The UK life sciences raised £1.23 billion ($1.65 billion) in venture capital investment in the first half of 2025, putting it on course to at least match the 2024 total for the full year.
That’s the top-line finding of the latest financing report from the UK BioIndustry Association (BIA), which reveals that there was a significant dip in funding in the second quarter at £344 million – down from £881 million in the first three months of the year.
However, it followed an “exceptional” first quarter that was swelled by two very large deals, including artificial intelligence specialist Isomorphic Labs‘ £449 million first round and a £327 million debut for obesity player Verdiva Bio.
It’s worth noting that the tally comes against a backdrop of a more conservative biotech financing environment around the world, with US biotech funding declining 24% quarter-on-quarter to £3.96 billion, and European funding falling 40% to £1.23 billion between April and the end of June.
The last three months saw a couple of sizeable rounds – for neuropsychiatric disorder therapy company Draig Therapeutics (£107 million) and cancer drug developer CellCentric (£90.3 million) – which BIA said “communicate continuing dynamism in the sector.”
BIA chief executive Steve Bates also pointed to MSD’s £10 billion acquisition of Verona Pharma and Sanofi’s acquisition of Vicebio for £1.15 billion, which both occurred after the end of the second quarter, saying they “show that global pharmaceutical companies continue to look to the UK’s innovative life sciences ecosystem to acquire future products.”
The UK remained Europe’s top biotech investment destination in the second quarter, accounting for more than a quarter (28%) of the total venture capital raised in the region.
On the other hand, Dr Martin Turner, BIA’s director of policy and external affairs, pointed out that the influx in venture capital investment was, on the whole, not coming from UK investors – something that has been highlighted as a major issue to be addressed in the UK government’s recently published plan to become the leading life sciences power in Europe by 2030.
One of the pillars of the strategy is government help for companies trying to raise investment and grow in the UK market. That includes the British Business Bank’s (BBB) British Growth Partnership, which seeks to crowd in pension fund capital into the UK’s high-growth businesses.
“We are observing a structural evolution in the funding environment, as the Mansion House agenda is being turned from a government policy agenda to practical funding vehicles for scaling companies by key institutions,” said Dr Turner.
“This provides new routes for UK investors, including pension savers, to access and benefit from exciting innovative companies, if they seize the opportunity.”
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