Biological drugs have advanced significantly in recent decades. In many ways the landscape for pharma is now very different from the 1980s – mainly due to developments in biologics. These medications have produced some well-known medicines such as Botox, Humira, Lantus and Enbrel. Yet new innovations continue to emerge from dynamic companies in the western world, leading to the situation in 2020 where biologics comprise 25% of the whole pharma market. In this industry report, our team here at Bure Valley Group offers a round-up of the Biologics & Pharmaceuticals markets in 2020. We include some highlights in the UK startup sphere and outline some of the compelling investment opportunities on offer.
Biologics – an overview
It might be tempting to view biologics as simply another type of drug. Yet the distinction lies in the fact that these are derived from living cells. Whilst common pharmaceuticals are chemically synthesised and possess a “known structure”, biologics emanate from living organisms and similar material such as proteins, viruses and blood cells. Although the origins of biologics might sound strange, these powerful drugs can be used to treat a wide range of human diseases including rheumatoid arthritis (RA), HER2-positive breast cancer and retinal diseases (e.g. age-related macular degeneration).
Since biologics come from such a wide range of sources (e.g. bacteria, plants and animals), it tends to lead to a more complicated purification and production process compared to other drugs. Yet this also opens up a wider range of possibilities for innovation. Diseases thought untreatable in the 1980s, for instance, are now possible due to advances in biologics. This presents exciting opportunities for investors who may sense opportunities in this space. After all, with the world’s attention currently focused on a vaccine for COVID-19, think of the growth potential for the business who might end up discovering it!
A brief survey of the market
The UK biologics industry sits within the wider biotechnology industry which has seen significant growth in recent years – even setting aside the demand created for a COVID-19 vaccine. In the years between 2015-20 the industry has grown 6.9% on average (annually), leading to a total of £13.8bn industry revenue in 2020. Globally the picture has been similar. In 2016 global biologics revenue totalled at $219.5bn and has continued to grow by at least $20bn per year to stand at $343.8bn today in 2020. Looking ahead into 2021, forecasts suggest that global revenue might fall to $319.5bn and then rise again in 2022 to $375.4bn.
Market growth in the UK is expected to continue growing – especially as funding continues to come into the industry. Most of this emanates from investors. Yet the UK government is also playing a significant role as it commits £544 million to find a COVID-19 vaccine. It is striking that the industry has continued to attract investment despite the pandemic and lockdown, with £585m raised between March and May 2020.
Key players & opportunities
Biotech in the UK currently employs about 60,518 people across 996 businesses. Some of the largest players (i.e. each with over 5% market share) include Amgen Ltd, BTG plc and Shire Pharmaceuticals Ltd (acquired by Takeda Pharmaceutical Company). BTG, for example, has recently made important strides forward in the global antivenom market – partnering with OMNY to treat people bitten by rattlesnakes, copperheads, and cottonmouths. Yet there are also many exciting developments in the startup sphere of the biologics industry.
NanoSyrinx is an interesting case in point. A spin-out from Warwick Medical School, this startup provides “nanosyringes” to deliver therapeutic proteins and peptides to cell interiors. In essence, this allows drugs to traverse the human body more effectively to arrive at their most-needed destination. At the end of September 2020, NanoSyrinx concluded its Pre-Seed investment round – securing capital to develop a customisable platform for intracellular engineering. The company is also planning another equity financing round in Q1 of 2021.
Another compelling startup is Cambridge-based BiologIC Technologies, which has been dubbed the “Microsoft of cell therapy”. The company draws its inspiration from 3D printing and semiconductor systems to create miniaturised architectures which allow scientists to develop their own applications. This allows innovators to then read, write and apply DNA to create very effective medicines for pharmaceutical use.
One final company worth mentioning is ReViral Ltd; a Hertfordshire-based company developing antiviral therapies to the world’s most vulnerable populations. The primary focus of the business is addressing Respiratory Syncytial Virus (RSV), which is especially dangerous for children and the elderly. Pushing forward with its therapies grounded in N-protein inhibitors and sisunatovir, ReViral has just recently concluded its Series C Financing round at $44m.
Biologics and the biotech industry at large show great promise in 2020 and beyond – despite the challenges posed by COVID-19 to the economy. If anything, the pandemic has drawn greater attention and interest to the sector – encouraging investment from individuals, institutions and governments alike. The challenge for investors, of course, lies in identifying the most promising and viable startup opportunities amongst the crowd. Here at Bure Valley Group, this is where our investor network and pre-vetted projects can offer you great value.
If you are interested in expanding your portfolio into these kinds of exciting spheres of investing, then we invite you to get in touch with us here at Bure Valley and to consider joining our exclusive investor network:
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