The UK is at the forefront of life sciences innovation. Break through companies across the UK are creating cutting edge therapies, highly skilled jobs, and driving economic growth. But business and Government recognise that more still needs to be done to create stronger links between the life sciences and business community.
Large pharmaceutical companies, the likes of GlaxoSmithKline or AstraZeneca, may dominate the headlines and the attention of investors but the ground breaking work is often being done by growing and specialist firms. It is these companies that need our support if we are going to put the UK firmly on the global life sciences map.
The general pace of innovation taking place amongst these companies is astounding and we’re seeing biotech businesses look for funding. This is fuelling stock market listings and long-term investment in small and early stage biotech companies.
£2.4 billion was raised in IPO and follow on capital in the UK-listed life sciences sector in 2017, a 20 per cent increase compared to 2016. What’s more, funding was driven by companies returning to the market; over £2.1 billion was raised in follow on capital in 2017, a six fold increase compared to 2016.
Not only does this highlight long term investor appetite but London’s ability to finance life sciences’ company growth through access to deep, liquid pools of multicurrency capital and blue chip investors with expert knowledge of the sector.
Another trend we’ve seen in 2017 is the public market’s ability to support innovation. Two specialist investment vehicles, US-based fund BioPharma Credit, a closed ended investment company focused on the life sciences industry, and Arix Bioscience, a firm focusing on generating value from health and life sciences, listed on the Main Market raising respectively $762 million and £100 million. BioPharma Credit became the first London listed fund to specialise in debt financing for the life sciences sector.
The float of Novacyt SA, a French diagnostics group, on AIM in November 2017, also highlighted the continued appetite for international life sciences companies to list in London. The firm is rapidly growing and aims to become leader in developing new products for the infectious disease and oncology testing markets.
Equity funding is the right sort of capital for these companies, be that angel investment, crowd-funding, venture capital, private equity or a stock market listing. We believe these firms should be spending as much as they can on Research & Development.
But the UK public markets are just one of the many ways in which London Stock Exchange Group supports fast growing life sciences firms.
ELITE, LSEG’s business support and capital raising programme for high growth private businesses, helps companies better prepare and structure for external investment. A number of UK and international life science firms have already joined the global ELITE community.
Oxford-based radiology firm, Adaptix, which provides low radiation & 3-D imagining, and Midlands-based, life-saving regenerative medicine company, Celixir, are just a few examples of British life sciences businesses at the cutting edge of healthcare innovation.
The excitement in life sciences is palpable across the UK. The building blocks are there and now we have the opportunity to capitalise on this progress. London Stock Exchange is committed through ELITE and its public markets, such as AIM, to foster the growth of home-grown and international life sciences businesses. Together with UK business and Government, we will ensure the UK retains its allure across the international life sciences community.
Written by James Clark, Head of Tech & Life Sciences, London Stock Exchange
The One Nucleus blog is written by individuals and is not necessarily a reflection of the views held by One Nucleus.