There has been a resurgence in life sciences financing in the UK, amounting to $2.86 billion, new figures reveal.
An analysis by BioTrinity and trading house Peel Hunt show 114 disclosed financing rounds in 2014 by UK life sciences companies across a range of companies including biotech, diagnostics, medtech and research tool. According to the findings, $883 million was raised in venture financing rounds and $1.9 billion was raised on the London Stock Exchange, marking 2014 as a year of resurgence for the UK life sciences sector, the analysts say.
The majority of venture financing ($500 million) was raised by biotech companies, while firms located in the Golden Triangle secured more than 50% of venture financing, with the Oxford cluster in the lead ($221 million), London slightly behind ($147 million) followed by the Cambridge cluster ($131 million).
Forty three public markets fundraisings, including 13 IPOs, raised $1,975m including $1,580m in biotech, pharma and speciality pharma financings, $203m by medical devices firms, $53m by diagnostics companies, $18m by contract research companies and $121m by research tools companies. There were seven fundraises on the public markets of $100m or more, indicating investor risk appetite amongst institutional investors is improving, the analysts said. Circassia Pharmaceuticals plc raised more than £200m in March 2014, valuing the company at £581m, making it the largest ever London-listed biotech IPO.
In addition, a further $689m was raised by London-listed funds investing in IP commercialisation comprised of Imperial Innovations plc ($247m), Allied Minds ($181m), IP Group ($154m) and Mercia Technologies ($108m). This figure was excluded from the totals because these funds invest in a number of sectors including life sciences.
The Golden Triangle secured 60% of public market financings, with the London cluster in the lead ($551m), followed by Oxford ($485m) and Cambridge ($141m).
Encouragingly, 2015 has got off to a good start in London, with specialty pharmaceutical company Allergy Therapeutics proposing to raise $32m and IP Group proposing to raise $192m. In addition, there is evidence of funds flowing from US-based investors into a number of London listed mid and small cap healthcare companies, signifying that London listed companies are able to attract capital on a global stage.
The resurgence is being put down to the strong foundations in the UK, the generous tax climate and the glut of skilled life sciences talent.
Jon Rees, CEO at OBN, welcomed the news: “Taken together the public markets and venture financing data combined demonstrate the resurgence of financing in UK life sciences. However, the relatively small proportion raised for enterprise financing rounds strongly supports the case for continued financing mechanisms to support innovative R&D firms through the equity gap, such as the Biomedical Catalyst.”