UK biotech companies raised more than £1 billion in equity finance between June and August 2020, the highest quarter for investments in the sector on record, new data has revealed.
With £1.9 billion raised to date this year, 2020 is on target to be the best year ever recorded for this rapidly expanding sector.
The new report, from the BioIndustry Association (BIA) and Clarivate, shows that £119 million was raised through the year’s first Initial Public Offering, showing continued US appetite for UK biotechs on NASDAQ.
£282 million was raised through Venture Capital, including a return to pre-COVID 19 levels of seed and early-stage VC deals.
£601 million was raised through other public financings on both London and New York exchanges as biotech share prices continue to perform well on both sides of the Atlantic.
The strong investment picture has been matched by rising share prices. UK biotech was outperforming the broader market before COVID-19 hit, since then its relative performance has been stronger still and there have been many new investors entering the sector on the London Stock Exchange.
The long-term returns (10 years) of biotech have outperformed other sectors, including pharmaceuticals and tech, in both venture capital and public markets.
“In a year where COVID-19 has caused major disruptions to the global economy it is fantastic to see the strong investment picture for UK biotech continue to gather pace,” said Steve Bates, Chief Executive of the BIA.
“During the pandemic, UK biotech has shown its strategic value and received great interest from UK based investors, with many investing in the sector for the first time. This could be transformative for patients and the economy, and for shareholders, when combined with the global money we already attract – large pharma, US and Chinese venture capitalists are already aware of the vast opportunities UK biotech presents.
“This strong performance is testimony to the long-term support for life sciences delivered by successive government’s industrial strategies, which have identified the sector as a key engine for economic growth. UK institutional and private investors cannot continue to miss out on this rich source of value creation.
“By building expertise in this sector, a virtuous revolving door can be created where UK institutional and retail investors insightfully support growth opportunities over the medium to longer term, see the returns, and keep coming back for more.”