A new report released by the BioIndustry Association (BIA) has found that the UK is likely on track to post its best year since 2021 for biotech venture capital (VC) acquisition – pointing to the continued recovery of the sector following a challenging period.
As per the report, the total equity raised by UK biotech shot up 113% year-on-year, rising from £198m in Q3 2025 to £421m ($563m) during the same period in 2026. Meanwhile, the amount of VC raised also jumped, with British biotechs landing £270m ($361m) – up 44% from Q3 2025.
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While the total VC raised in Q3 was considerably lower than the £2.05bn raised in Q2 – a quarter primarily buoyed by Isomorphic Labs’ £1.6bn Series B – the BIA says this drop was in line with broader UK venture investment trends, as VC from all sectors flowing into the country fell by $3.2bn.
With £270m of VC in the bag in Q3, the UK biotech sector has already raised a record-breaking £2.8bn, which represents more than any full year between 2022 and 2025. The headline deal during this period was secured by artificial intelligence (AI)-powered biotech Basecamp Research that raised $104m in a Series C to train its next-generation models and progress its pipeline of medicines towards the clinic.
These figures maintain Britain’s status as the top place Europe for VC investment, with the nation raising 26% of the total across Europe, which stood at £1.1bn overall. This comes as tech giant NVIDIA also forges further partnerships with UK-based AI biology companies – highlighting theregion’s prime role on the global collaboration stage.
Acquisitions trump funding
As the British life sciences funding scene looks to get back to winning ways, M&A has already seen notable success so far in 2026. Earlier this week, Merck KGaA agreed to buy Silence Therapeutics for $1.3bn, a London-based biotech developing short interfering RNA (siRNA) therapies.
The deal continued a positive trend for British biotech exits. Earlier this year in January, Amgen acquired Dark Blue Therapeutics for up to $840m, with Eli Lilly then purchasing sleep drug biotech Centessa Pharmaceuticals for $6.3bn in June. In July, Novartis outlaid $1.5bn to buy antibody-drug conjugate (ADC) developer Myricx Bio.
BIA CEO Chris Molley told Pharmaceutical Technology: “This report demonstrates success in VC as well as covering recent acquisitions in Q2, such as Myricx. Both VC and M&A show world class valuations can be secured by companies. Isomophic and CellCentric are some of the examples of this in VC. What we report here is that in the majority of cases the money for both comes from outside the UK. Our belief is that UK investors should be making up – and taking home – more of the pie.”
Allocating funds to UK innovation
While the BIA heralds 2026 thus far as a positive year for the British life sciences sector, the Molloy noted in a statement that new steps need to be taken for continued success.
“The pattern this year is clear: UK science attracts expert global capital, but we are missing an opportunity to see returns recycled in our own ecosystem, because too few British investors are taking part,” Molloy commented, adding that the government should play a key role in creating the right environment through incentives to help UK biotechs access the financing they need to grow.
“Government can enable UK biotech companies to make the most of that increased investment and drive economic activity in the UK, if they have preferential access to UK R&D infrastructure and are supported by a tax system, with enhanced R&D tax credits and incentives for reinvestment at its core,” Molloy commented.
