The global biotech industry has an extraordinarily impact on science, healthcare, environment and the business. The British biotech industry has been under the spotlight during the COVID19 era highlighting the need for a homegrown vertically integrated biotechnology machine that designs, develops and manufactures new therapeutics. The UK, in our opinion, has emerged as a global leader in biotech innovation during the pandemic as it was instrumental in developing the first vaccine for COVID19 overcoming scientific, regulatory and manufacturing hurdles. The British government has also been supporting the biotech sector highlighting its significance in ‘Growing the bioeconomy: a national strategy to 2030’.
Over the last few years we have seen investors take an introspective look at their portfolios with a view to include biotechnology companies as part of the mix. Given the technical complexity of investing in biotech companies, we believe that technical due diligence coupled with commercialisation experience is important. Only a small number of retail funds have exposure to these opportunities b) have the technical experience to provide appropriate due diligence, c) and can provide industry connections to help industrialise the science. Consequently, some of these fledgling biotech companies went on to raise funds in the USA, creating a lost opportunity for UK investors.
At o2h Ventures, we are passionate about establishing a Biotech ecosystem that can source, assess, incubate and support investments through their pre-seed and seed rounds. We have established a biotech specialist fund at o2h Ventures focused on investing in exciting early-stage opportunities that can be nurtured in the UK biotech ecosystem and thus build a pipeline of innovative medicines and investment opportunities for later stage funds and pharmaceutical companies to invest into or acquire; while also providing investors with non-biotech background to invest in a biotech portfolio by leveraging our expertise and experience in performing due diligence on early-stage biotech newcos.
The UK government also provides a supportive regulatory environment for these early-stage companies to attract investors through their HMRC EIS (Enterprise Investment Scheme), Knowledge-intensive and R&D tax incentives. Biotech is a highly knowledge-intensive industry where innovation is the key to success for the companies and a significant factor for growth of Britain’s economy. Additionally, the UK government has made significant investments in the biotech sector in recent years, through initiatives such as the Biomedical Catalyst and the Industrial Strategy Challenge Fund.
During the current economic turbulence, the overall global sectors have been struggling in all aspects of business. We are optimistic that the tailwind Biotech sector got during the pandemic will hold the ground strong and will be a hot-bed for investors while accelerating drug discovery and impacting the lives of patients.
To conclude the above, we can concur that Britain has the potential to be a ‘Scientific Superpower’; we have world-class scientists and infrastructure along with strong academic grass roots. With the appropriate government intervention through further tax incentives, amending IPO listing rules in London, unlocking pensions for investing, and management training for our scientists, will only go to further make this a more attractive sector for investments.
Looking forward to the UK as the forerunner in a World Class Biotech industry, o2h Ventures will continue to support our existing portfolio companies whilst also investing in new exciting and innovative early-stage Biotech companies, and de-risking the investments by understanding areas of high interest to big pharma and then providing ‘hands-on’ support via team building, mentoring, fundraising, scientific support and seeking commercial partnerships.