UK BioIndustry Association
UK Listed Biotech & Life Sciences
2020 – Year in Review– May you live in interesting times
Radnor Broad UK Listed Biotech Index - 2 Year Chart
Unweighted Weighted FTSE All-Share 350
300
250
200
150
100
50
Dec '20 Dec '18 Mar '19 Jun '19 Sep '19 Dec '19 Mar '20 Jun '20 Sep '20
Source: FactSet, Radnor
2020 has been an extraordinary year across the market but there is no doubt that the UK listed biotech sector has been in the front line in more ways than one. Investors have clearly responded to both the efforts made by the sector to combat the pandemic, but also the structural growth opportunity within biotech that the pandemic has bought into sharper focus.
Not only have we seen headline share price underperformance reverse sharply through the course of 2020, but critically, the pace and scale of sector fundraising activity has stepped up materially. Perhaps most importantly, the number of investors active in the sector (institutional, private wealth, individual and overseas) have expanded. This feature alone has gone a long way towards addressing one of the key issues facing the sector.
The BioIndustry Association ▪ Sector Outperformance. 2020 has been the strongest period of price is a research client of Radnor outperformance over the last 10 years. Interestingly, this outperformance has Capital Partners Ltd. been delivered across all the sub-indices making up the Broad Biotech index; although performance levels have varied somewhat. This outperformance has MiFID II – this research is also been much more pronounced then looking at the sector on an equal deemed to be a minor, non- monetary benefit. weighted basis (ie, not adjusting for market value) as the charge has been led by smaller companies predominantly.
▪ Capital Raising. In line with the rest of the market, 2020 has been especially strong with c.£1,140m of fresh equity being raised across 51 individual 11th January 2021 companies (the highest number for four years). Not only has this fresh wave of new equity funding secured development pipelines it has also bought a large Iain Daly number of new investors into the sector. Mike van Dulken ▪ Investor Participation. Not only have we seen a large number of new investors [email protected] enter the sector as a result of heightened capital raising activity, but we have [email protected] also seen significant new buying interest in the secondary market across the sector from new investors. There are more investors now exposed to the sector +44 (0) 203 897 1830 than at any point in the last two years.
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UK BioIndustry Association
1 – Price Performance: Outperformance across the board
Below we show the 1 Year and 5 Year performance charts for the Broad UK Biotech Index. The constituents of this index, and of the sub-indices that make up this master index are detailed in Appendix A at the end of this document. The index classifications and the constituents have been curated by Radnor, in partnership with the BIA.
These indices are calculated and maintained via the FactSet custom index methodology on both an Unweighted basis and a Market Cap Weighted basis. In all cases we show both indices to provide the fullest picture of performance. The UK listed biotech sector is highly polarised in market cap terms with a relatively small number of companies dominating the aggregated market cap of the sector:
▪ The overall market cap of the Broad Biotech index is £31.0bn and is made up of 87 constituents.
▪ The ten largest stocks have a combined market cap of £18.8bn, representing 61% of the sector by value.
Figure 1: Broad Biotech Index – 1 Year Figure 2: Broad Biotech Index – 5 Year
Unweighted Weighted FTSE All-Share Unweighted Weighted FTSE All-Share
310 340
260 290 240 210 190 160 140
110 90
60
Dec '20 Jan '20 Feb '20 Mar '20 Apr '20 May'20 Jun '20 Jul'20 Aug '20 Sep '20 Oct '20 Nov '20
Dec '19 40
Dec '15 Mar '16 Jun '16 Sep '16 Dec '16 Mar '17 Jun '17 Sep '17 Dec '17 Mar '18 Jun '18 Sep '18 Dec '18 Mar '19 Jun '19 Sep '19 Dec '19 Mar '20 Jun '20 Sep '20 Dec '20
Source: FactSet, Radnor
▪ Both the charts above show the extent to which the Broad Biotech index has materially outperformed the FTSE All Share on both an unweighted and weighted market cap basis since March 2020. Given the preponderance of smaller cap companies making up this index, and the extent of some of the price moves we have witnessed, this outperformance is especially marked on the unweighted basis. This is a common feature across all the sub-indices that follow.
