Venture capital vital to future of biotech
23 Jan 2018 by Evoluted New Media
The Association of the British Pharmaceutical Industry has released a report suggesting that pharma companies investing in emerging start-ups is now a key source of capital for biotech innovation in the UK.
In recent years, there has been a significant increase in corporate venture capital (CVC) investment in UK biotech. The amount of capital invested in this way into UK companies increased from an average $105m per year in 2008 – 2010 and rose to $647m in 2015, a more than six-fold increase. About 60% of financing rounds in 2016 included CVC.
Dr Shahid Hanif, Head of Health Data and Outcomes at the ABPI, said: "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 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."
By being prepared to invest early, take higher risks and stay in investments longer, CVC investors are a critical form of financial support for biotech start-ups at every stage of the company's development. However the report says 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. The evidence shows that CVC has a multiplier effect, acting as a magnet for other forms of investment.
Deborah Harland, Vice President and Partner at SR One – the CVC arm of GlaxoSmithKline and one of the top-ranked corporate investors in Europe – said:"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."
