BIA welcomes financial support for biotechs during COVID-19 disruption

A new support fund for innovative firms struggling to access equity finance during the COVID-19 disruption has opened for applications today (20 May). The Future Fund, run by the British Business Bank, will provide convertible loans of between £125,000 and £5m to businesses if they can also secure matched funding from third-party investors.

Dr Martin Turner, Head of Policy and Public Affairs at the BIA said:

“Innovative businesses are facing an uncertain climate for fundraising in the months and potentially years ahead. The Future Fund will help shore up investor confidence and provide welcome capital to support R&D and business growth.

“The government has prioritised simplicity over adaptability in its design of the convertible loans meaning there will be many businesses ineligible or unable to access the Future Fund. This includes life science companies quoted on the Alternative Investment Market (AIM). Unfortunately the loan notes are also not compatible with EIS and VCT investments. The Government must monitor this carefully and stand ready to take further action if quality companies are found to be losing out.”

The Future Fund is complemented by “continuity” grants and loans provided by Innovate UK to companies with live projects at risk of being disrupted or cancelled due to COVID-19. These were launched on Friday 15 May.

Dr Martin Turner, Head of Policy and Public Affairs at the BIA said:

“We’re very pleased to see these support measures rolled out. There are thousands of strong and promising life science companies across the UK facing severe unexpected pressures and this support will help them weather the storm. The UK is the third global hub for life sciences so this action from government is vital to ensure we do not lose that world-leading position.  

“The continuity grants and loans will allow hundreds of promising life science companies that are already in receipt of Innovate UK grants to emerge from the COVID-19 storm in a strong position to continue their R&D programmes and grow their businesses. The disruption caused by the pandemic has made laboratory research impossible for many companies and slowed or halted clinical trials across the UK, this additional grant funding and business support will help companies make up for lost time.

“Our members should look at the terms carefully to ensure they are right for them and be particularly mindful loans could impact their R&D tax credit claims in the same way as a grant.

“The support announced is only for Innovate UK’s existing customers. We need to see action for the rest of the community as well, including the rapid relaunch of successful established schemes like the Biomedical Catalyst, which are proven mechanisms to boost innovation and economic growth. These will be vital to the UK’s social and economic recovery.”

 

ENDS

Notes to Editors

1. For more information please contact Shannon Quinney, Communications Executive on squinney@bioindustry.org or 07864 902930

2. Further information about the Future Fund and how to apply can be found here. Further information about the continuity grants and loans from Innovation UK can be found here. Eligible companies should have been contacted directly by Innovate UK.   

3. The Government has also today announced a further £20m is to be awarded to start-ups through grants of up to £50,000 each. More information can be found here.

 

About the BIA 

Established over 25 years ago at the infancy of biotechnology, the BioIndustry Association (BIA) is the trade association for innovative life sciences in the UK. Our goal is to secure the UK's position as a global hub and as the best location for innovative research and commercialisation, enabling our world-leading research base to deliver healthcare solutions that can truly make a difference to people's lives.