▪ We would also note that even prior to the onset of the Covid-19 pandemic, which has clearly been the catalytic event dominating the sector during 2020, the Broad Biotech index had been outperforming the broader market throughout Q1 2020.
▪ In fact, over the last five years, on an unweighted basis, the Broad Biotech Index had been performing broadly in line with the FTSE All Share.
In the charts that follow, we break the Broad Biotech index down into its main sub- components.
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Small Molecule & Biologic Therapeutics
Figure 3: Small Molecule – 1 Year Figure 4: Small Molecule - 5 Year
Unweighted Weighted FTSE All-Share Unweighted Weighted FTSE All-Share
410 450 360 400 350 310 300 260 250 210 200 160 150 100 110 50
60
Dec '20 Jan '20 Feb '20 Mar '20 Apr '20 May'20 Jun '20 Jul'20 Aug '20 Sep '20 Oct '20 Nov '20
Dec Dec '19 0
Sep '17 Dec '15 Mar '16 Jun '16 Sep '16 Dec '16 Mar '17 Jun '17 Dec '17 Mar '18 Jun '18 Sep '18 Dec '18 Mar '19 Jun '19 Sep '19 Dec '19 Mar '20 Jun '20 Sep '20 Dec '20
Source: FactSet, Radnor Cell & Gene Therapies
Figure 5: Cell & Gene Therapies– 1 Year Figure 6: Cell & Gene Therapies– 5 Year
Unweighted Weighted FTSE All-Share Unweighted Weighted FTSE All-Share
260 340 240 220 290 200 240 180 160 190 140 120 140 100 90 80
60
Dec '20 Jan '20 Feb '20 Mar '20 Apr '20 May'20 Jun '20 Jul'20 Aug '20 Sep '20 Oct '20 Nov '20
Dec '19 40
Sep '17 Dec '15 Mar '16 Jun '16 Sep '16 Dec '16 Mar '17 Jun '17 Dec '17 Mar '18 Jun '18 Sep '18 Dec '18 Mar '19 Jun '19 Sep '19 Dec '19 Mar '20 Jun '20 Sep '20 Dec '20
Source: FactSet, Radnor Research Tools & Data
Figure 7: Research Tools– 1 Year Figure 8: Research Tools– 5 Year
Unweighted Weighted FTSE All-Share Unweighted Weighted FTSE All-Share
310 290
260 240
210 190
160 140
110 90
60
Dec '20 Jan '20 Feb '20 Mar '20 Apr '20 May'20 Jun '20 Jul'20 Aug '20 Sep '20 Oct '20 Nov '20
Dec '19 40
Sep '17 Dec '15 Mar '16 Jun '16 Sep '16 Dec '16 Mar '17 Jun '17 Dec '17 Mar '18 Jun '18 Sep '18 Dec '18 Mar '19 Jun '19 Sep '19 Dec '19 Mar '20 Jun '20 Sep '20 Dec '20
Source: FactSet, Radnor
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Diagnostics
Figure 9: Diagnostics– 1 Year Figure 10: Diagnostics– 5 Year
Unweighted Weighted FTSE All-Share Unweighted Weighted FTSE All-Share
760 740 660 640 560 540 460 440 360 340 260 240 160 140
60
Dec '20 Jan '20 Feb '20 Mar '20 Apr '20 May'20 Jun '20 Jul'20 Aug '20 Sep '20 Oct '20 Nov '20
Dec '19 40
Sep '17 Dec '15 Mar '16 Jun '16 Sep '16 Dec '16 Mar '17 Jun '17 Dec '17 Mar '18 Jun '18 Sep '18 Dec '18 Mar '19 Jun '19 Sep '19 Dec '19 Mar '20 Jun '20 Sep '20 Dec '20
Source: FactSet, Radnor Medical Devices
Figure 11: Medical Devices– 1 Year Figure 12: Medical Devices– 5 Year
