Biotech startups scoop £1.3bn in foreign capital

Nestled in the green, leafy triangle between London, Oxford and Cambridge sits the heart of a world-beating British industry.

Biopharmaceuticals and biotechnology, the sector that creates vaccines and drugs to treat ailments ranging from Covid-19 to cancer, credits many of its successes to two titans based in the UK.

In Cambridge sits AstraZeneca, a £158 billion giant that last year raked in £35 billion in sales and garnered global acclaim for its Covid-19 vaccine. And Brentford, West London is home to the global headquarters of GlaxoSmithKline, AstraZeneca’s main British rival with a value just shy of £54 billion.

Together, the two companies sit at the top of Britain’s sprawling pharmaceutical sector, which leverages the country’s academic and scientific pedigree to go toe-to-toe with its much bigger global rivals. But aside from the big hitters, the UK and the London Stock Exchange are awash with smaller firms working on medical breakthroughs.

The UK is estimated to have the third-biggest biopharma industry in the world, behind the US and China, despite their economies being at least four times larger. In Europe, Britain has the largest number of industry start-ups and manages to draw in the most investment cash for fledgling firms, according to the UK BioIndustry Association.

Booster: Britain’s top universities attract talent to push the industry forward

A BIA report showed that in the first quarter this year, UK biopharma firms raised £258 million from international venture capitalists, the most in Europe by far. Last year, the UK sector alone attracted a whopping £1.27 billion in international venture capital, around a third of the European total.

Among Britain’s innovative minnows is Chepstow-based Creo Medical, a maker of equipment for minimally invasive surgery, which says its products are changing the way bowel cancer is treated.

There is also Surrey-based Futura Medical, which is developing treatments for erectile dysfunction. The firm scored a major victory last week when it signed a deal for consumer health giant Haleon, the maker of Sensodyne toothpaste, to sell its MED3000 gel in the US.

Futura boss James Barder said that being a smaller biotech firm was often like being on a bicycle going uphill, with investors sometimes not appreciating the effort involved in creating new drugs on budgets much lower than those of established players.

‘The market sees the top of the bike and it sees it slowly going up the hill. What they don’t see is how hard we’re pedalling. There are huge amounts of work that need to be done to make these milestones,’ Barder said.

These views are echoed across the City. Analyst Edward Thomason at investment bank Liberum said: ‘The UK is a hotspot for life science innovation, and while many are quick to criticise the London market, it is a key stepping stone for companies in the field.’

And analyst Mark Brewer at investment bank FinnCap added that Britain’s world-class universities also helped to attract top tal- ent to push the industry forward.

Fledgling biopharma companies are among those in line to benefit from plans announced by the Government to encourage British pension funds to invest more in home-grown startups.

But stumbling blocks still remain for the industry. Earlier this year, AstraZeneca boss Pascal Soriot said the UK was ‘very unattractive for companies to invest’ in and warned it was difficult for firms to establish manufacturing bases here.

Regardless of some high-profile criticism, the numbers suggest the UK is still a world-class hub and a magnet for international investors.

This post first appeared on Dailymail.co.uk