Ripple from U.S. biotech boom drives U.K. life sci funding to 10-year high

More evidence has emerged that the ripples emanating out of the U.S. biotech boom are raising boats on the other side of the Atlantic. The latest data come from the UK Bioindustry Association (BIA) and Evaluate, which calculated that life science funding in the United Kingdom is at its highest level in at least a decade.

BIA CEO Steve Bates

The data corroborate figures for IPOs and VC funding that were tallied up by different groups earlier in the year. According to BIA and Evaluate, a research organization, the amount raised in life science IPOs in the U.K. rocketed by around 700% last year, The Financial Times reports. The performance means that 2014 accounted for more than two-fifths of all money raised in U.K. biotech IPOs over the past decade. One caveat is the distribution of the IPO money. Strip Circassia Pharmaceuticals' (LSE:CIR) monster IPO from the data and the performance is somewhat less impressive.

Beneath Circassia, 8 other companies shared around half of the total IPO haul for the year, a sum that still represents a jump on the amount raised in 2013. BIA CEO Steve Bates sees reason for optimism in the numbers. "Companies are able to go public--perhaps fewer in number than in the past but better capitalized, with enough money to succeed rather than just enough to fail," he said. Further down the food chain, VC funding rose 71% year-on-year to hit a 10-year high of $430 million (€388 million). Other sources have reached different totals but all agree funding jumped last year.

The bumper year took the U.K.'s total haul for the past decade to $2.4 billion. To put that figure in context, it is 7% if the amount raised in the U.S. over the same period. While the U.K. is never likely to near the U.S. in terms of total VC money invested, as it stands it is barely holding its own against individual companies. The $450 million round closed by Moderna Therapeutics in January was bigger than the U.K.'s total haul for 2014. In the 2.5 years since emerging from stealth mode, Moderna has raised $600 million, 25% of what the U.K. biotech industry managed over all of the past decade.

BIA knows this is a problem and has set its sights on attracting £1 billion a year in VC cash by 2025. Part of the plan is to lobby for the lifting of restrictions on the ability of nonprofits and pension funds to invest in private biotechs. Others, from Neil Woodford to the Mayor of London, are also working to increase availability to capital but the data show the U.K. has a long way to go before it can fulfill its aspiration to be a biotech hub to rival those in California and Massachusetts.

- read the FT article