Backing innovation in British biotechnology 2 May 2023
What is the future for UK-based biotechnology? This article reviews the financing of, and governmental support for, the sector and considers the potential impact of new technology in the development of the life sciences.
According to the BioIndustry Association’s (BIA) Financing Report for 2022 – published in January 2023 – backing for the UK’s life sciences and biotech sector totalled £1,785 million in 2022. This was the fifth highest amount ever achieved and comprised £1,210 million in venture capital, other public financing of £547 million and Initial Public Offerings (IPOs) of just £28 million. Following a record year of investment in 2021 (£4,506 million raised), investors pulled back in 2022 and there were few new launches.
However, the UK kept its place as the leading European location for biotech, taking more than 33% of the venture capital raised across the continent.
A few companies achieved healthy seed funding despite the more difficult trading environment, Constructive Bio leading the way with a £12.3 million investment in its synthetic genome programme.
Grant funding for research and development (R&D) in UK biotechs totalled over £87 million in 2022, most of which came from the government’s Innovate UK, part of UK Research and Innovation. This was significantly higher than the £59 million awarded in 2021, with the average grant value reaching twice that of 2021.
Looking at patents, the UK had the highest percentage of inventions related to pharmaceuticals compared to its competitors, at 11.8%, with the US at 9.3%, rest of Europe 7.4% and mainland China at 4.3%, for the period 2010-2021.
Moving into 2023, the government continues to back the UK’s strong R&D environment, with the UK Science and Technology Framework – published on 6 March 2023 – setting out the path to make the UK a ‘science and technology superpower by 2030’.
Grants have also been provided under the Life Sciences Innovative Manufacturing Fund (LSIMF), for the expansion of four companies, with £277 million from government and private investment announced on 28 March 2023. Under this programme, Ipsen will receive £75 million for neurological treatments, Pharmaron gets £151 million to increase production of gene therapy and vaccine components, Touchlight receives £14 million for DNA manufacture, while Randox gains £36 million for antibodies used in diagnostic tests.
Further backing for innovative therapies comes with £10 million awarded to the Medicines and Healthcare products Regulatory Agency (MHRA) in March 2023 to accelerate regulatory processes and approvals for new medicines and medical technologies.
Other recent investments include almost £10 million from the government for a new Clinical Biotechnology Centre (CBC) facility in Bristol, which opened on 18 April 2023. It will support the growth of the country’s cell and gene therapy industry by making products for early-phase clinical trials and pre-clinical work. It expands the network of Gene Therapy Innovation Hubs announced in 2020, set up with funding from the Medical Research Council (MRC) and research charity LifeArc.
Funding for start-ups
Innovate UK remains active in supporting biotech start-ups, providing £2 million from its Biomedical Catalyst fund in April 2023 for Maxion Therapeutics to develop antibodies for treating autoimmune diseases with high unmet clinical need. In February the company announced that it had received £13 million Series A financing from LifeArc Ventures, Monograph Capital and BGF.
Vitarka Therapeutics also secured £1.27 million in April from venture capitalists SOSV, the UK Innovation & Science Seed Fund (UK12S), along with grant funding from Innovate UK. The firm is developing combination medicines with RNAi therapies and a non-viral drug delivery technology.
How does the future look for biotech development? Alongside the science, Artificial intelligence (AI) and machine learning (ML) are increasingly impacting drug discovery. These tools are evolving to predict which drug candidates will work in humans – offering a new direction away from costly clinical trials and animal testing. Precedence Research estimates that the global AI in healthcare market will be worth over $187.95 billion by 2030.
Beyond this, the UK government has long seen the value in developing the power of quantum computing, having established the first National Quantum Technologies Programme in 2014. In March 2023 it committed to further support for this field – amounting to £2.5 billion in the coming decade – and publishing a 10-year plan called the National Quantum Strategy. The hope is that many challenges beyond the capability of regular computers could be solved by quantum processing, including those in the life sciences. However, as with AI applications, safeguards need to be put in place to manage its expansion responsibly.
Globally, wars, unrest and economic issues are impacting biotech funding, but money – and regulatory and strategic support – are available for truly innovative products.