UK's biotech sector raised twice as much through IPOs in 2017 than 2016

Courtney Goldsmith
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The UK's biotech industry is poised for growth in 2018 (Source: Getty)

The UK’s biotech industry ended last year with a bang, having raised more than twice as much money through initial public offerings (IPOs) in 2017 than the previous year.

A report published today by the BioIndustry Association (BIA) and data firm Informa Pharma Intelligence found IPOs by UK biotech companies raised £234m last year compared with £105m in 2016.

About 90 per cent of the cash raised came through the tech-heavy Nasdaq exchange in the US rather than the London Stock Exchange or its junior market, though.

Read more: The UK could become a global leader in biotech - here's why

Two companies - Destiny Pharma and SkinBioTherapeutics - launched on London's Alternative Investment Market (Aim), raising £19.5m in 2017, while three others - Nightstar Therapeutics, Verona and NuCana - launched IPOs on Nasdaq, raising £214.9m.

The BIA said this showed global demand for UK business technology and innovation, and it stressed that these companies would not exist without the strength of UK-based venture capital and support in the early days of their development.

"The vibrancy of the UK ecosystem can be seen in the amount of UK-based technology and innovation that has spread across the world and this will be even more important as UK companies look to compete in a post-Brexit environment," the report said.

The report also described the UK biotech sector's clinical and pre-clinical pipelines as the biggest in Europe, which is a big step forward on the BIA's ambition to put the UK on the map as the third biggest hub for bioscience behind San Francisco and Boston in the US.

“The UK’s impressive preclinical and clinical pipeline shows the strength and capability of the UK biotech ecosystem to produce fantastic science that attracts talent and funding from across the globe," said Steve Bates, the chief executive of the BIA.

"There is money to be made as this pipeline develops. The Patient Capital Review means 2018 is the year UK pension funds will be nudged into backing this key sector of the future UK economy."

The aim of the review was to identify barriers innovative companies face in gaining access to long term finance.

“It is also very encouraging to see that UK biotech companies are scaling and maturing at pace, and the variety of funding options open to them means we can build the third global cluster in bioscience in the UK," Bates said.

Meanwhile, a wider report today by the London Stock Exchange found £2.4bn was raised in life sciences IPOs and follow-on funding in 2017, up 20 per cent from 2016. The life sciences sector includes biotech as well as pharmaceuticals and healthcare.

The bulk of that, £2.1bn, was driven by UK-listed life sciences companies returning to the market to raise capital.

Read more: French pharma giant Sanofi agrees to buy US biotech Bioverativ for $11.6bn

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