UK biotech riding on crest of VC funding wave - report

Venture capital funding for the UK biotech sector is robust following a solid start to the year, according to new data.

According to a quarterly report from the BioIndustry Association and Informa, Venture Capital funding for the sector in Q2 was £329.6 million, up from £134.9 million in Q1.  This brought the total raised during the first half of 2017 from VCs to £464.5 million

There was also the first UK biotech IPO, which generated £36 million, as Acacia Group launched on the Euronext exchange in Brussels.

However follow-on financing was down from £265.5 million in Q1 to £64.85 million in Q2, with £330.35 million raised so far this year.

Most of the follow-on financing came from GW Pharma’s £221.6 million fundraiser on the Nasdaq stock exchange in Q1.

The figures suggest a bumper year for VC and follow-on funding – in all of 2017 VC funding for the sector was £515 million, while UK biotech raised £452 million in follow up funding last year.

However there is a long way to go to match the £234 million raised through IPO funding in 2017.

[caption id="attachment_20555" align="alignleft" width="144"] Steve Bates[/caption]

The BIA’s chief executive, Steve Bates, said: “It’s great to see so many BIA member companies feature within this dataset, from impressive venture capital fundraisings by Oxford Nanopore, Benevolent AI, Crescendo Biologics and Enterprise Therapeutics to follow on financings by Oxford Biomedica, Summit Therapeutics, Diurnal Group and Scancell Holdings and Acacia Pharma’s IPO. With financing activity continuing over the summer, we look forward to these positive trends continuing as we track the data throughout the remainder of 2018.”

The data suggests that the progress in the UK biotech pipeline is continuing, as was revealed in the BIA’s report ‘Pipeline Progressing: The UK’s global bioscience cluster in 2017’ in January.

The BIA/Informa Pharma Intelligence report showed the UK has the strongest clinical and preclinical pipeline in Europe.

UK biotechs are maturing and moving through the financing life cycle, with strong backing from IPOs, according to the report.