Britain continues to dominate European biotech investment, says BIA

Its UK biotech financing 2025 report revealed that the country represented 30% of the continent’s finance total.

This was despite a year-on-year fall in venture capital input, equivalent to 13.2%. There was also a substantial drop in deal volume to 58 deals from 2024’s total of 111 deals.

However, nearly half the total capital raised in 2025 derived from just two transactions completed in the first quarter of the year, said the report.

“Landmark” investments in Isomorphic Labs and Verdiva Bio announced in Q1 accounted for 47% of the figure, resulting in an increase in average deal size from £18.7 million in 2024 to £30.8 million last year.

Acquisitions though, provided evidence of greater investment confidence with a notable contribution being MSD’s purchase of Verona Pharma at a price of £7.5 billion, “underscoring sustained international appetite for high?quality UK biotech”, said the BIA review.

Commenting on the news, the managing director of the BIA, Jane Wall, said:

“If 2024 was marked by a rebound, 2025 has been a year of caution and strategic maturation. While the headline venture capital figure of £1.79 billion represents a 13.2% decrease from the previous year, this figure belies a sector that is increasingly focused on high conviction in UK science.” 

The association noted that the sector’s prospects have benefitted from overall stock market performance, plus the recent British-American pharmaceutical trade deal.

Foreign investors had played a significant role over the 12 month period, it added: overseas institutions comprised more than two thirds (68%) of investors in UK Series A deals and 89% of investors in Series B+. 

But Wall said there was a need to encourage more UK investor interest in the biotech market too.

“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,” she stated.

Yet there was acknowledgement also of the value of recent government policy implementations designed to encourage what the BIA dubbed a “new era” of domestic capital deployment.

In particular, the organisation cited the Life Sciences Sector Plan, the Mansion House reforms and the first evidence of long-awaited pensions-supported investment – notably the financing of Draig Therapeutics and Aviva investment in Cambridge Innovation Capital.   

James Costine, CFO (UK) and finance partner of SV Health Investors, described the Mansion House Accord in particular as “a positive step in the right direction”. 

Implemented last year, the voluntary agreement involved major pension providers accounting for 90% of defined contribution (DC) pensions in the UK pledging a minimum 10% of DC funds into private commercial markets by the end of the decade.

Crucially, half of this figure – or 5% of total DC funds are earmarked specifically for the UK private market. Some estimates have suggested this would release an extra £50 billion into the economy.

“Not only will it provide domestic scale-up capital for the most promising UK-based companies, it should also help boost returns for UK pensioners to be more in line with those seen in the US and Canada,” said Costine.

Pic: Medicines Discovery Catapult