UK biotech companies raised £2.05 billion ($2.76 billion) in venture capital in the second quarter of 2026, the strongest quarter for the sector in five years, according to new figures from theBioIndustry Association (BIA).
“We have had a long, hard winter in the biotech sector following a post-COVID sugar rush of funding. Since then, the sector has been dogged by global instability. The rising of global interest rates affects fundraising for venture capital companies, and portfolios are perhaps stuck in value following a pulse of funding,” Chris Molloy, CEO of BIA, toldBioXconomy.
“This has been a sector that’s found it extremely difficult to raise over recent years. And what I’m pleased to see here is that after this long, cold and dark winter, we’re starting to see a patchy springtime.”
The headline figure was driven byIsomorphic Labs’ £1.6 billion Series B, one of the largest private financings in European biotech history. Even without considering that round, UK biotech companies still raised £498 million ($669 million) in venture capital during the quarter, almost double the £279 million ($374.6 million) secured in the same period last year.
“The UK remains one of the standouts, if not the standout, fundraiser across European biotech,” Molloy highlighted. “60% of European biotech funding is raised in London. So, we continue to perform extremely strongly.”
BIA’s report points to a funding landscape that is becoming more balanced across company stages.
Seed investment stayed resilient, with eight deals completed in the quarter at an average size of £6.4 million ($8.6 million), as early-stage companies opted for larger first financings rather than smaller historic structures. Series A and B+ companies raised £190 million ($255 million) and £225 million ($302 million) respectively, while the number of companies closing rounds in the £10 million ($13.4 million) to £25 million ($33.5 million) brackets in the first half of 2026 has already doubled the total recorded across all of 2025.
However, Molloy emphasised that funding at any stage of a biotech’s life cycle remains a difficult feat.
“Let’s be clear about this. It is never easy to fundraise, but we have a particular set of gaps. Firstly, at the proof-of-concept stage. That time when the company is up and running, it’s identified the science, but it needs to demonstrate that that science meets a clear demand signal and often that is reaching the clinic,” he admitted. “That stage has been unbelievably hard over the last few years, and that’s an area that I wish to see the sector revive.”
“Subsequent to that, of course, there’s the scaling stage. This is when companies have choices as to how they scale: do they license or do they continue to develop, do they stay or do they relocate? That scaling stage of finance is the second gap that we see. Whilst there is good news in this Q2 statement on companies at that Series C and Series D stage getting funding, that large scale funding is and will continue to be multinational.”
Public markets told a different story. Follow-on financing reached £58 million ($77.8 million) in the quarter, up 61% from Q1 and well above the £15 million ($20 million) raised a year earlier. However, no UK biotech company has listed on a public exchange so far in 2026, and there was no follow-on activity from UK biotechs listed on Nasdaq.
The report also flagged growing institutional support behind the recovery, includingBritish Business Bank’s£25 million investmentinto Alchemab.
“The UK has done extremely well with its national industrial strategy. If you bring together all of the agencies of government, from funding through to the British Business Bank, from funding through to universities, funding through to translational centres, what you have is a national ecosystem that’s being actively and specifically nurtured,” Molloy said.
“This is a nation that is aligned behind its sector, and that makes a huge difference.”
From an investor’s perspective
Maina Bhaman, partner at Sofinnova Partners, said the recovery of investment in UK biotechs reflects both global and UK-specific dynamics.
“Biotech is a global market,” she told us. “Interest rate stabilization and the return of M&A have renewed interest in the sector. The UK has always punched above its weight in Europe for biotech.”
Larger biotech-focusedfunds, including Sofinnova, have also raised fresh capital that is being deployed into high-quality UK companies.
Bhaman pointed to the same breadth of activity the BIA report highlights as the key signal to watch.
“The signals we watch most closely are breadth and follow-through,” she said. The doubling of companies raising in the £10 million to £25 million bracket compared with all of last year “tells us this is a broadening base, not a single-deal spike.”
She cited Novartis’acquisitionof Myricx Bio, a Sofinnova portfolio company, as exactly the kind of exit that “builds investor confidence across the sector,” adding that private markets should continue to flourish as long as M&A and public markets stay buoyant.
On strategy, Bhaman’s advice to founders navigating the improved environment is to resist chasing crowded trends.
“Build around genuinely differentiated science, not a crowded trend, and be willing to follow the data even when it means changing direction,” she said.
Myricx Bio’s own path illustrates the point. The company pivoted from a small molecule programme to an antibody-drug conjugate (ADC) payload platform after testing a new hypothesis, a shift Bhaman claims ultimately shaped its acquisition by Novartis. She also urged founders to think globally from the outset about where demand for their platform scales, and not to lose sight of team quality. “Exceptional people matter as much as exceptional science: investors are backing founders as much as the underlying biology.”
Asked what other ecosystems could take from the UK’s experience, Bhaman pointed to the combination of scientific depth and coordinated capital.
“The UK’s model is a strong one to build on: pairing deep scientific talent with patient, coordinated capital, purpose-built institutional vehicles, and a specialist investor base willing to back early scientific risk,” she said.
The next challenge, she added, applies equally to the UK itself. Private momentum must be matched by public markets and translational funding, “so companies are de-risked and supported at every stage, not just at the venture level.”
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