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Total equity financing reaching £2.1 billion, including a record £2.05 billion in venture capital, according to the latest data from the BioIndustry Association.
UK biotech financing hit a five-year high in the second quarter of the year, with total equity financing reaching £2.1 billion, including a record £2.05 billion in venture capital, according to the latest data from the BioIndustry Association (BIA).
The quarter was dominated by Isomorphic Labs’ landmark £1.6 billion Series B round, a major validation of the UK’s global leadership in AI-driven drug discovery. “This funding round is a massive vote of confidence from a diverse group of top-tier international investors in our AI-first approach to drug design and development,” said Isomorphic Labs founder and chief executive Demis Hassabis.
Even excluding this funding, UK biotech companies secured £498 million in venture capital during the second quarter, which is almost double the £279 million raised in Q2 last year.
Building on the positive momentum seen in Q1, the quarter has delivered the strongest quarter for UK biotech venture investment in the past five years.
The UK also strengthened its position as Europe’s leading biotech investment destination, accounting for 61% of Europe’s £3.3 billion venture capital total during the quarter.
Beyond the headline megadeal, the funding landscape became increasingly balanced. Seed investment remained resilient, with eight seed deals completed during the quarter and rounds averaging £6.4 million as companies bypassed smaller historic structures to raise substantial first financings. Series A- and B+-stage companies each raised £190 million and £225 million respectively, and the critical £10 million-£25 million funding bracket has seen a welcome uptick. Twice as many companies in the latter tier raised rounds in the first half of 2026 compared to the total recorded during the whole of 2025.
“This quarter shows continued improvement in funding confidence and deal flow right across the UK biotech sector. Its major headline is the strongest single quarter for UK life sciences venture funding in the last five years with over £2 billion in venture capital placed. It has seen fundraising rounds from Seed to Series D at world-class valuations,” said Chris Molloy, chief executive of BIA.
Public markets continue to lag
While UK public markets showed modest signs of improvement, they continued to trail the strength of private financing. Follow-on financing reached £58 million in the second quarter, a 61% increase from £36 million in the first quarter and significantly above the £15 million raised in Q2 last year. However, no UK biotech IPOs have occurred so far this year, and there was no follow-on activity by UK biotech companies listed on NASDAQ.
The report does, however, point to growing institutional support for the sector. Nest’s landmark £1 billion venture capital push for UK pension savers via the Schroders Capital UK Innovation LTAF will channel domestic capital into high-growth scale-ups. The British Business Bank has also deployed capital at an increased pace to venture funds. Its £25 million investment into Alchemab – its largest direct life sciences investment to date – is a similarly positive indicator for the sector.
That brought Alchemab’s total Series A funding to £109 million. Funds raised will accelerate the development of the company’s clinical pipeline and expand its antibody database from 500 million to more than one billion sequences.
“This investment provides further validation of the sustainable, long-term potential of our drug discovery platform and will enable us to further accelerate our pipeline of first-in-class antibody therapeutics for conditions with significant unmet need,” said Alchemab Therapeutics chief executive officer and co-founder Jane Osbourn.
Alongside Novartis’ $1.5 billion acquisition of Myricx Bio, these developments show a recovery in UK biotech financing supported by private investment and world-class valuations for UK science with important recyclable returns that can be reinvested into the next generation of companies.
“Our collective focus must be to ensure that this momentum is maintained and that the proven returns our investors are making attract more institutional investors to back this sector with growth capital. UK public markets need to recognise, cover and return to backing our sector and private momentum must be joined by robust, public sector-managed, investor-advised translational funding. This combination will de-risk the early-to-mid stage companies and sustain growth across every tier of the sector, making the whole of the UK fit to fund,” Molloy added.
