International investment in UK life sciences plummets 19 Jul 2023

Figures from the ninth annual life sciences competitiveness indicators (LSCIs) report show that in 2022 the UK saw a substantial drop in foreign investment in its life sciences, compared to 2021. It fell to £1 billion from £1.9 billion, a drop of 47%. This saw the UK move down to ninth out of 18 comparator countries in 2021, from second place in 2021.

The LSCIs report assesses the performance of the UK’s life sciences sector against comparator countries, with the latest edition providing data up to and including the years 2020 to 2022.

Government ministers George Freeman and Will Quince state in their foreword to the report that this fall should be considered in the wider international context, as the US also saw a steep decline in investment in 2022 compared to 2021.

Equity finance raised in 2022 also reduced to £3.3 billion, down from £7.2 billion in 2021. Alongside this there was a substantial drop in the number of initial public offerings (IPOs) and the associated amounts raised. In 2022, the UK raised £7.1 million through three IPOs, contrasting with £751.5 million over 11 IPOs in 2021. However, there were also declines in most of the comparator countries for the same period for wider economic reasons.

The government pointed out that in 2023 it has announced a raft of measures to support the industry, backed by £650 million of funding. However, the Association of the British Pharmaceutical Industry (ABPI) suggested that the jump in branded medicines clawback rates to 26.5% this year under the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) was exacerbating the investment problem by making the UK less attractive and competitive internationally.

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