Unweighted Weighted FTSE All-Share Unweighted Weighted FTSE All-Share
140 220 130 200 120 180 110 160 140 100 120 90 100 80 80 70 60
60
Dec '20 Jan '20 Feb '20 Mar '20 Apr '20 May'20 Jun '20 Jul'20 Aug '20 Sep '20 Oct '20 Nov '20
Dec '19 40
Sep '17 Dec '15 Mar '16 Jun '16 Sep '16 Dec '16 Mar '17 Jun '17 Dec '17 Mar '18 Jun '18 Sep '18 Dec '18 Mar '19 Jun '19 Sep '19 Dec '19 Mar '20 Jun '20 Sep '20 Dec '20
Source: FactSet, Radnor Commercialisation & Investment Vehicles
Figure 13: Investment Vehicles– 1 Year Figure 14: Investment Vehicles– 5 Year
Unweighted Weighted FTSE All-Share Unweighted Weighted FTSE All-Share
150 190 140 170 130 120 150 110 130 100 90 110 80 90 70
60
Dec '20 Jan '20 Feb '20 Mar '20 Apr '20 May'20 Jun '20 Jul'20 Aug '20 Sep '20 Oct '20 Nov '20
Dec '19 70
Sep '17 Dec '15 Mar '16 Jun '16 Sep '16 Dec '16 Mar '17 Jun '17 Dec '17 Mar '18 Jun '18 Sep '18 Dec '18 Mar '19 Jun '19 Sep '19 Dec '19 Mar '20 Jun '20 Sep '20 Dec '20
Source: FactSet, Radnor
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COVID-19 Specific “Composite”
Figure 15: COVID-19 Specifc - 1 Year Figure 16: COVID-19 Specific– 5 Year
Unweighted Weighted FTSE All-Share Unweighted Weighted FTSE All-Share
660 830
560 730 630 460 530 360 430 260 330 230 160 130
60
Dec '20 Jan '20 Feb '20 Mar '20 Apr '20 May'20 Jun '20 Jul'20 Aug '20 Sep '20 Oct '20 Nov '20
Dec '19 30
Sep '17 Dec '15 Mar '16 Jun '16 Sep '16 Dec '16 Mar '17 Jun '17 Dec '17 Mar '18 Jun '18 Sep '18 Dec '18 Mar '19 Jun '19 Sep '19 Dec '19 Mar '20 Jun '20 Sep '20 Dec '20
Source: FactSet, Radnor Non Human Life Sciences
Figure 17: Non Human Life Sciences - 1 Year Figure 18: Non Human Life Sciences– 5 Year
Unweighted Weighted FTSE All-Share Unweighted Weighted FTSE All-Share
140 280 130 230 120 110 180 100 90 130 80 80 70
60
Dec '20 Jan '20 Feb '20 Mar '20 Apr '20 May'20 Jun '20 Jul'20 Aug '20 Sep '20 Oct '20 Nov '20
Dec '19 30
Sep '17 Dec '15 Mar '16 Jun '16 Sep '16 Dec '16 Mar '17 Jun '17 Dec '17 Mar '18 Jun '18 Sep '18 Dec '18 Mar '19 Jun '19 Sep '19 Dec '19 Mar '20 Jun '20 Sep '20 Dec '20
Source: FactSet, Radnor
In Figure 15 and 16 above, we show the performance of the COVID-19 specific peer group. This is a “composite” sub index, whose constituents are drawn from each of the former sub- indices. Each of these companies have announced trials or product development specifically aimed at testing or treating Covid-19, or where their existing IP has direct relevance in dealing with the pandemic.
Given the prominence of the pandemic over the last year, it is not surprising to see that this “composite” sub index sits near the top of the 1 year price return comparative charts below (Figures 19 and 20), although pipped by the pure Diagnostics sub index.
