UK Biotech forges links with new global investors

The UK BioIndustry Association (BIA) is hosting the key movers from the Hong Kong stock exchange in London this week as part of a strategic push to enable global investors to get to know the opportunities in UK biotech.

BIA CEO Steve Bates said “The roundtable events follow recent rule changes on the Hong Kong Stock exchange which enable pre-revenue biotech companies to list on the exchange, something London and US rules have allowed for several years. In the first few months of operation 10 companies have followed this route, and UK companies are keen to explore whether this Hong Kong option may be of use for them in future.”

Chinese investors have also shown renewed and reinvigorated focus in UK biotech with a number of deals announced in 2019. Bates added “Chinese pharmaceutical companies are very active in seeking licensing deals for UK innovation. This has become a new form of funding possibility for UK biotech and flows from recent strengthened trade missions between the two countries”.

This may in part be due to new US financial regulatory rules, introduced by the Trump administration, such as the Committee on Foreign Investment in the United States (CFIUS) which has the authority to review certain foreign investments in US businesses to determine whether they could pose a risk to US national security. Steve Bates commented “These new rules are making Chinese investors look more closely at opportunities outside of the US. In the UK we are meeting with Chinese investors looking for investment opportunities that will not be captured by unclear additional burdens of CFIUS.”

The new global investor focus on UK biotech comes as the BIA and Informa Pharma Intelligence today (Monday 24 June) publish new data that shows UK biotech companies raised £682m between December 2018 and June 2019, showing investors have been maintaining their confidence in the UK’s biotech sector despite challenging global political and financial headwinds.

Highlights from the report reveal:

  • UK biotech companies raised £214m from public markets between March and May 2019, more than double compared to the previous quarter, bringing the half-year total to £311m
  • The first UK biotech to IPO in 2019 was Belfast-based Diaceutics, which raised £17m on AIM. Bicycle Therapeutics achieved the biggest IPO of the year so far with a £46m raise on NASDAQ
  • Venture capital financing remained steady, with £189m invested between March and May 2019, bringing the half-year total to £371m
  • The UK accounted for over two-thirds (37%) of biotech investment in Europe

Steve Bates OBE, CEO of the BIA said: “The UK biotech sector continues to receive strong investment in very uncertain times. We continue to see the maturing of the UK life sciences sector and, with it, a greater diversity of investors seizing the opportunity, particularly from China and the Far-East. Chinese investors are becoming more aware of the increased attractiveness of the UK to invest in.” 

“The sale of Nightstar to Biogen for $877 million, delivering a 4.5x multiple on Syncona’s original investment, shows real value can be created for shareholders. And news that Kisqali, a breast cancer drug developed by BIA member Astex Pharmaceuticals in collaboration with Novartis, cuts the risk of death by up to a third when given with hormone therapy, shows that real value can be created for patients too.”

Mike Ward, Head of Pharma Content, Informa said:  “While the total sums being invested in biotech equity globally have retreated by a third when contrasting the first half of 2019 against the same period in 2018, investment in UK-based companies has remained fairly robust and although behind 2018’s record year is on course to be a strong year.”

However the BIA has again appealed to UK politicians to avoid a no deal Brexit.  Appearing before the House of Commons Brexit select committee on Wednesday Steve Bates warned MPs that politicians talking up the chances of a no-deal Brexit made it harder to secure global inward investment saying “If you have got a set of scales on whether the UK is a great place to invest in life science,  on one side we have the positives of the Life Science Sector deal, R&D tax credits, and a fantastic life science environment in the UK and on the other side, we have the uncertainties around Brexit. Talk of no-deal adds another weight to that negative side of the scales - and is that the one that tips the investment decision against all that excellent work we’ve been doing for generations in UK life sciences, against the UK?”

Notes to editors

  1. The BIA has been leading on pioneering work with investors from Asia:
    • The BIA is this week hosting a delegation of market participants from Hong Kong in London.
    • In March the BIA attended the WuXi Healthcare Forum in Shanghai, where key observations were made on the investment opportunities from the Far East to the UK life sciences sector.
    • At the Boao Forum, the BIA was present when Astra Zeneca and the Wuxi High-tech District signed a Memorandum of Understanding in regard to the opening of a new International Life Science Innovation Park which will be built in Wuxi, China.
  2. An example of a UK biotech company that has done a recent deal with a Chinese investor is ReNeuron See:
  3. The BIA has been working with member companies in this area, taking delegations over to China.  A recent blog on trade missions is here
  4. £2.2bn was raised by UK biotech companies in 2018, which was the most ever raised by the sector. The second most successful year was 2015, when £1.9m was raised.
  5. Agreement was reached between Nightstar Therapeutics and Biogen for a sale in March 2019 and the deal was completed in June. The offer valued Nightstar at $877 million and represents a 4.5x multiple on Syncona's original investment of £56.4 million and an internal rate of return (IRR) of 72%. More information can be found here.
  6. Kisqali was discovered and developed by the Novartis Institutes for Biomedical Research (NIBR) under a research collaboration entered into with Astex in 2005. A new set of statistically significant overall survival (OS) data published in the New England Journal of Medicine showed that after a median of 42 months follow-up, survival rate was 70.2% for women who received Kisqali combination therapy compared to 46.0% for women who received endocrine therapy alone. More information can be found here.
  7. The BIA has stressed repeatedly said that a no deal Brexit, would mean the biggest dis-integration of the complex regulated medicines market across Europe in terms of regulation, cross-border movement of goods, comparative pricing and intellectual property. More detail can be found here.
  8. To read a full copy of the report please follow this link.