Steve Bates OBE
Expert commentary by Steve Bates OBE, CEO, UK BioIndustry Association
The UK’s vibrant life sciences SME community is a key driver of the economy that not only delivers scaling unicorns that will be world leaders in their own right, but also feeds innovation into some of the largest pharmaceutical companies in the world, underpinning their future value.
The biotech and pharmaceutical companies featured in this report are at the cutting-edge of science. Take Oxford Nanopore – its portable DNA sequencer has allowed the early detection of Ebola in the remotest parts of Africa; while Horizon Discovery is leading the world in gene editing. Plus, Midatech Pharma is using nanotechnology to improve chemotherapy. If that’s not inspiring, I don’t know what is.
These technologies take years to develop and require significant investment. Many biotech companies will spend the first five or more years of their existence in a pre-revenue state, conducting R&D fuelled by successive rounds of venture capital fundraises. Even when they IPO, they are often still pre-revenue or operating at a loss. This can make it hard to attract investment. It also means that the list presented in this report, which excludes pre-revenue companies, shows only a small proportion of Britain’s inspiring biotechs. These companies include: Sensyne Health, which is working with the NHS to use patient data to improve healthcare; Freeline Therapeutics, which has raised £122m in less than a year to finance its development of gene therapies; and the unicorn company BenevolentAI, which is using artificial intelligence to speed up drug discovery.
The UK’s biotech SMEs received an incredible £2.2bn investment in 2018, with half of that going into private businesses. Much of the investment came from overseas investors. Our latest data shows that momentum has continued in the first quarter of 2019. It shows that the UK Government’s industrial strategy is paying dividends as global investors flock to invest in UK innovation, jobs and growth in life sciences.
But British generalist and retail investors are missing out on the opportunity. Pension scheme savers especially are not benefiting from the real asset value growth that early-stage and scaling SMEs can deliver. There is welcome regulatory change and building momentum in the pensions industry that may reverse this risk-averse mentality, which is something that we must all support and play our part in delivering.
The success of the SMEs in this report, and many more, brings great health, social and economic benefits to the UK. There are still so many diseases without a cure, health inequalities to address and people in need of well-paid jobs. It is essential that we continue to support SMEs so they can deliver on these challenges.