Both the amount of equity financing and venture capital attracted by UK biotechs dropped in 2025, compounding concerns for the level of the country’s life science industry attractiveness on the international stage.
As per a report from the BioIndustry Association (BIA), a UK-based trade association, equity financing and venture capital dropped 49% and 13%, respectively, in 2025 compared to 2024. While the amount of biotech funding is down globally, concerns about the UK’s capital flow are heightened due to the high-level of scientific expertise in universities and early-stage companies.
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A separate report by the Association of the British Pharmaceutical Industry (ABPI) published in September 2025 said that the UK is at risk of losing its world-leading life sciences status due to investment being captured elsewhere on the international stage.
The total finance raised by UK biotechs was £1.9bn ($2.59bn) in 2025, down from £3.7bn ($5.05bn) in 2024, as per the BIA’s UK biotech financing report. Peak investment over the last five years came in 2021, buoyed by innovation in the Covid-19 treatment sector.
The lack of initial public offerings (IPOs) also reflects a year of restricted growth. As per the BIA, no UK biotechs went public in 2025, marking the third consecutive year without new listings. The number of IPOs in a sector is a signal of economic strength, investor confidence, and level of innovation.
In a foreword to the report, BIA’s managing director Jane Wall said: “The geopolitical landscape is precarious and the IPO window is entering its fifth year of restricted activity. Later-stage leads are still dominated by international capital, and the mandate for 2026 is clear: the UK Government must deliver to support a vital sector of the economy, and domestic investors must be encouraged to deploy here while we continue to welcome overseas capital.”
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By GlobalDataThere were positive signs that 2026 could herald a stronger biotech landscape. In March 2025, UK-based Isomorphic Labs raised $600m, with backing from Google, in its first external funding round as it pushes forward with artificial intelligence (AI)-driven drug discovery. Verdiva Bio, also UK-based, secured $410m in a Series A financing round to advance its suite of obesity drugs.
A surge in Q4 M&A deal activity reached its highest quarterly deal count of the year, signalling the start of a “revitalised appetite for our broader SME ecosystem,” according to Wall.
Indeed, this was marked at the start of 2026, when Amgen agreed to acquire Dark Blue Therapeutics in an $840m deal. UK-based biotech Dark Blue has developed a pipeline of oncology assets, including DBT 3757, an investigational myeloid/lymphoid leukaemia translocation 1 and 3 (MLLT1/3)-targeted protein degrader.
The pharmaceutical industry is critical to the UK Government’s long-term plans to boost the life sciences sector, contributing £17.6bn ($24.04bn) in direct gross value added (GVA) annually to the economy. However, major pharma players and ministers have often fallen short on alignment of commercial priorities. MSD, for example, called off plans for a £1bn ($1.36bn) expansion in London in September 2025.
The recent trade deal agreed with the US could also act as a growth catalyst in the UK’s life sciences sector. In December 2025, the UK became the first country to strike a zero-rate deal on pharmaceuticals imported into the US. The BIA says that £5bn ($6.83bn) in trade is protected as a result of the deal.
BMS’s CEO, Chris Boerner, said the company anticipates being able to invest upwards of $500m over the next five years in the UK on the back of government commitments and increased investment in innovative medicines.
Reacting to the deal, Edita Hamzic, healthcare analyst at GlobalData, said: “Zero-tariff access to the US, combined with more predictable and generous domestic pricing, gives the UK a rare structural advantage in attracting early launches, clinical trials, and high-value manufacturing.”
Hall concluded in the BIA report: “The blueprints for growth are now laid; our task is to ensure that the “sticky” capital currently on the sidelines is activated to support the next generation of UK start-ups and scale-ups.”
