U.K. VC funding hits new high after bumper quarter

The British biotech sector enjoyed a big third quarter for VC financing. With more than £460 million ($600 million) in VC cash flowing into the bank accounts of U.K. biotechs, the sector has now raised 30% more money from public and private sources than it managed in all of last year. 

Trade group the UK BioIndustry Association (BIA) shared the data (PDF) in its quarterly update on the state of biotech financing in Britain. The BIA data show that British biotechs raised £732 million on public and private markets across June, July and August, bringing the total haul for the year up to £1.56 billion. Last year, the financing total topped out at £1.2 billion.

The VC figures compare favorably to recent history, too. Having raised £927 million in venture cash across the first eight months of 2018, British biotechs have already raised 80% more than in all of last year and 17% more than in 2015, the Immunocore-driven high point of U.K. VC funding. In a sign of how much U.K. biotech financing has changed in recent years, the amount of VC cash raised so far in 2018 is 30% more than the sector managed across 2012, 2013 and 2014, combined. 

This strong performance is built on sizable investments in multiple companies. Whereas the figures for 2015 were propped up by Immunocore’s megaround, this year has seen a wider range of biotechs pull in sizable sums. Orchard Therapeutics’ £115 million series C leads the way, but rounds from companies such as Freeline and BenevolentAI aren’t too far behind. 

Yet the figures also show how far the U.K. has to go. The BIA wants the U.K. to establish itself as a global biotech hub to rival the San Francisco Bay Area and Massachusetts. The U.K. has the scientific credentials to support a bid for a seat at the top table but, despite the progress of recent years, it is still some way behind the U.S. clusters on the financial front. 

Over the first half of 2018, biopharmas based in Massachusetts raised (PDF) $2.7 billion (£2.1 billion) from VCs. With the caveat that methodological variations make comparing VC data from different sources inexact, that suggests biopharmas in the state raised as much in six months as their U.K. counterparts did across 2016, 2017 and the first eight months of 2018.