UK biotech raises $1.5bn in record quarter

The investment picture has been matched by rising share prices

Data from the BioIndustry Association (BIA) and Clarivate reveals that UK biotech companies raised more than £1bn in equity finance between June and August 2020, the highest quarter for investments in the sector on record.

The report shows $155m was raised through the year’s first Initial Public Offering, showing continued US appetite for UK biotechs on NASDAQ, $367m was raised through Venture Capital, including a return to pre-COVID 19 levels of seed and early-stage VC deals and $782m 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.

In terms of notable investments, Freeline Therapeutics, a clinical-stage gene therapy company, topped investments with a $154m IPO on NASDAQ. NodThera, which is developing anti-inflammatory therapeutics, raised $53m in a series B venture capital deal while Bit Bio, a gene therapy company, raised $41m in a series A venture capital deal.

UK biotech was outperforming the broader market before COVID-19 hit, since then its relative performance has been stronger still and many investors have entered the sector on the London Stock Exchange.

The BIA recently published Opportunity on your doorstep: a guide to investing in the UK biotech sector The guide provides an introduction to the different sub-sectors of biotech and its applications, explains the R&D and regulatory processes and explores the different ways investors can gain exposure to the sector through a diversified portfolio.

Steve Bates OBE, Chief Executive of the BIA said: “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.

“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.”

Mike Ward, Global Head of Thought Leadership, DRG, a part of Clarivate, said: "Biotech companies are well positioned to deliver the clinical advances patients need. Not only have companies across the globe banked record sums this year, specialist biotech investors have in the first three quarter raised more than $16bn in new funds to support biotech in the coming years."

The data and continuing growth of the UK biotech sector, including the emergence of data and AI-enabled biotech businesses will be discussed this week at the BIA’s UK Bioscience Forum on 14 and 15 October.

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