ABPI research shows a six-fold increase in CVC investment in UK biotech

The Association of the British Pharmaceutical Industry (ABPI) has released research showing that the amount of capital invested alongside corporate venture capital (CVC) in UK biotech increased six-fold between 2010 and 2015.

Key findings from the report, ‘The rise of Corporate Venture Capital investment in UK biotech’, were that during 2015 financing rounds involving CVC amounted to $647 million out of $1033 million invested in UK life sciences companies; and UK companies closed 68% of European financing rounds involving CVC in 2016.

CVC investment in UK biotech has increased significantly in recent years with the amount of capital invested into UK companies rising on average from $105 million per year in 2008 to $647 million in 2015. Additionally, the ABPI reports that about 60% of financing rounds in 2016 included CVC.

Deborah Harland, vice president and partner at SR One — the CVC arm of GlaxoSmithKline and one of the top-ranked corporate investors in Europe – authored the foreword to the report and said: “This report highlights the acceleration of corporate equity investing in European biotech over the last decade, and most notably the growth observed in the UK.

“There is a clear opportunity to consider how best to establish the UK as the preferred location for corporates investing in Europe, secure continued growth of CVC as a funding source for early-stage biotech companies and enable the translation of a broader footprint of innovative science into potential new medicines.”

“The UK is an attractive destination for investment in the biotech industry and has a strong reputation in life sciences as a global centre of scientific excellence, second only to the US as a country. The UK is first within Europe,” commented Dr Shahid Hanif, head of Health Data and Outcomes. “Compared with the rest of Europe, CVC investors view the UK as offering better access to experienced senior management as well as to specialist drug discovery and development experts, thanks to the historic presence and links with large pharma companies.

The report stated that action needs to be taken by industry, the research community and government to encourage CVC investors to develop a presence in the UK and to strengthen capacity and networks. Evidence published in the report demonstrated that CVC has a multiplier effect, acting as a magnet for other forms of investment.

“The UK has the potential to become a global leader in the biotech market with CVC investment as a critical form of funding to enable new start-ups to emerge and develop,” added Hanif.