Financing figures reveal resilience of UK biotech in 2023

2023 was a tough year for biotechs with declines in private fundraising and public listings, but the UK industry stood up well under the pressure, according to new figures from the BioIndustry Association (BIA).

All told, UK biotechs raised $1.8 billion ($2.29 billion) in investment over the course of last year, which was a modest 9% decline on the prior year and showed “remarkable resilience” for the industry, said BIA chief executive Steve Bates.

The investment, alongside “billions more in licensing and M&A deals, highlights the strength of our science, the talent of our entrepreneurs, and the growing interest in innovative life sciences technologies,” he added.

The report reveals that £1.25 billion of the total was from venture capital sources, a reduction of 6% on 2022 that came against a backdrop of a 43% decline in VC funding across all industrial sectors.

The top deals were portfolio company Apollo Therapeutics‘ £210 million Series C in September and a pair of approximately £100 million early rounds for Ascend Gene & Cell Therapies and Beacon Therapeutics, another gene therapy player. Meanwhile, the most active VCs were Meltwind Advisory, o2h Ventures and Sofinnova Partners, with five deals apiece.

The UK also retained its top spot in Europe, accounting for 41% of total VC investments in biotechs across the region, while overseas investors participated in 40% of all UK biotech venture deals last year.

The UK received 8% of all venture capital investment in the global biotech industry, with European countries collectively accounting for 19% of all VC funding, while Asia constituted 10%. The US remains way out in front with 70% of the total.

Is an IPO recovery coming?

Public financings overall were stable at £551 million, and there were no new listings in the UK during the year due to the prevailing trend of low valuations and investor appetite. However, two European companies did list on the Nasdaq in the US, which the BIA said points to a potential recovery.

“With the global inflation easing, there is hope for a gradual recovery in the public markets in 2024, which will lead to an improved venture environment,” predicted Bates. “The UK’s strong science, coupled with meaningful policy progress aimed at unlocking new pension fund capital, positions the sector well for continued growth in the year to come.”

The report was published as CG Oncology became the first biotech to complete an IPO in 2024, raising $380 million in a massively upsized deal.