New investors drawn to UK biotech as global appetite for innovation continues

New analysis shows that biotech shares on the London Stock Exchange continued to out-perform the wider market in the first half of 2021 as international investors were drawn to the UK’s strong science and high-quality companies.

Since the start of the pandemic (March 2020) the Radnor Unweighted Broad Biotech Index has outperformed the FTSE All Share by +190%. Since the beginning of 2021, the sector has continued to outperform by +13%.

The report finds strong demand from North American investors for UK-quoted biotech (net inflow of £723m) and European investors (net inflow of £130m). Whereas UK larger institutions continued to be material net sellers in value terms with an outflow of £231m.

As public awareness of biotech and healthcare has been awakened by the pandemic, UK Retail Execution Only platforms have also proved to be a prominent force in the sector and were overall net buyers (+£40m) in the year to date.

The broader pool of capital represented by the sector as a result of increasing values and new capital being committed to the sector has meant that investor activity levels have in many cases increased through the course of 2021.

The findings are published in a report by Radnor Capital Partners, commissioned by the UK BioIndustry Association (BIA).

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

“These findings are further evidence that the UK is on the cusp of a golden age for biotech. Global investors, particularly from the US and Europe, can see the huge value in the sector and are flocking in.

“There is a great opportunity here to capitalize on the UK’s position as an international hub for finance, combined with our world-leading biotech sector, to put the UK at the heart of a global industry that will dominate the 21st Century.”       

Iain Daly, Director & Co-founder at Radnor Capital Partners, said:

“The capital raising element of our analysis is perhaps the most profound as 2020 saw a clear break from the previously established trend of declining fundraising activity. The evidence from 2021 to date is that fundraising volumes are tracking below 2020 but well ahead of 2019. With a number of potentially material IPOs to come in H2, this picture is likely to remain positive.”

Notes to Editors

  1. For further information and interview opportunities please contact Martin Turner at mturner@bioindustry.org  
  2. A copy of the Radnor report can be found here. The index classifications and the constituents have been curated by Radnor, in partnership with the BIA, and are calculated and maintained via the FactSet custom index methodology on both an Unweighted basis and a Market Cap Weighted basis. Figures shown in this press release are of the Unweighted analysis. The report does not provide investment advice or seek to promote any individual financial product
  3. On 5 July, the BIA published data showing that UK life sciences is on the cusp of a golden age as a record £2.39bn has been raised through venture capital and public market financings between December 2020 and June 2021. You can read that report here.
  4. On 7 July, the UK Government has published Life Sciences Vision that will build on the UK’s world-leading biotech and life sciences sector, harnessing the UK’s advantages in genomics, data and research, as well as building on the UK’s world-leading response to the COVID-19 pandemic in vaccines development and manufacturing, therapies and diagnostics. You can read the Vision here.