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Overall 1 Year Sub Index Performance
Figure 19: All Sub Indices - Unweighted Figure 20: All Sub Indices – Market Cap weighted
Diagnostics +493% Diagnostics +290%
Covid-19 Composite +475% Covid-19 Composite +109%
Small Molecule +286% Cell & Gene Therapies +70%
Broad Biotech Index +155% Small Molecule +55%
Research Tools & Data +153% Investment Vehicles +28%
Cell & Gene Therapies +149% Broad Biotech Index +27%
Investment Vehicles +45% Non Human +24%
Non Human +34% Research Tools & Data +20%
Medical Devices +31% Medical Devices +7%
FTSE All-Share -11% FTSE All-Share -11%
Source: FactSet, Radnor
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2 – Capital Raising: 2020 proved to be a stand-out year
After three relatively static years, 2020 has seen a marked increase in the scale and number of equity fundraising transactions:
▪ 2020 has seen a total of £1,141m of fresh equity raised by 51 individual companies, this is more than double the amount raised in 2018 and 2019 combined.
▪ However, despite the significant increase in the scale and pace of secondary fundraisings, we have only seen 2 IPOs so far this year.
▪ We believe there are a number of factors at play here;
1. The lack of UK IPO activity is not unique to the biotech sector but a feature of the broader market during the pandemic period where investors have preferred to support significantly increased fresh equity issuance from existing portfolio holdings.
2. Alternative funding sources have also been very active through the course of 2020. The most recent BIA Biotech Financing Update (available to download here), highlights a total of £744m of new VC funding secured in the year to date alongside £119m raised by UK biotech IPO’s on North American exchanges. The BIA highlighted that 2020 was on course to surpass 2018 as the strongest year on record for overall sector financing.
In Figure 21 below, we show the amount (£m) of fresh equity raised across the last four years by sub-index, and also show the split between IPO’s and secondary fundraises.
Figure 21: Primary & Secondary Fundraising Activity, 2017 – 2020 by value of transactions, £m
2017 2018 2019 2020 IPO £160m IPO £85m IPO £77m IPO £37m Secondary Secondary £434m Secondary £430m Secondary £357m £1,104m
£594m £515m £434m £1,141m
Research Tools Data, £327m
Small Molecule, £288m
Non Human, £176m
Cell Gene Therapies, £215m
2017 2018 2019 2020
Investment Vehicles Medical Devices Cell Gene Therapies Non Human Small Molecule Research Tools Data Diagnostics
Source: London Stock Echange, RNS, Radnor
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In Figure 22 below, we show the number of companies that have raised fresh equity across the last four years by sub-index, and also show the split between IPO’s and secondary fundraises.
Figure 22: Primary & Secondary Fundraising Activity, 2017 – 2020 by number of companies
2017 2018 2019 2020 IPO 7 IPO 3 IPO 3 IPO 2 Secondary 19 Secondary 30 Secondary 28 Secondary 49 26 33 31 51
Small Molecule, 17
Research Tools Data, 14
Cell Gene Therapies, 8
Medical Devices, 5 Diagnostics, 4
2017 2018 2019 2020 Non Human Diagnostics Medical Devices Cell Gene Therapies Research Tools Data Small Molecule Investment Vehicles
Source: London Stock Echange, RNS, Radnor
Looking at the last four years in the round; Figure 23 below shows the split of total IPO and Secondary fundraising totals across the main sub-indices.
Figure 23: Primary & Secondary Fundraising Activity, 2017 – 2020 combined by value of transactions, £m
Source: London Stock Exchange, RNS, Radnor
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3 – Investor Participation: Increasing breadth of ownership
Given the combination of rising share prices and the frequency and scale of equity fundraising in the sector; the interesting question is which investors have been most active in the sector?
