‘World-leading’ biotech experts shine in region

Dr Martin Turner, head of policy and public affairs at the BioIndustry Association, said: “There are world-leading biotech companies across the UK, like Leeds-based Avacta, which has seen its share price rocket by over 500 per cent in the past year and Abingdon Health from York, which listed on the stock exchange for the first time in December raising £22m.

"In addition, there are hundreds of exciting biotech companies emerging from our universities, such as Rinri Therapeutics, a spin out from the University of Sheffield that is using stem cells to treat hearing loss.

“These companies have delivered for shareholders in 2020, but also provide the opportunity for people to invest in the development of new medicines that could one day save lives.”

The study revealed that 24 new American and 16 new European finance houses invested in the UK biotech sector for the first time, showing global recognition for UK innovation. 20 new UK institutional investors also entered the sector as other sectors of the economy were hit by the impacts of the pandemic.

BIA said the findings show the importance of including biotech and healthcare in investment portfolios as part of both risk management and growth strategies.

The analysis revealed the strong performance of the UK quoted biotech sector in 2020 with the combined share price of UK-quoted biotech companies rising 155 per cent over the year.

The sector had already been outperforming the market before the pandemic hit the UK and accelerated afterwards as other sectors declined.

Companies involved in diagnostics and Covid-19 treatments were the best performers (up 493 per cent and 475 per cent, respectively). Other sub-sectors including small molecule drug development (up 286 per cent), research tools and data (up 153 per cent) and cell and gene therapies (up 149 per cent) also performed exceptionally well.

The research showed that £1.14bn of fresh equity was raised by 51 individual companies, more than double the amount raised in 2018 and 2019 combined.

Steve Bates, chief executive of the BIA, said: “2020 was a year when biomedical innovation showed its true value, and it is great to see investors recognise that the UK has some of the best biotech companies in the world.

"Biotech and the broader healthcare sector are counter-cyclical in nature, meaning they can protect investors in periods of economic downturn and deliver asset growth due to the rapidly expanding global demand for better healthcare.

“With over £1bn of fresh capital invested in 2020, biotech companies on the London Stock Exchange are ready for growth in 2021 and beyond, meaning life-changing treatments can be delivered to patients sooner and investors can see the many different ways in which our sector can create value.”

Iain Daly, director and co-founder of Radnor Capital Partners, added: “The breadth and uniformity of biotech’s outperformance in 2020 has been especially notable.

"The pandemic has sharpened investors’ minds around the structural tailwinds behind biotech and this can be seen by every sub-sector within biotech outperforming the broader market and not just those companies with specific exposure to Covid-19 diagnostics and therapies.

"We can also see this through the increased level of investor participation, across the majority of investor types, in equity fundraising and secondary market trading.”