Global investors realise value in UK biotech, but backing innovators is now vital for growth 

London, 27 October 2025 – New data from the BioIndustry Association (BIA), published in its Q3 2025 UK biotech financing report, highlights that the longest global funding drought in the sector is taking its toll on UK venture capital activity, with the investment environment now characterised by caution and heightened selectivity. While the sector's world-class science was validated by a landmark M&A deal, the Q3 figures signal a fragile moment that requires sustained government action to unlock domestic growth capital and secure the UK’s global competitive edge. 

Jane Wall, Managing Director, BIA, said: 

The £1.18 billion acquisition of ViceBio by global player Sanofi is a clear validation of UK science, but the overall Q3 figures reflect a fragile sector under strain from the prolonged global headwinds. 

As we head towards the Autumn Budget, the message to government is clear: global and domestic headwinds can easily undermine our ability to create and scale domestic champions that deliver jobs and economic growth. This is the time to double down on investment and the Industrial Strategy, not look for short-term cost savings. The long-term economic and social returns from backing life science companies and entrepreneurs far outweigh the immediate fiscal pressures. 

We have the policy mechanisms ready. Structural reforms like the Mansion House Accord and the recent positive news from key investors like Syncona that they and their shareholders are backing Britain demonstrate that UK capital can be unlocked. We are urging the government to accelerate the delivery of the Industrial Strategy and the Life Sciences Sector Plan, deploy investment through the British Business Bank, unlock UK pension capital and to back innovation and innovators. This is vital for cementing the UK's position as a global life sciences powerhouse and delivering economic growth in a fragile environment.

Key findings: 

• Venture capital (VC) investment: UK biotech companies raised £187 million in venture capital across Q3 2025. This compares to £344 million in Q2 2025 and a significantly higher £659 million in Q3 2024. This decrease reflects the cautious global sentiment, where capital is increasingly concentrated in later-stage, lower-risk assets. 

• M&A validation: The sector was buoyed by a substantial exit, with the £1.18 billion acquisition of ViceBio by Sanofi. This marquee deal provides a major return on investment and serves as powerful, global market validation that the UK continues to produce world-class, clinically-focused science and intellectual property. 

• The scale-up gap: The continued lack of IPOs highlights the urgent requirement for structural market reform. This funding drought is compounding the established scale-up capital gap, demonstrating that the necessary mechanisms for domestic champions to grow and list in the UK are currently insufficient. 

Innovation pipeline: TechBio (companies leveraging AI/ML) continues to drive deal volume and investor interest. Three of the top five deals in Q3 utilised platform technology, reinforcing the UK's leadership in integrating computational power with biological discovery to accelerate drug development.