International appetite for investment in Scotland’s life sciences sector remains robust, according to industry experts, boding well for the year ahead despite wider economic difficulties.
The push for solutions to support a growing and ageing population was already driving interest in food and health research prior to the Covid pandemic, which unleashed a further wave of cash for scientific innovation. Investors are also increasingly hunting for greener holdings to put in their portfolios, giving Scotland’s burgeoning industrial biotech sector added allure.
From meat grown in a laboratory to new treatments for cancer, Scotland’s universities have a strong track record in life sciences across a range of disciplines within the sector. Young spin-out companies have access to dozens of local sources of early-stage funding, but overseas investment remains vital for most if they are to grow to significant size.
“For businesses which are keen to target the US marketplace, securing the support of US-based investors will often provide them with a significant strategic advantage,” said Rhona Campbell, chair of the Investing Women Angels network. “This is one of the reasons Investing Women focuses strongly on the international investor community.
“Three emerging life sciences companies – Carcinotech, Cytochroma, and X-Genix – joined our recent AccelerateHER trade mission to California where they received an incredible reception from major VCs and angels in Silicon Valley. The focus is to convert this into US investment to help these Scottish companies reach their full global potential.”
Among those securing money from abroad in 2022 was Roslin Technologies, which is developing cell lines to grow cultivated meat in the laboratory as an alternative to slaughtering animals. Announced in November, the £11 million funding round was led by Novo Holdings from Denmark.
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At Investing Women, the highlight of the year arguably came in February when Motherwell-based TC Biopharm became the only Scottish biotech firm listed on the US Nasdaq market. The company, which is developing cell therapies to fight cancer and viral infections, joined the New York-based exchange with an initial valuation of nearly £88m.
Industrial Biotechnology Innovation Centre (IBioIC) chief executive Mark Bustard said there are countries around the world that have invested heavily in the growth of the sector, and with that comes a deeper pool of investors who can commit to long-term projects. Industrial biotechnology uses waste and biomass-based resources to produce materials, chemicals, and energy that currently rely on fossil fuels, taking in everyday products ranging from medicines to food packaging.
“Scotland is still relatively young in growing our bioeconomy and supply chain, so we need to look to investors in the likes of the Netherlands, the Nordics, and the USA which have developed sooner,” Mr Bustard said.
“We have a very successful seed stage investment environment, but it takes overseas investors who are interested in longer-term returns and large capital projects to also support growth of the sector in Scotland.”
He added: “About one-third of all industrial biotechnology in the UK is happening Scotland, according to recent figures I have seen, so our industrial biotechnology capabilities are up there among the best, but we still have work to do to help the sector develop in the years ahead.”
While access to skilled labour and rising energy costs are a significant concern, Mr Bustard said the inclusion of industrial biotechnology in the National Strategy for Economic Transformation was an important development this past year. Jackie Waring, founder of Investing Women, also highlighted the November launch of the £26m Medicines Manufacturing Innovation Centre as another “massively positive development” for the broader sector.
“This facility is creating high-value jobs and is set to bring in £200m of life science investment into the Glasgow City Region which will further bolster Scotland’s position as a global life sciences centre of excellence,” she said.
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