Figure 24: All Investors Buying / Selling – March through December 2020 – by Sub Index
Buys Sells Net £ 1,200m £ 1,200m £ 1,000m £ 1,000m £ 800m £ 800m £ 600m £ 600m £ 400m £ 400m £ 200m £ 200m £ 0m £ 0m -£ 200m -£ 200m -£ 400m -£ 400m -£ 600m -£ 600m -£ 800m -£ 800m Small Molecule Cell & Gene Diagnostics Research Tools Medical Devices Inv. Vehicles
Figure 25: All Investors Buying / Selling – March through December 2020 – by Investor Type
Buys Sells Net £ 1,200m £ 1,200m £ 1,000m £ 1,000m £ 800m £ 800m £ 600m £ 600m £ 400m £ 400m £ 200m £ 200m £ 0m £ 0m -£ 200m -£ 200m -£ 400m -£ 400m -£ 600m -£ 600m -£ 800m -£ 800m UK Larger UK Smaller UK Private UK Retail XO North American European Rest of World Institutions Institutions Wealth
Figure 26: Total number of New Investors vs Exiting Investors – March through December 2020
North American -10 +24
European -10 +16
UK Small -6 +10
UK Large -3 +10
Rest of World -3 +6
UK Private Wealth -3 +3
UK Retail XO No new platform entrants0 or exits
New Investors Exiting Investors
Source: FactSet, Radnor
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In order to answer this question, we have analysed investor net buying and selling activity from March through to December 2020.
▪ Across the Broad Index we can identify £2.676bn of new Buying activity, offset by £1.959bn of new Selling activity; resulting in a total net inflow of £717m of new buying activity across the sector;
- Research Tools (net inflow of £432m), Small Molecule (net inflow of £234m) and Cell & Gene Therapy (net inflow of £141m) led the way in terms of net positive investor buying activity.
- Only Medical Devices (-£77m) and Commercialisation & Investment Vehicles (-£36m) saw net outflows during the period
▪ Looking at the data through the lens of investor type:
- North American (net inflow of £649m) and UK Retail Execution Only (net inflow of £132m) and European investors (net inflow of £52m) were the largest sources of net investor buying activity.
- UK Private Wealth investors were net positive through most of 2020 but turned overall net sellers in November, which was enough to tip them into negative territory (-£11m) over the period.
- UK Larger Institutions, were material net sellers in value terms with an outflow of £59m. Here overall net selling activity was concentrated in Small Molecule (-£77m), Medical Devices (-£52m) and Investment vehicles (-£112m). The standout sub index was Research Tools & Data where UK Large Institutional net buying totalled £186m.
- UK Smaller Institutions ended the year marginally down (net outflow of £11m), although this was heavily skewed by a material net outflow from the Research Tools & Data sub index (-£68m).
We believe the key driver behind UK Institutional activity during 2020 was profit taking. The price outperformance delivered by the biotech sector in 2020 followed a number of years of more muted performance and provided the opportunity for UK institutions, who had been patient, but unrewarded, supporters of the sector in prior years to lock in gains.
The headline net selling by UK institutions (in value terms) should not detract from the fact that UK Institutional participation in the biotech sector has grown considerably during 2020. Figure 24 above shows the count of new investors entering the sector during the period, against the number of investors exiting the sector. By this measure:
▪ A net seven new UK Larger Institutions (10 new entries vs 3 exits) entered;
▪ A net four new UK Smaller Institutions (10 new entries vs 6 exits) entered.
In the charts below, we show the scale and breadth of investor activity across the Broad Biotech index. We break this data down by each individual sub-index and also by each investor type.
Our classification of Larger vs Smaller UK Institutions is a proprietary and largely subjective exercise. The primary determinant is the scale of actively managed, UK focused equity assets under management. The broad cut off point here is £10bn, below which we classify a UK Institution as being Smaller.
