The UK life sciences sector is thriving, seemingly unfazed by Brexit and political uncertainty, attendees to the Babraham Investor Conference asserted.
With a focus on scale-up and venture-stage growth companies, the event showcased a variety of ambitious businesses developing technologies that could have a huge impact on areas ranging from cancer detection and antibiotic resistance through to drug delivery and data analytics.
Bioscience bounce back
Larger rounds are also being sought, a sign that the sector in the UK is maturing and bouncing back from difficult times. After the Credit Crunch, many investors retreated from the sector in favour of propositions which had shorter lead times and were less binary and capital intensive. It was also clear that the established venture capital model didn’t always work for biotech due to the long timescales and uncertainty of the propositions.
As a result, the funding landscape has now changed for the better in recent years. The big pharmaceutical companies have set up their own funds to provide growing companies with access to investment and encourage other investors to the sector. Open-ended funds, patient capital and corporate venture funds have also been introduced.
More funding options
The companies that presented exuded confidence and also showed their openness to collaboration and innovation with most pursuing a virtual model.
Investor-side attendees included venture capital funds, corporate investors and City brokers giving businesses with good propositions a wider choice of funding options compared with previous years.
This broad mix of investors is not only attracted to the sector because of the quality of the opportunities, but as the UK is now a global capital for life sciences, with Cambridge positioned as the second largest hub in the world, after Boston in the US.
Furthermore, there’s been a renewed focus on what the sector has to offer since details of the Government’s Industrial Strategy emerged. Science and innovation has been given a prominent role in the proposals which include a further £4.7 billion investment by 2020/21 in R&D funding to help bring the UK’s spend more in line with Europe. This funding is expected to focus on encouraging companies, particularly smaller businesses, to be more innovative.
As reflected by the theme of the conference, the next big push for UK life science is to get it to scale up and compete on the global stage. There is still a perception that companies that get to a certain size have to go to the US to grow further and that needs to change.
Facilities such as the Babraham Research Campus hold the key to changing this trend. As the pre-eminent biotech space in the country, it is helping companies on campus to raise money and benefit from its ecosystem and networking opportunities.
Support such as this coupled with the breadth of funding now available, means mature companies should be able to stay in the UK and hopefully Government policy will continue to encourage that.
Sustaining its success
There’s no denying that challenges still lie ahead. Brexit and the uncertainty about the future of EU grant funding and attracting talent are the main areas of concern, particularly as non-UK EU nationals make up around 17% of Science, Technology, Engineering and Mathematics (STEM) academics at UK research institutions. So far however, this isn’t stopping investors looking for new opportunities.
This is a sector that has a turnover of more than £60bn a year and is building momentum with the potential to growth further by taking advantage of the opportunities available here in the UK. With the general election on the horizon, we hope the Government will further its support via its Industrial Strategy and Brexit policies, and that the UK cements its position as a global leader in life sciences.