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British biotech IPO funding dried up in 2022, report shows

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Copyright Thomson Reuters 2023
By Reuters
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By Natalie Grover

LONDON -British biotech share listings last year generated their worst annual haul since 2012, an industry report published on Thursday found, mirroring a global downturn in initial public offerings (IPOs) across the sector.

Only 28 million pounds ($34.7 million) - all in the first half of the year - was raised in IPOs by British biotech companies, the report from the UK BioIndustry Association (BIA) and insights company Clarivate showed.

By way of comparison, total funds raised from UK IPOs amounted to roughly £1.3 billion in 2021, £244 million in 2020, £64 million in 2019 and £432 million in 2018.

Funds raised by the sector from IPOs in the United States were similarly paltry last year, raising 1.4 billion pounds - 14% of the amount raised in 2021, the report said.

Year-on-year, the NASDAQ Biotech index was down 9.56%, a decline largely attributed to rising interest rates, fears of recession and geopolitical shockwaves, said Mike Ward, global head of thought leadership for life sciences & healthcare at Clarivate.

These macro-economic drivers saw investors pulling back from anything considered risky last year - so there was a big drop in financial support for biotech globally, he said.

"I don't think we've done worse than anywhere else," added Steve Bates, BIA CEO.

"What this shows is that there is no comparable UK or European market to pick up the slack when NASDAQ is closed. When NASDAQ is shut, the whole world of biotech feels the pain."

Overall, UK-headquartered public and private biotech companies raised roughly £1.8 billion last year, less than half the record £4.5 billion raised in 2021, the report also found.

Venture capital funding into the UK biotech sector, however, is a cause for optimism. About 1.2 billion pounds were raised via this channel of investment last year, the third best year ever recorded.

The BIA report covers the period from Dec. 1, 2021, to Nov. 30 last year.

($1 = 0.8066 pounds)

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