A boom in Britain’s biotech sector should be supported by pension reforms so that investors can benefit from its growth.
Britain’s biotech sector boomed last year, raising £3.5 billion and growing 94% on the previous year, according to the BioIndustry Association’s (BIA) annual UK biotech financing report.
This is the highest annual figure since the £4.5 billion raised in 2021.
“The UK is a global leader in biotech innovation and attracts the most venture capital in Europe. This year’s figures demonstrate that biotech is a vibrant growth sector of the UK economy with an exceptional ability to attract global investment,” said BIA chief executive Steve Bates.
But behind the figures, it is worth noting that investment was concentrated in a small number of companies that raised big rounds, primarily from US investors.
“While foreign investment is welcome, UK investors are missing out on an opportunity to benefit from a UK growth industry and financial returns and jobs are being lost from the British economy as a result,” Bates added.
Venture capital (VC) funding hit £2.1 billion across 111 deals which is the best performance since the 2021 peak and a 64.8% increase from 2023. A further £1.5 billion was raised through follow-on financings, which is a 170% increase on 2023. It was dominated by UK companies listed on Nasdaq.
The UK government has identified the life sciences sector as one of eight priority sectors for its industrial strategy, thanks to its ability to drive economic growth. Chancellor Rachel Reeves has also highlighted the importance of pension fund reform to increase investment in UK equities and growth industries.
“Pension reforms by the UK government now need to be accelerated to enable increased participation for pension savers in this growth sector from UK institutional investors,” said Bates.
