2021 on track to be another record-breaking year for UK biotech investment as investors see returns from the maturing sector
UK biotech companies are on track for a record-breaking year of fundraising according to the latest data released by the UK BioIndustry Association (BIA) and Clarivate.
More than £830m in fresh capital was raised in the three months to the end of February, almost topping the £894m raised in the first six months of 2020, which itself was a record-breaking year.
Global investors continue to recognise the high potential of UK science, with both public and private companies securing large investments to finance their R&D programmes and accelerate the delivery of innovative medicines to patients.
Highlights from the data include:
- £336m was raised in venture capital between December 2020 and February 2021, up from £123m in the same period a year ago
- £215m was raised through IPO, up from £0 a year ago
- £279m was raised through follow-on financings, up from £186m a year ago
Responding to the news, BIA CEO Steve Bates OBE said:
“This strong start to 2021, with investments outpacing the record setting year of 2020, shows the incredible appetite amongst international and some domestic investors for the UK’s world leading biotech and life sciences companies.
“This has been reinforced by the recent announcement that £1 billion will be invested in the sector through a UAE-UK Sovereign Investment Partnership. This quarter has also seen significant private sector investments into UK medicine manufacturing capability and clinical development pipelines, which has fuelled increased confidence in the sectors outlook for 2021.”
Globally, £7.2bn venture capital has been invested into private biotech companies, £888m of it in Europe. The UK accounted for almost 38% of the European total.
Mike Ward, Global Head of Thought Leadership at Clarivate, said:
“In the three months to 28 February, the global biotech sector has maintained the momentum of last year’s record-breaking financial activity. According to data collected and curated by BioWorld, biotechs across the world raised almost £26.7bn, more than double the amount raised in the same period a year earlier. It is clear that investor appetite for the sector has not been satiated.”
UK biotech is providing strong returns for investors
Alongside the high levels of investment, the UK’s maturing biotech sector is providing strong returns for its financial backers.
An analysis by Radnor Capital Partners on behalf of the BIA found that biotech companies quoted on the London Stock Exchange have out-performed the FTSE-All Share by 256% in the past year (unweighted), with listed collective investment vehicles, which are favoured by retail investors because they diversify risk, rising 60.4% compared to the FTSE All-Share. As markets have started to rebound as the pandemic in the UK eases, the sector has continued to outperform, with the FTSE All-Share rising by only 4% against 24% for the quoted biotech sector (unweighted, or 14% on a market cap weighted basis).
With the new UK financial tax year soon to begin, sector experts are confident that UK biotech and life sciences companies, as well as funds dedicated to investing into the sector, will be a more popular location for retail investors.
This positive outlook is based on the high rewards investors received in the first quarter of 2021, from two major biotech acquisitions as well as strong share performance by companies quoted on AIM. Jazz Pharmaceuticals struck a deal on 3 February to acquire GW Pharma for £5.3bn ($7.2bn), representing a 50% premium to its share price. And on 11 January, Sanofi announced it will acquire Kymab for an upfront payment of approximately £1.1 billion including milestone payments.
BIA CEO Steve Bates OBE said:
“UK biotech returns this quarter highlight the opportunity on their doorstep for UK institutional investors. In 2021 UK life science companies are providing returns to investors both in their pockets and in their arms through COVID-19 vaccines.”
Notes to editors:
- For more information please contact Jack Fellows, Communications and Media Manager on [email protected] or 07825942934
- The dataset in the report covers the period from 1 December 2020 to 28 February 2021. It provides fundraising data based on the headquarters location of the company. The data is provided by Clarivate
- To read the BIA and Clarivate report please follow this link.
- For more information on Jazz Pharmaceutical’s acquisition of GW Pharma, see: https://ir.gwpharm.com/news-releases/news-release-details/jazz-pharmaceuticals-acquire-gw-pharmaceuticals-plc-creating
- For more information on Sanofi’s acquisition of Kymab, see: https://www.kymab.com/news-and-publications/news/2021/jan/11/sanofi-acquire-kymab-adding-ky1005-its-pipeline-hu/
- For more information on the UAE and UK launch sovereign investment partnership, see here: https://www.gov.uk/government/news/uae-and-uk-launch-sovereign-investment-partnership-with-initial-1-billion-in-life-sciences
- Recent investments in UK medicine manufacturing include Touchlight and eXmoor pharma receiving significant investment, and GSK announcing plans to accelerate its cell and gene therapy pipeline for clinical trials. The Government also confirmed at the Budget that money would be given to CPI to create an mRNA vaccine library.