UK biotech financing 2025

In 2025, the UK biotech sector continued to operate in a challenging financing environment, securing £1.9 billion in equity financing. Of this total, £1.8 billion was raised through venture capital, representing a 13.2% decrease year on year. The new figures are revealed in the BioIndustry Association’s (BIA) annual UK biotech financing report.

The decline was driven by the drop in deal activity, with investors remaining highly selective and focusing capital on a limited number of companies. At the same time, the UK continued to attract a diverse and international investor base, with strong participation from North American and European funds, particularly at later stages.

Public market activity contracted significantly in 2025, with no IPOs of UK biotechs for a third consecutive year and follow-on financings declining sharply. UK companies raised £95.8 million, a 93.6% decrease compared with 2024. Activity shifted away from large Nasdaq-led raises, with AIM accounting for 74% of follow-on capital. 

In contrast, mergers and acquisitions (M&A) activity was a clear strength in 2025, delivering several high-value transactions and providing a vital route to liquidity in the absence of IPOs. Strategic acquisitions by global pharmaceutical companies underscored the continued international demand for UK biotech assets, particularly for companies with late-stage or commercial products.

2025 highlighted both the resilience and the constraints of the UK biotech financing ecosystem. While innovation continues to attract global interest and strategic capital, the persistence of venture capital concentration, limited scale-up funding, and continued IPO inactivity underline the importance of a balanced mix of venture, strategic and public market funding to support long-term sector growth.