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Ageing Population Drives Growth in Biotech Venture Capital Investment

Pharma and biotech firms have attracted well over $19bn (£14.4bn) in venture capital investment worldwide this year, considerably more than was recorded over the whole of 2017.

That is according to a quarterly update from KPMG, which said interest in the healthcare sector was being driven by awareness of the growing needs of an ageing population.

UK investment was particularly strong, with the £111m raised by London-based biotech firm Orchard Therapeutics to treat rare immune system diseases one of the biggest deals recorded.

KPMG’s head of innovative startup practice, Patrick Imbach, said investors would continue looking at firms working to understand the cause of diseases and genetic factors behind them.

“With the population in the UK getting older, it is expected that biotech will continue to be a big bet for the foreseeable future as companies look to find ways to treat and prevent different diseases,” he added.

Total global venture capital investment had reached $183.3bn by the end of September, beating the $171bn for 2017, but falling from the $73bn invested over the previous three months.

Asia accounted for eight of the top 10 deals in the latest quarter, although there was a considerable drop in total investment across the region, falling from $37.9bn in the previous three months to $17.6bn. Investment of $27.86bn in the US kept pace with the $27.6bn recorded in the second quarter of this year, with the urban mobility and autonomous vehicle sectors particularly hot. The UK accounted for around $1.9bn of the $5.2bn invested across Europe, attracting more than double the $836.84m recorded by its closest European competitor Germany. Meanwhile Latin America and Canada saw strong performances across fewer deals, with $4bn raised from 462 transactions in the latest quarter, compared with $3bn from 624 in 2017.

“Q3'18 also saw a resurgence in IPO activity globally,” said KPMG US partner, Brian Hughes. “As the IPO market continues to deliver strong returns to investors, we should expect to see further IPO activity in coming quarters.”


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