At a time when the importance of the life sciences industry to our daily lives has never been clearer, the UK Government has been reported by the Financial Times to be looking to commit £200m to a fund to back life science startups and growth businesses. The report also stated that the fund could potentially be increased through a further tie-up with Mubadala, a UAE based state-owned investment company.
With the budget due to be announced on 3 March 2021, announcement of additional funding could provide a real boost to the UK life sciences industry, and ultimately lead to an increase in life science investments and M&A activity. The COVID-19 edition of our M&A Intelligence Report launched at the end of November 2020, showed that 10% of transactions in the period had been in the healthcare/life sciences sector but with the increase in adoption of telehealth in particular, it wouldn't be surprising if this percentage increases in 2021.
It isn't however, just the UK Government that is recognising the potential value in investing in life-science businesses. With four life science IPO's on the Alternative Investment Market (AIM) of the London Stock Exchange in Q4 of 2020 (Kooth, SourceBio International, Verici Dx and Abingdon Health) and a further life science entrant onto the AIM in 2021 (4Base Bio), equity markets in the UK have proved to be a positive source of funding in recent times.
Whatever the funding source, it seems like a fairly safe prediction that there will be increased investment and acquisition activity in the life sciences/healthcare sector in 2021.