Number of UK biotech companies rising, says report

In a sign that the UK's life sciences sector remains reasonably strong, despite challenges, a new report has found that the number of companies has grown by nearly a quarter in the last few years.

The analysis by property advisory firm Knight Frank found a 22% increase in the number of life sciences companies domiciled in the UK between 2019 and the end of 2025, to a total of 15,436.

There were signs of a slowdown last year, which has been attributed to "an uncertain macroeconomic and regulatory backdrop slowing the influx of new entrants to the market and prompting an uptick in the dissolution of immature pharma and biotech businesses," according to Knight Frank's head of life sciences and innovation, Nicholas Blevins.

However, the signs point to greater optimism for the rest of 2026 and beyond, thanks to "supportive government policy and improving economic conditions," he added.

2025's slowdown mirrors a decline in venture capital investment, which fell 13.1% to £1.79 billion ($2.47 billion) in the year, according to figures from the BioIndustry Association (BIA), although, the group has said it is seeing signs of improved investor sentiment in 2026.

The 'golden triangle' between London, Oxford, and Cambridge remains the hot spot for new companies, thanks to the proximity of top-tier academic centres and good infrastructure, including growing capacity in high-quality lab space.

Knight Frank has calculated that lab availability currently stands at 1.2 million sq ft across the golden triangle, up 68% year-on-year, while named demand for lab/tech box space stands at 1.6 million sq ft.

That shortfall – which comes after several years of supply constraints in the UK lab and office market – looks set to be resolved quickly, as the report found 3.65 million sq ft of labs are currently under construction and due for completion between now and the end of 2028.

Earlier this month, for example, planning consent was granted for a £1 billion development at the London Cancer Hub in Sutton, which will deliver around 1 million sq ft of new lab space, including incubator space for start-ups, and create 3,000 new high-skilled jobs in R&D and life sciences-related manufacturing.

North-south divide narrowing?

Other areas of the UK are starting to develop quickly, however, and Knight Frank found the new company formations last year in the North West of England are outstripping start-ups in the South East and East of England for the first time, now second only to London.

One trend that is starting to affect demand for lab space is the emergence of AI, automation, and robotics, which the report says is "reshaping demand" as companies seek out dry lab sites with strong local connectivity and on-site power.

Photo by Julia Koblitz on Unsplash