UK biotech financing January - March 2026

UK biotech financing in Q1 2026 showed signs of recovery, with total equity financing reaching £552 million, up from £466 million in Q4 2025. This increase was accompanied by a broader distribution of investment across funding stages, indicating a more active and diversified funding environment for innovative UK biotechs at the start of the year.

Venture capital totalled £516 million, representing a 17% increase from £442 million in Q4 2025, suggesting a  sustained recovery could be taking hold. Unlike Q1 2025, where a small number of very large rounds dominated, Q1 2026 saw a broader distribution of capital across companies. Notably, deal count increased significantly to 24 transactions, up 60% from 15 deals in Q1 2025, indicating a more active but lower-value investment environment.

While total funding remains below the £924 million recorded in Q1 2025, this comparison is heavily influenced by a small number of megadeals in the previous year. Excluding these, underlying investment levels in Q1 2026 are significantly higher, pointing to a strengthening base of investor activity.

However, the recovery is not yet seen in the public markets. Follow-on financing totalled £36 million, up from £24 million in Q4 2025. IPO activity remained stagnant, with no UK biotech IPOs recorded in Q1 2026, extending the prolonged period of inactivity in public listings.

However, the quarter did see significant M&A activity. Centessa Pharmaceuticals was acquired by Eli Lilly for £4.6 billion, while Dark Blue Therapeutics was acquired by Amgen for £626 million. These transactions highlight continued strong international demand for UK biotech assets, even as public and private financing conditions remain challenging.