Over a third of capital-hungry UK biotechnology companies have failed to raise money over the last 12 months.
A report carried out by the BioIndustry Association (BIA) in March found that 78% of respondents had found fund raising more difficult over the last year, with 47% of those looking for money unable to secure all they were after, and 37% unable to find any finance at all.
Dr Clive Dix, BIA Chairman, said: “In the current economic climate investors’ risk appetite has declined dramatically even for relatively small sums of finance. This is having a significant impact on many of the small and medium sized enterprises in the life sciences sector. The urgency of the problem must not be underestimated. If action is not taken, not only will the UK lose a world-class industry but the development of new therapies and treatments will slow, which will delay the delivery of much needed solutions for patients.”
Of those companies on the fund raising trail, 44% were looking for less than £1m, and 35% were chasing between £1m and £10m.
The most common response from biotech investors as to why they were reluctant to commit was that either the company or the sector was took risky, and this fear has meant a number of businesses have been forced to scrap or delay their plans and cut staffing numbers.
Dix continues: “The findings of this survey demonstrate that serious financial commitment is now needed from Government to support levels of fund raising up to £10m. As highlighted in the recent Bioscience Innovation and Growth Team Review and Refresh of Bioscience 2015 report, a Government-backed UK investment fund matching VC investment for early stage high tech companies would help to safeguard the future of the UK life sciences sector.”