Life Science UK Trends
Life Sciences
As the international effects of Covid 19 start to fade, the life sciences industry is not going away. The institutional changes needed to guarantee that human health challenges and demands stay at the forefront will secure the ongoing need to generate new scientific breakthroughs.
“We're taking a deep dive into where investment and expansion is headed for the UK Life Sciences “
Monitoring how research and discovery are financed can allow us to predict future expansion. In 2022, a smaller amount was raised in the life sciences sector overall compared to the previous year, even taking into account corporate mergers and acquisitions, and venture capital (VC). Although 2021- during the pandemic- there was an unusually high quantity of capital raised.
If you look into performance on a city level, the United States is still doing significantly better than the UK.
Currently, venture capitalists are in a position where they have peak quantities of low-risk, highly liquid cash and securities, which comes after tens of billions was generated in the last two years. Meaning when an investment opportunity arises, they can immediately take advantage of it.
In recent times, environmental, social, and governance strategies have been integrated more heavily into the life sciences industry. Some programmes have begun by looking at the basics; asking laboratory workers to evaluate how they use their resources and supplies.
The UK administration released the Science & Technology Framework at the start of last month, outlining a clear strategy for the progression and development of these industries. Finance has been secured to back these initiatives and drive growth, which is a positive move in the right direction, however, the financing has to continue to increase in coming years if we are to get the UK to the position of ‘global leader’.
The Horizon Europe Guarantee programme, which safeguards research capital, has been prolonged until the end of June. Discussions are taking place in the near future which will clarify whether the EU and UK will continue to work together on scientific discovery projects. This promotes research outcomes and aids in the establishment and expansion of scientific businesses.
A reduction in tax relief last year was not well received, but a consultation session for R&D tax reform for small and medium businesses began in March, underscoring the importance of supporting small businesses to promote a healthy, growing scientific landscape.
Pharma
Interestingly, it is the pharma firms that are making significant corporate acquisitions. The primary focus points in their corporate strategies appear to be R&D investment, along with various M&A initiatives.
According to recent data, the top 10 pharmaceutical corporations spent $94 billion per year on R&D, 13% more than the average. During the same period, sales revenue increased by approximately 23%.
Lab Space
The 'golden triangle' market region has been experiencing an imbalance between restricted supply and rising demand for laboratory space.
Demand for lab space is frequently driven by organic growth from businesses. But the continuous lack of suitable lab space in central Oxford and Cambridge is likely to discourage developing lab companies from being based here.
The London lab market on the other hand is showing great signs of potential, with the suggestion that more life science companies are moving in there. GlaxoSmithKline has recently set up at the Earnshaw Building on New Oxford Street, which represents an upsurging enthusiasm from big pharma firms seeking to profit from London's expanding scientific landscape.
Life Science Manufacturing
About £260 million will be offered by the Life Science Innovative Manufacturing Fund. The goal of the funding is to: increase the availability and accessibility of NHS information for researchers, improve clinical trials by spending more on digital capabilities and bringing discoveries to market. £200 million of the total funds will be used to ensure these objectives are achieved.
An additional £60 million is on offer for organisations creating and innovating medical devices, diagnostics, and cell and gene treatments, to promote large-scale manufacturing initiatives. This will help to improve the UK's scientific potential.
In conclusion:
London, Oxford, and Cambridge had a cumulative occupancy of just under 1.4 million square feet of science-related real estate last year, the highest number seen between 2017 and 2022.
Although physical space used by life science companies increased in both London and Oxford, it decreased by 35% in Cambridge, which can be ascribed to a supply scarcity.
VC financing was looking healthy in 2022, with London seeing a 67% increase above the 2017-2022 annual trend. The three cities together raised a total of £2.4 billion, which is expected to convert into additional demand for available science-related space as these companies get bigger.
Things are expected to get harder as we move through 2023, mainly due to an increasingly aggressive financial market that is predicted to start showing its effects. Life Science companies may choose to reserve funds in the face of economic uncertainties, although London is regarded as a particularly robust global market.