A panel of life science investors raised concerns at the AngloNordic conference in London on 23 April that early-stage biotech companies are struggling to raise finance. Stephen Hansen, director of biopharma intelligence at BioCentury, cited data showing pre-clinical companies made up 41-42% of financings in 2021/22, but just 25% in 2025. He worried that a vital part of the biotech sector was being neglected in favour of clinical stage ventures, saying: "Somebody's got to be making companies.... If you're only investing in clinical there's got to be someone out there who's creating these assets."
Panellists argued the problem came down to current venture structures which, they said, were set up to provide backers with faster, less risky returns, and so favour clinical stage assets. Roel Bulthuis, managing partner at Syncona Ltd, warned that many funds were “deploying capital against a little strip of the market ... I don't think it's a good long-term strategy for our industry."
Hakan Goker, managing director of M Ventures, said he hoped it was a cyclical trend, explaining that "It's been quite tough to get the typical institutional investors into early stage company creation, companies that are still a little away from identifying exactly what it is that they're going to push into the clinic." Panellists agreed that the data suggested a lack of investment in seed and early stage programmes has been driven by the market, with an inherent bias to derisk investment when markets are bad.
The panel also discussed the trend for pharma to move towards larger markets and ‘blockbuster opportunities,’ and what this means for rare diseases. Lucy Edwardes Jones, life sciences investor at BGF Ltd, argued that there was an opportunity if early-stage biotech companies could use these smaller indications as proof-of-concept for larger ones. She cited neurology as an example: "We're seeing quite a lot of companies honing their initial focus on much smaller indications, so CMT, MSA, optic neuritis, and Huntington's, using all of those as a stepping-stone into the much larger pools."
The panel voiced more optimism about a new inflow of talent. According to Ms Edwardes Jones, US executives are actively chasing European opportunities at the moment, with many wanting to relocate. Allan Marchington, managing director at ICG Plc, joked: "We've got Donald Trump on our side, driving people over here quite rapidly, which is great." One panellist called them ‘political refugees’, and according to Dr Marchington: "Boston is not what it was five years ago. I mean, there's a lot of people there looking for jobs, and companies shutting down." Mr Bulthuis claimed that Americans brought a more dynamic mindset to the sector.
The panel ended with Mr Hansen revealing that figures from BioCentury's financing database showed the biotech sector had raised $1.2 trillion in total equity financing since 1994, with half of that figure appearing in just the last seven years. He wondered about new sources of financing to keep that momentum going. Maina Bhaman, of Sofinnova Partners SAS, suggested that, long term, investment could come from pension funds. "We definitely need the pension funds because there isn't enough traditional capital .... there's a real need to unlock that."
- By Janet Barrie