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By Sub Index – Buying / Selling, March through December 2020
Figure 27: Small Molecule – by Investor Type
Buys Sells Net
£ 300m £ 300m
£ 200m £ 200m
£ 100m £ 100m
£ 0m £ 0m
-£ 100m -£ 100m
-£ 200m -£ 200m
-£ 300m -£ 300m UK Larger UK Smaller UK Private UK Retail XO North European Rest of World Institutions Institutions Wealth American
Figure 28: Cell & Gene Therapy – by Investor Type
Buys Sells Net
£ 200m £ 200m
£ 150m £ 150m
£ 100m £ 100m
£ 50m £ 50m
£ 0m £ 0m
-£ 50m -£ 50m
-£ 100m -£ 100m
-£ 150m -£ 150m UK Larger UK Smaller UK Private UK Retail XO North European Rest of World Institutions Institutions Wealth American
Source: FactSet, Radnor
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Figure 29: Diagnostics – by Investor Type
Buys Sells Net
£ 20m £ 20m
£ 15m £ 15m
£ 10m £ 10m
£ 5m £ 5m
£ 0m £ 0m
-£ 5m -£ 5m
-£ 10m -£ 10m
-£ 15m -£ 15m
-£ 20m -£ 20m UK Larger UK Smaller UK Private UK Retail XO North American European Rest of World Institutions Institutions Wealth
Figure 30: Research Tools & Data – by Investor Type
Buys Sells Net
£ 600m £ 600m
£ 500m £ 500m
£ 400m £ 400m
£ 300m £ 300m
£ 200m £ 200m
£ 100m £ 100m
£ 0m £ 0m
-£ 100m -£ 100m
-£ 200m -£ 200m UK Larger UK Smaller UK Private UK Retail XO North European Rest of World Institutions Institutions Wealth American
Source: FactSet, Radnor
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Figure 31: Medical Devices – by Investor Type
Buys Sells Net
£ 100m £ 100m
£ 50m £ 50m
£ 0m £ 0m
-£ 50m -£ 50m
-£ 100m -£ 100m
-£ 150m -£ 150m UK Larger UK Smaller UK Private UK Retail XO North European Rest of World Institutions Institutions Wealth American
Figure 32: Commercialisation & Investment Vehicles – by Investor Type
Buys Sells Net
£ 200m £ 200m
£ 150m £ 150m
£ 100m £ 100m
£ 50m £ 50m
£ 0m £ 0m
-£ 50m -£ 50m
-£ 100m -£ 100m
-£ 150m -£ 150m
-£ 200m -£ 200m UK Larger UK Smaller UK Private UK Retail XO North European Rest of World Institutions Institutions Wealth American
Source: FactSet, Radnor
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By Investor Type – Buying / Selling, March through October 2020
Figure 33: UK Large Institution – by Sub Index
Buys Sells Net
£ 400m £ 400m
£ 300m £ 300m
£ 200m £ 200m
£ 100m £ 100m
£ 0m £ 0m
-£ 100m -£ 100m
-£ 200m -£ 200m
-£ 300m -£ 300m Small Molecule Cell & Gene Diagnostics Research Tools Medical Devices Inv. Vehicles
Figure 34: UK Smaller Institution – by Sub Index
Buys Sells Net
£ 100m £ 100m
£ 50m £ 50m
£ 0m £ 0m
-£ 50m -£ 50m
-£ 100m -£ 100m
-£ 150m -£ 150m Small Molecule Cell & Gene Diagnostics Research Tools Medical Devices Inv. Vehicles
Source: FactSet, Radnor
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Figure 35: UK Private Wealth – by Sub Index
Buys Sells Net
£ 200m £ 200m
£ 150m £ 150m
£ 100m £ 100m
£ 50m £ 50m
£ 0m £ 0m
-£ 50m -£ 50m
-£ 100m -£ 100m
-£ 150m -£ 150m
-£ 200m -£ 200m Small Molecule Cell & Gene Diagnostics Research Tools Medical Devices Inv. Vehicles
Figure 36: UK Retail Execution Only – by Sub Index
Buys Sells Net
£ 120m £ 120m
£ 100m £ 100m
£ 80m £ 80m
£ 60m £ 60m
£ 40m £ 40m
£ 20m £ 20m
£ 0m £ 0m
-£ 20m -£ 20m
-£ 40m -£ 40m
-£ 60m -£ 60m Small Molecule Cell & Gene Diagnostics Research Tools Medical Devices Inv. Vehicles
Source: FactSet, Radnor
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Figure 37: North American Investors – by Sub Index
Buys Sells Net
£ 600m £ 600m
£ 500m £ 500m
£ 400m £ 400m
£ 300m £ 300m
£ 200m £ 200m
£ 100m £ 100m
£ 0m £ 0m
-£ 100m -£ 100m
-£ 200m -£ 200m Small Molecule Cell & Gene Diagnostics Research Tools Medical Devices Inv. Vehicles
Figure 38: European Investors – by Sub Index
Buys Sells Net
£ 80m £ 80m
£ 60m £ 60m
£ 40m £ 40m
£ 20m £ 20m
£ 0m £ 0m
-£ 20m -£ 20m
-£ 40m -£ 40m
-£ 60m -£ 60m Small Molecule Cell & Gene Diagnostics Research Tools Medical Devices Inv. Vehicles
Source: FactSet, Radnor
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Figure 39: Rest of the World Investors – by Sub Index
Buys Sells Net
£ 20m £ 20m
£ 10m £ 10m
£ 0m £ 0m
-£ 10m -£ 10m
-£ 20m -£ 20m
-£ 30m -£ 30m
-£ 40m -£ 40m Small Molecule Cell & Gene Diagnostics Research Tools Medical Devices Inv. Vehicles
Source: FactSet, Radnor
By Investor Type – Net New Investors by Number, December vs March 2020
In Figures 40 – 45 below, we recut the investor data to show how many net new investors have entered the sector since the start of March 2020; ie pre Covid-19. We break these investor numbers down by each individual sub-index.
