Investment in UK biotech has fallen from £4.5 billion in 2021 to just £1.8 billion in 2022, mirroring the global economic downturn impacting all sectors.
However, venture capital investment in the sector was the third-best year recorded for the UK, with £1.2 billion raised, new analysis from the UK BioIndustry Association (BIA) and Clarivate shows.
New venture capital funds with a mandate to invest in UK biotech were created in 2022, adding another £3.7 billion of capital that could be attracted to the UK sector.
Acquisition of UK innovation by US companies increased, including Pfizer’s acquisition of ReViral for an estimated £420 million, Gilead’s acquisition of MiroBio for an estimated £305 million, and Abbvie’s acquisition of DJS Antibodies for £229 million.
Leading UK biotechs also achieved pivotal milestones in their development. Verona Pharma reported a successful Phase III trial for Ensifentrine, the first novel compound in over a decade for chronic obstructive pulmonary disease (COPD), and Immunocore achieved regulatory approval for Kimmtrak (tebentafusp), the first T cell receptor (TCR) immunotherapy to be approved to treat solid tumours.
Steve Bates OBE, CEO of the BIA, said: “UK based life science companies are world leading in developing life changing medical innovation. This year’s data shows they are much sought after by global pharmaceutical companies looking to acquire innovative pipelines and platforms, for which they are willing to pay significant premiums.
“The halving of R&D tax relief for SMEs without details of what further support will be made available leaves the sword of Damocles hanging over the UK’s start-ups and scale-ups. In a year when global markets are closed to biotech, it is vital that the UK does everything possible to attract investors and support its innovative companies.”
Read the full report: UK Biotech Financing 2022.