UK biotech financing 2023
Despite the global economic downturn, UK life sciences companies secured £1.25 billion in venture financing, constituting 11% of the total venture capital investment in UK companies this year. This share has been maintained even amid the decline in investment from the remarkable highs of 2021, suggesting that the decline in investment is likely due to economic conditions and global events rather than industry-specific reasons. The sector therefore remains an attractive and reliable destination for venture capital investments.
The UK upheld its position as Europe’s leading biotech hub, contributing to 41% of the total venture capital raised across the continent. European countries experienced only a slight dip in venture funding compared to the previous year whereas US companies suffered the biggest fall in takings at -39%.
Companies on the public markets struggled from low investor appetite for the second year in a row as UK biotechs saw a follow-on fundraising decrease of 16%, with only £551 million raised. There were also no new public launches. However, Europe’s two new Nasdaq-listed biotechs could signal a slowly improving public market for 2024.
Our London biotech share price index, presented for the first time, also shows a more positive picture, as the sector outperforms the wider market in the long term and has not lost the substantial value gains secured during the pandemic. Some strong licensing and M&A deals in the year also demonstrate the ongoing quality and attractiveness of UK science.