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 A new report on Wednesday showed Britain was well ahead of rivals
like Germany, France and Switzerland in terms of the number of
experimental drugs in clinical development at early-stage biotech
firms.
British biotech companies also topped the charts in venture capital
financing, receiving more than a third of the total raised across
Europe and more than any other European country, the report by trade
group BioIndustry Association (BIA) found.
But there are serious challenges ahead, with sentiment cooling
toward biotech investments after a record stock market run that
peaked in 2015 and Britain's decision to leave the European Union by
2019 adding to anxiety.
"People, money, the future of science and medicines regulation are
the big issues of Brexit - and it is all happening in a challenging
timeframe," BIA chief executive Steve Bates told Reuters.
The BIA report showed a total of 1.13 billion pounds ($1.47 billion)
was raised by UK-based biotech companies in 2016, down from an
all-time high of 1.88 billion pounds in 2015.
Cash raised from initial public offerings (IPOs) was significantly
lower at 105 million pounds, down from 307 million in 2015, and five
out of the seven IPOs in 2016 happened before the EU referendum.
Venture capital funding, however, held up well, bolstered by inflows
from veteran fund manager Neil Woodford, whose funds invested nearly
half the 681 million pounds ploughed into the industry last year.
Significantly, Britain and non-EU member Switzerland accounted for
1.065 billion pounds of biotech venture funding in 2016, against 860
million for the rest of Europe combined.
Still, industry leaders are concerned at the potential loss of
pivotal investment from the European Investment Bank and its
European Investment Fund as a result of Brexit, leaving a funding
gap that may have to be filled from inside Britain.
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Another big Brexit worry is the future of drug regulation, with
Britain set to leave the European Medicines Agency network, creating
uncertainty over the approval of new medicines and the monitoring of
existing ones in Britain.
"We need clarity on how medicines regulation is going to work post-Brexit
and we would like to be closely aligned to the European system,"
Bates said.
Stricter immigration rules in Brexit Britain are a further headache
for industry executives and investors, given biotechnology's
reliance on global talent.
"Any Brexit settlement that limits our ability to recruit
entrepreneurial scientists, physicians and leading biotech
executives would have a devastating impact on the growth and success
of the UK biotech sector," said Kate Bingham, managing partner at SV
Health Investors.
(Editing by Mark Potter)
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