The BIA’s UK CEO and Investor Forum, held at Down Hall in Hertfordshire on 10-11 July, was bigger than ever with more than 90 senior sector attendees. In the second of three posts, the BIA reflects on some key themes from the event.
From an analysis of the funding environment, case studies of recent fundraisings and the public markets, financing of bioscience companies in the UK was top of the agenda at the BIA’s UK CEO and Investor Forum.
The main conference opened with Biolauncher’s Rowan Gardner providing an analysis of life science funding in the UK. Rowan highlighted some recent trends – noting that the UK is (a distant) second only to the US in terms of capital investment. Rowan also suggested some solutions for building a strong sustainable future. These included starting more companies, developing entrepreneurs and talent, and diversification of the funding base.
The BIA’s chairman-designate Ed Hodgkin led a session looking at some recent fundraisings in the sector. The discussions included how to create sustainable companies, accessing the public markets and who the current sector investors are. As the number of bioscience IPOs in the US increases delegates were interested to understand when access to the public markets in the UK might re-open. There was a feeling that there needed to be more investors with an interest in the sector – UK fund managers are not attending medical conferences like their US equivalents and banks will not invest in life sciences analysts unless they have listed companies to analyse. There were questions around how to get generalist investors interested in the sector and whether government should act to stimulate the market or if it should be left to market forces. It was noted that if there is a cohort of companies that come to the market they will need to offer good propositions to reassure investors.
Allan Marchington, Apposite Capital and BIA Board member, led a discussion around some of the new funding initiatives in the sector. Chris Hollowood, of Syncona Partners, said there is less capital available now and that funds are operating on a variety of different models. He said that companies are increasingly realising that they need to take the money from the ‘right place’. The BIA’s Steve Bates said that one of the reasons the US biotech sector took off was the change in investing rules for US pension funds instigated by Ronald Reagan and he wondered how the risk appetite of UK pension funds could be changed.
Steve Bates, BIA’s Chief Executive Officer, led a session which considered the finance journey for a company from formation to the market. Simon Kerry of Karus Therapeutics and the Angels for Life Sciences group, said biotech companies raising money from angels find it difficult to compete with other sectors. He noted that the Biomedical Catalyst recipients are interesting to angel investors as they demonstrate that they have already attracted funds and had their projects examined by experts. Elevate Capital’s Paul Toon said crowd-funding is very interesting at the moment and that while it is easy to see the passion people have there is a need to have a platform to harness this. He suggested that the BIA’s Citizens’ Innovation Funds proposal could deliver this. Helen Kuhlman of the Technology Strategy Board outlined some of the agency’s programmes, including the Biomedical Catalyst, which aim to incentivise others and help companies bridge funding gaps. GW Pharma’s Justin Gover, suggested companies consider the US market for a listing as US investors are interested in foreign companies and will also look at binary investments and big risks.
Despite the challenges noted by Rowan and the closed public markets, there was a general feeling that the funding environment for biotech companies – at all stages – has improved in the past couple of years and that it is likely to develop further in future.