It’s my great delight to report that the UK biotech sector is going from strength to strength. Those working in our innovative science parks know first-hand the incredible science and research base at our disposal. The UK continues to be at the forefront of pioneering new medical advances, such as cell and gene therapies, genomics and the benefits being delivered through digital innovation.
The UK biotech and life sciences sector continue to drive investment into the wider UK economy. Our sector generates an annual turnover of £73.8 billion, supports 482,000 jobs two thirds of which are outside London and the South East, and consists of almost 5,900 companies, 80% of which are SMEs. The jobs the sector provides are high skilled and well paid and support many other jobs across wider supply chains.
To meet the sector’s ambition, we require impetus from both government and the private sector. The Life Sciences Industrial Strategy is bearing fruit. Since becoming Prime Minister, Boris Johnson has been making the right noises about the future prosperity of the sector and has announced several new initiatives.
The Government has committed to the fastest ever increase in public R&D investment and to raising overall R&D investment from 1.69% of GDP to 2.4% by 2027. The Conservative’s promised before the 2019 general election to create a £200m scale-up fund for small biotech businesses and they announced the world’s largest genomics project to deliver the whole genome sequencing of all 500,000 UK Biobank participants.
The UK is not alone in recognising life sciences as an industry of the future; both the United States and China, among many others, are committing considerable public investment to support their life sciences sectors. The UK sector is the clear leader in Europe and continues to challenge the dominant clusters in California and Massachusetts.
Despite 2019 being a difficult year for global financial markets, particularly with the uncertainty caused by Brexit and the US-China trade war, UK biotech recorded its third highest year for investment, with £1.3bn raised by UK-based biotech companies in 2019.
With five consecutive years of raising over £1billion and a 400% increase in investments since 2012, the sector is in a very strong position heading into a new decade. It’s clear that UK biotech companies remain an attractive investment opportunity for global investors, meaning there’s a greater diversity of capital than we saw five years ago.
This welcome long-term growth has cemented the UK’s position as the third global life sciences cluster. UK companies are becoming more successful in securing the scale of capital required to finance their growth as the sector matures and more companies move their products closer to market.
We continued to see large UK venture rounds in 2019, with three UK biotechs raising above £50m each, which was almost unheard of prior to 2015. Two of those companies, Achilles Therapeutics (£100m) and Gyroscope Therapeutics (£50.4m) are headquartered at the Stevenage Bioscience Catalyst, demonstrating that science parks are providing a critical platform for companies to mature, grow and attract new investment.
While the diversity of global investors is welcome, the Government’s commitment to unlock long-term capital held in the UK’s pension funds to support sciences commercialisation is yet to bear fruit and the BIA will remain an active participant making that a reality. Diversifying the domestic life sciences investor base is critical to the long-term resilience of our sector. Science parks have a distinct advantage if this flow of capital comes on-stream, as physical property is an attractive long-term investment for pension funds.
As well as UK pension funds, government efforts to leverage new scale-up capital through the British Business Bank should be stepped up, as should grant funding for early-stage companies through the Biomedical Catalyst, which data shows generates £4.72 in public and business value for every £1 invested by government.
The BIA is proud to have several science parks in our membership, situated in all nations and regions of the UK. Science parks are platforms for innovation, providing companies with state-of-the-art equipment and facilities they need to grow their therapy pipelines.
As we embark into the new decade the UK biotech sector continues to chart an ambitious global path, which science parks and the wider ecosystem will play a crucial part in.
Steve Bates OBE, Chief Executive of the BioIndustry Association (BIA)