▪ In terms of UK Large and Smaller Institutions; Small Molecule and Research Tools & Data saw the largest number of new institutions (+6) entering the sector
▪ In terms of North American investors; Small Molecule also led the way (+19) followed by Medical Devices (+5). The new US investors comprised a broad spread of traditional mutual fund managers, hedge funds and life science specialist investors.
▪ 2020 saw a number of UK Private Wealth firms entering the sector with Small Molecule (+4), Cell & Gene Therapy (+4) and Diagnostics (+2) the most popular areas.
▪ Commercialisation & Investment Vehicles has traditionally been an area attractive to the Private Wealth audience and ownership levels were already high here leading into 2020, which saw one fewer Private Wealth firms active in the sector by the end of the year
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Figure 40: Small Molecule – Net New Investors Figure 41: Cell & Gene Therapy – Net New Investors
UK Large +1 UK Large +1
UK Small +5 UK Small -4
UK Private Wealth +4 UK Private Wealth +4 UK Retail XO +3 UK Retail XO
North American +19 North American -2
European -1 European +7
Rest of World Rest of World -1
Figure 42: Research Tools – Net New Investors Figure 43: Medical Devices – Net New Investors
UK Large +7 UK Large
UK Small -1 UK Small
UK Private Wealth +1 UK Private Wealth -4
UK Retail XO UK Retail XO -1
North American -2 North American +5
European -4 European +2
Rest of World +1 Rest of World
Figure 44: Diagnostics – Net New Investors Figure 45: Investment Vehicles – Net New Investors
UK Large +1 UK Large -1
UK Small +3 UK Small -3
UK Private Wealth +2 UK Private Wealth -1
UK Retail XO UK Retail XO
North American North American
European +2 European +1
Rest of World +1 Rest of World +3
Source: FactSet, Radnor
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Percentage Ownership by Investor Type – February 2020 to December 2020
In Figures 46 – 52 below, we show the proportion of the Broad Biotech index owned by each investor type (calculated by reference to the aggregate value of holdings as a percentage of total market value). We have cut the data at December 2020 and then compared to February 2020 in order to show how the ownership mix has evolved through the pandemic period.
This data only captures holdings information relating to external investors and does not show VC or founders’ holdings, nor those holdings by private individuals held outside of retail execution only platforms.
