Strong performances within the UK’s booming life sciences sector is attracting record levels of venture capital investment, according to new figures from London & Partners, the Mayor’s promotional company for London
Data compiled by L&P from CB Insights shows that $713m of venture capital was invested in the life sciences sector in 2014, up from $503.89 in 2013 – a jump of 41%.
The majority of the funding is invested in companies in the London-Oxford-Cambridge ‘golden triangle’, with the region attracting $502.64m in 2014, up from $437.23m in 2013.
The news was welcomed by Kate Bingham, Managing Partner at leading life sciences venture capital firm SV Life Sciences, who said:
“The UK biotech sector is coming of age. There are a lot of very exciting new companies conducting highly innovative and nimble R&D programmes to tackle some of our toughest diseases such as cancer, infection, inflammation and pain, and demonstrating some spectacular clinical data in early patient trials. SVLS portfolio companies have successfully raised significant sums from VCs, strategic investors, charities and the biomedical catalyst to fund their leading edge development of new medicines.”
Companies raising significant VC funding in 2014 include Oxford-based AdaptImmune, which raised $104m from US venture capital funds in September to push forward its work to improve the cancer-killing properties of the body’s white blood cells. The fundraising followed an announcement by the company in June of a partnership with GlaxoSmithKline worth up to $350m to develop new cancer drugs.
London’s Cell Medica also demonstrated investors’ enthusiasm for immunotherapies by raising $78m to support work to target cancer and infectious diseases using the body’s immune system. Gregg Sando, CEO and founder of Cell Medica, says:
“The UK has always enjoyed a world class research base for the development of innovative medicines and now we are seeing a core group of investors and grant bodies starting to emerge who are willing to commit significant capital to enable these new discoveries to come to market through UK based companies.”
Dr Eliot Forster, Executive Chair of MedCity, launched in April 2014 to grow the life sciences cluster of London and the greater south east, adds:
“A healthy, growing life sciences sector is critical to a nation’s economic and social well-being, and the UK needs to nurture an environment that supports the companies already present and attracts others from around the world to set up here. Liquidity is key to growing a strong, diverse set of life sciences clusters, so this rise in VC investment is very good news indeed.”
MedCity also aims to significantly increase the level of angel investment available to life sciences companies through the launch of Angels in MedCity – an initiative to highlight opportunities in the sector to both new investors and experienced investors with little or no experience of life sciences. UK angels invest two to three times more than venture capitalists in early stage companies, but only a small proportion of that is currently focused on healthcare and life sciences.
The new programme aims to improve the profile of life sciences by following the highly successful Angels in the City model, which has nurtured around 300 new investors and raised over £30m of new funding since 2011.
Dr Forster says:
“Life sciences companies are already generating significant returns for investors and the sector is set to continue to perform strongly in the coming year. There is a huge amount of interest from investors who are not experts but recognise the momentum we are building up and want to be part of it. Each funding stream has its advantages, and early stage companies are being increasingly creative about pulling in funding from a variety of avenues.”
The latest VC investment figures confirm predictions made by the BioIndustry Association and EY at the launch of their October State of the Nation report that 2014 would be a “banner year” for UK life sciences. The report found that total innovation capital for the first half of 2014 surpassed the figure for the whole of 2013. It also showed that the UK remains the largest bioscience cluster in Europe, developing 450 product candidates in 2013.*
*Fundamental Strengths of the UK Ecosystem: State of the Nation 2014 – BioIndustry Association and EY