Time to mandate UK pensions to back UK innovation: BIA report shows biotech opportunity being missed
London, UK – 6 May 2025 – The BioIndustry Association is calling on the UK government to mandate pension funds to invest in high-growth UK sectors, as new data from its latest report shows British pension schemes are still missing from the biggest biotech deals.
The UK’s ability to attract global investment is outlined in the new UK biotech financing report for Q1 2025, which details £924 million in total equity financing for the sector, underpinned by two major venture capital (VC) deals, and reveals that the UK venture capital total was £881 million, the largest amount raised in Europe by a significant margin and more than double the total of Q1 2024.
Among the key findings of the report are:
Venture capital performance is strong but highly concentrated:
- UK biotech companies raised £924 million in total equity financing in Q1 2025 - down slightly from the £987 million raised in Q1 2024.
- Venture capital rose to £881 million, the highest quarterly total since Q2 2021. Two particularly significant deals - Isomorphic Labs (£449 million) and Verdiva Bio (£327 million) - constitute the bulk of this figure.
- Deal volume declined to 15, from 18 in Q1 2024, suggesting increased selectivity among investors, possibly caused by shifts in the geopolitical landscape.
- Seed and Series A activity remained limited, with only two deals each.
The UK leads Europe:
- The UK led Europe in VC funding in the first quarter of 2025, significantly ahead of Switzerland (£419 million) and Belgium (£162 million).
- Europe’s VC total rose dramatically to £2.05 billion, up from £608 million in Q1 2024.
- The US remained dominant, raising £5.2 billion in VC, although this still represents a marked decline from the previous quarter, illustrating that the slight UK drop is not an anomaly.
Steve Bates, CEO of the BIA, said:
Our latest quarterly finance report shows that despite the commitments made under the Mansion House Compact, there is still no meaningful participation from UK pension funds in supporting the growth of UK life science sector.
BIA member companies remain hungry for investment and offer incredible innovation and growth prospects, as landmark fundraises from Isomorphic Labs and Verdiva Bio attest. Deliveroo’s takeover this week shows how difficult it is to scale to global growth from the UK.
If the City of London cannot voluntarily organise investment vehicles in 18 months to match the ambition of UK innovators and the UK government in backing our growth economy, it is time to mandate them to do so.
Ministers must ensure the UK pensions industry – which enjoys a dependable and growing income enabled by tax relief at great cost to the UK tax-payer – uses our nation’s wealth to build an economic future for UK citizens’ benefit. That means backing innovative UK companies creating value that improve our lives.
The BIA is urging government and regulators to stop waiting for voluntary commitments to materialise and instead level the playing field through mandatory participation in UK growth sectors like biotech.
