From hosting innovation to owning it: why UK life sciences policy must back domestic scale-ups
In this guest blog, Dr David Montgomery, co-founder of PM Life Sciences, discusses the reality of UK-originated assets, companies and long-term economic returns ending up overseas despite record public investment and a world-class discovery base. PM Life Science's policy paper, From Hosting Innovation to Owning It, argues that the issue is no longer political intent but system design.
Life sciences is central to the UK’s growth mission, with Government aiming to make the UK Europe’s leading life sciences economy by 2030 and third globally by 2035. Yet despite record public investment and a world-class discovery base, too many UK-originated assets, companies and long-term economic returns still end up overseas.
Our new policy paper, From Hosting Innovation to Owning It, argues that the issue is no longer political intent but system design. The UK has built a discovery-first, scale-up-blind model that systematically de-risks innovation for others. If the growth mission is to succeed, policy needs to shift from formal neutrality between sponsors to deliberate support for UK-headquartered scale-ups at the point of greatest vulnerability: the jump into early clinical development.
Despite significant investment in trials infrastructure and regulation on the back of the O’Shaughnessy report, multinational pharmaceutical companies are enrolling fewer UK patients year-on-year. It’s time we shifted our focus to explicit support for UK-based companies.
When neutrality becomes structural bias
On paper, UK life sciences policy treats all sponsors equally, regardless of size, ownership or strategic importance. In practice, that neutrality entrenches structural bias. Large multinationals can absorb delays, re-sequence programmes across their global networks and move trials between jurisdictions. UK SMEs, by contrast, carry concentrated execution risk; a slow site activation, a missed recruitment target or an unexpected cost rise can be existential.
Funding structures reinforce this. The overwhelming majority of public money still flows into academic research, infrastructure and enabling systems, with only a small fraction explicitly directed at carrying UK-headquartered companies through early development. We don’t argue for a reduction in this funding. But rather we observe that as a consequence of these funding choices universities and technology transfer offices are incentivised to license and spin-out early; founders are incentivised to accept overseas capital that offers faster clinical progression elsewhere. The system then behaves exactly as designed: discovery in the UK, clinical value inflection abroad and long-term value captured in other markets.
The recent Metsera story is a case in point. UK academic research underpinned Zihipp’s obesity and metabolic assets, which were acquired into US-founded Metsera, enabling it to raise substantial capital, IPO at a multi-billion valuation and then be acquired by a global pharma company for several billions more. UK stakeholders retain milestone and royalty rights, but not the full upside of building a global leader headquartered and scaling here. At the same time, no UK biotech completed an IPO in 2025, the third consecutive year without a new domestic listing.
A narrowing global window
This would be worrying enough if the rest of the world stood still. It has not. The US and China are already far ahead on clinical execution, with deeper capital pools and faster, more predictable pathways from pre-clinical work into first-in-human and proof-of-concept studies, making growth-stage funding markedly easier to secure than in the UK. China in particular has treated early clinical development as a strategic capability, driving double-digit annual growth in Phase I activity and capturing almost 40% of global clinical research by 2023 through a mix of policy support, hospital networks and executional intensity.
In parallel, the EU’s proposed Biotech Act would streamline trial regulation, introduce sandboxes for novel modalities and unlock new public-private investment mechanisms to keep European biotech scale-ups and manufacturing onshore. The reality is that we are in a dogfight with Europe for third place, while the gap between the UK and the US-China duopoly for the top two spots is widening fast.
Meanwhile, current public funding allocations risk locking in a discovery-first, scale-up-light model for the remainder of the Spending Review period if left unadjusted. With a strong pipeline of UK-originated assets approaching early clinical stages, from genomics and AI-enabled discovery to cell and gene therapies, the costs of inaction are rising. The question is no longer whether to intervene, but whether to do so while the UK still has leverage.
From diagnosis to prescription: six practical shifts
Our paper focuses on what we should start doing differently. It sets out six practical shifts focused on the point where market failures are most acute, the transition into Phase I and early Phase II, while remaining compatible with the UK’s subsidy control and international obligations:
- Create a coherent national pathway for scale-ups.
- Define clear criteria for supporting high-potential UK companies.
- Rebalance public funding towards early clinical execution.
- Treat regulation, data and clinical infrastructure as strategic assets.
- Enable the NHS to be a globally competitive development partner.
- Align public capital with long-term UK value.
From intent to ownership
The central message of From Hosting Innovation to Owning It is that the UK has already built a world-leading discovery ecosystem. What it now needs is a coherent, intentional strategy to carry UK-headquartered companies through their most fragile clinical inflection points and retain a fair share of the economic and health value created by its own science.
For policymakers, investors and sector leaders, the choice is stark. The UK can remain a world-class service economy for global innovators – busy, attractive, but structurally exporting ownership – or it can decide to own a greater share of the life sciences future it is helping to invent. Our paper is offered as a practical roadmap for shifting from neutrality to intent, and we look forward to working with the BIA community to turn these ideas into action.