare, Clarivate said: “In 2021, the global biotech industry was able to attract the kind of funding and support needed to maintain sustainable progress. With continuing focus on the global COVID-19 pandemic, the global biopharma industry not only gained in public prominence but had one of its strongest years ever. The UK life sciences and biotech sectors in particular reached new heights, with a strong academic tradition and deep industrial expertise as well as government and business support encouraging increased financing by venture and private investors in the biopharma industry.”