Biotech & Healthcare
Advances in medical science and continued investment in R&D are driving the UK’s biomedical and healthcare industry.
Whether carrying out clinical trials or researching cures, the people behind the industry make a real contribution to society. On a financial level, they also play a big role in boosting the UK’s economy. In 2013–14, industry revenue is set to increase by 2.1 per cent to £7.8 billion – a compound rate of 3.9 per cent since 2009. The nation’s ageing population and, in some cases, declining health are generating a big demand for pharmaceuticals and attracting more investment into the industry.
Sector at a glance
£93.2 million – The amount the UK Government is investing in the health sector to finance biomedical research
£12.2 billion – Cambridge is home to one of the world’s fastest-growing biotech clusters; 1,535 companies generate £12.2 billion in revenue
Invesco Fund Managers’ Neil Woodford is one of the UK biotech sector’s biggest investors. He’s backed e-Therapeutics plc, Retroscreen Virology Group plc and Oxford Nanopore Technologies
Biotech & Healthcare and the economy
Like most sectors featured in this report, biotech and healthcare experienced its biggest rise in revenues in 2010. That year, companies reported a staggering 84.3 per cent average increase. Then, revenue growth hit 39.7 per cent and 23.4 per cent in 2011 and 2012 respectively.
Companies that research and develop new cures and treatments for various ailments and diseases are in big demand. As such, biotech and healthcare is considered one of the main industries driving the UK economy.
"The UK is one of the best places in the world for life sciences, on a par with premier life science destinations such as Boston, San Francisco, San Diego and Singapore," says the BioIndustry Association. "We have four of the top 10 universities in the world, 19 of the top 100 universities, one of the world’s three major financial centres, a stable of quality service providers, world-class charitable supporters of the industry and a rich heritage of globally recognised medical research."
Nursing the economy back to full health
Commentary by Steve Bates, CEO, BioIndustry Association
The UK has one of the largest and most productive life sciences clusters in the world. It has been a source of growth for investors and for the UK economy in the past and its knowledge-rich, research-intensive make-up will ensure this continues. The UK has world-leading research universities (six of the top 20, according to a recent count), committed public funders, medical research charities, investors and companies both large and small. Moreover, and often overlooked, we have expertise within service providers – be they contract manufacturers skilled in scaling up complex drug candidates, intellectual property specialists or companies with regulatory expertise.
The Government is quite right to identify the sector as a source of future growth with the Strategy for UK Life Sciences. Government grant-funding schemes provide valuable translational capital and a positive tax and fiscal environment ensures the UK is one of the most competitive places to start a business.
"The UK has world-leading research universities, committed public funders, medical research charities and investors"
With an ageing society and an increase in chronic conditions such as diabetes and heart disease, the need for new and more targeted, or personalised, therapies is as great as it ever was. And small companies will be the source of much of the new innovations in medicines and technologies to improve patient outcomes.
I am often struck by the depth and breadth of this research, whether it is novel approaches to drug delivery, tackling anti-microbial resistance or world-leading stem cell or gene-based therapies. Many of these companies have dependable and skilled management teams and make for robust investable propositions. It would be well worth investors supporting such companies to access the public markets and scale up their activities here in the UK.
Healthcare, and specifically life science, companies have performed far better in recent times than perception would suggest, providing investors with returns. In the US, with the IPO window well and truly open, we have seen biotech stock return more than 40 per cent since the start of 2013. And here in the UK, the best-performing share on AIM in 2012 was for an innovative biotech company developing DNA-based cancer vaccines – Scancell.
It is my hope that some of the enthusiasm for biotech can be found here in the UK. I firmly believe British SMEs remain right at the cutting edge of healthcare innovations and the more we shine a light on this excellence, the more investment and growth will follow.