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The UK Bioindustry Association (BIA) has today released its annual figures for investment activity in the UK biotech sector, revealing that 2020 saw a record investment of £2.8bn across the sector in the UK, beating 2018's record of £2.2bn. Venture capital funding in the UK hit a new record of £1.39bn, fuelled principally by large series B+ rounds (which have become more attainable in recent years), much of which was funded by US investors. Only three UK biotechs completed IPOs in 2020, netting a total of £244m (Abingdon Health plc's IPO on AIM, which our Corporate team advised on, just missing the cut-off date for data collection for this year's report). This reflects a growing trend for companies to remain private for longer. Secondary and other public financings raised £1.18bn.
This is great news for the sector, and illustrates the biotech market's resilience against the impact of the COVID-19 pandemic, and indeed the uncertainty surrounding the UK's withdrawal from the European Union.
Despite the positive overall trend, at the height of the pandemic in Q2 of 2020 there was marked reduction in seed and series-A investment, and the BIA has observed an overall drop in the number of biotech companies created in the UK during 2020. The number of companies receiving their first investment, however, has only slightly declined compared to last year. The BIA suggests that the pandemic has therefore potentially had a more severe impact on younger biotech companies, than those which are more advanced in their life cycle.
In addition to the increase in the overall UK biotech venture capital investment, total global VC-investment increased to £25.69bn, from £14.63bn in 2019, again fuelled by the biotech hubs of San Francisco and Boston (as discussed in our report on the BIA's 2018 findings, here).
A copy of BIA's report, which includes further details on the highlights we've discussed, can be found here.
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