UK biotech venture investment remains buoyant in Q2

Venture financing for UK biotechs reached a five-year high in the second quarter of the year, with more than £2 billion raised, according to the Bioindustry Association (BIA), which said the haul "cements its position as Europe's biotech investment leader."

Granted, the bulk of the £2.05 billion tally came from AI specialist Isomorphic Labs' massive £1.6 billion second round financing, but the BIA maintains that "the underlying market recovery remains real" and comes after signs of gathering momentum were seen in the first quarter of this year and last quarter of 2025.

Excluding the Isomorphic raise, UK biotech companies secured £498 million in venture capital during the second quarter, well up on the £279 million raised in the same period of 2025, and showed encouraging signs of investor appetite from the seed stage onwards.

Overall, the UK captured 61% of Europe's £3.3 billion venture capital placements during the quarter, according to the BIA.

The first half of the year "delivered private investment at all levels, from start-ups to unicorns, plus a billion-dollar M&A, signalling a sustained recovery in fundraising and recyclable returns for both private and public sector investors."

BIA chief executive, Prof Chris Molly, said that Novartis' $1.5 billion takeover deal for antibody-drug conjugate (ADC) developer MyricxBio will generate "reinvestible proceeds [that] are vital to the sustained success of our sector."

Public markets still lagging

While the venture investing landscape is looking good, the gains are outstripping those in UK public markets, which are lagging behind European peers, such as France, with follow-on financing of just £58 million and with no IPO activity.

On the plus side, that was an increase on the £36 million follow-on financing in the first quarter and almost four times the tally in the same period last year. Still, Molloy – who took over from Steve Bates as CEO of the BIA in May – said that it is now imperative that public markets "recognise, cover. and return to backing our sector."

"Our collective focus must be to ensure that this momentum is maintained and that the proven returns our investors are making attract more institutional investors to back this sector with growth capital," he added.

Meanwhile, along with greater public financing activity, "private momentum must be joined by robust, public sector-managed, investor-advised translational funding. This combination will de-risk the early-to-mid stage companies and sustain growth across every tier of the sector, making the whole of the UK fit to fund."

Photo by Chris Lawton on Unsplash