Figure 46: Percentage ownership by Investor Type – February 2020 to December 2020
Feb 20 Dec 20 21.4%
18.7%
14.1%
10.2% 9.6% 9.1% 8.6% 7.6%
4.6% 4.2% 3.6% 3.4%
1.5% 1.1%
UK Large US UK Small Priv. Wealth Retail XO EU R o W
Source: FactSet, Radnor
▪ We can see that the two largest movements have been the material increase in North American ownership by external investors (10% to 14%) and a slightly smaller decrease by UK Large Institutions (21% to 19%)
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Figure 47: Small Molecule – Percentage Ownership by Investor Type – February 2020 to December 2020
39.2% Feb 20 Dec 20
28.5%
16.4%
9.3%
4.4% 4.7% 4.1% 4.0% 3.2% 3.6% 1.1% 1.2% 1.1% 0.1%
UK Large US UK Small EU Retail XO Priv. Wealth R o W
Figure 48: Cell & Gene Therapy – Percentage Ownership by Investor Type – February 2020 to December 2020
Feb 20 Dec 20
25.5%
20.7%
15.9% 14.3%
6.1% 6.8% 5.5% 4.8% 4.1% 3.4% 3.4% 2.7% 2.7% 2.5%
UK Large US Retail XO R o W UK Small EU Priv. Wealth
Figure 49: Research Tools & Data – Percentage Ownership by Investor Type – February 2020 to December 2020
29.4% Feb 20 Dec 20
20.6%
16.6% 14.8%
11.2% 11.1%
5.6% 3.2% 3.2% 3.2% 2.7% 2.8% 1.5% 1.2%
US UK Large UK Small Priv. Wealth EU Retail XO R o W
Source: FactSet, Radnor
Radnor Capital Partners Ltd is authorised and regulated by the FCA. Please refer to the regulatory disclosures at the end of this note. 20 UK BioIndustry Association
Figure 50: Medical Devices – Percentage Ownership by Investor Type – February 2020 to December 2020
33.3% Feb 20 Dec 20 30.9%
9.2% 7.8% 7.8% 7.6% 6.8% 6.8% 5.6% 5.4% 2.4% 2.2% 1.4% 0.2%
UK Large EU Priv. Wealth US UK Small Retail XO R o W
Figure 51: Diagnostics – Percentage Ownership by Investor Type – February 2020 to December 2020
Feb 20 Dec 20 21.3% 21.1%
16.1% 14.4% 13.2%
6.6%
3.3% 1.7% 1.6% 1.3% 0.6% 0.0% 0.6% 0.3%
UK Small UK Large EU Retail XO Priv. Wealth R o W US
Figure 52: Commercialisation & Inv Vehicles – Percentage Ownership by Investor Type – February 2020 to December 2020
Feb 20 Dec 20 18.2% 17.5%
13.1% 12.4% 11.9% 9.8%
6.9% 7.3%
3.2% 2.9% 1.1% 1.1% 0.2% 0.2%
Priv. Wealth UK Small UK Large Retail XO US EU R o W
Source: FactSet, Radnor
Radnor Capital Partners Ltd is authorised and regulated by the FCA. Please refer to the regulatory disclosures at the end of this note. 21 UK BioIndustry Association
Appendix:
Broad Biotech Index – Market Cap Analysis
Source: FactSet, Radnor
Broad Biotech Index – Top Ten Constituents and Market Caps
77 Others, £ 12,331m
Indivior (Small Molecule), £758m
Oxford BioMedica (Cell & Gene), £862m
BB Healthcare (Inv Vehicles), £892m
IP Group (Inv Vehicles), £1,047m
PureTech Health (Small Molecule), £1,135m
Syncona (Inv Vehicles), £1,791m
Worldwide Healthcare (Inv Vehicles), £2,335m
Genus (Non Human), £2,742m
Abcam (Research Tools), £3,405m
Dechra Pharma (Non Human), £3,805m
Source: FactSet, Radnor
Radnor Capital Partners Ltd is authorised and regulated by the FCA. Please refer to the regulatory disclosures at the end of this note. 22 UK BioIndustry Association
Broad Biotech Index – All Constituent List
Small Molecule Cell & Gene Therapy Medical Devices Allergy Therapeutics plc Amryt Pharma PLC Advanced Medical Solutions Group plc Circassia Group PLC Avacta Group PLC Advanced Oncotherapy Plc 4d Pharma PLC Oxford BioMedica plc Creo Medical Group Plc Destiny Pharma Plc Horizon Discovery Group Plc Consort Medical Plc Diurnal Group plc MaxCyte, Inc. Deltex Medical Group plc Evgen Pharma Plc ReNeuron Group plc Kromek Group Plc Faron Pharmaceuticals Oy Scancell Holdings Plc LiDCO Group Plc Futura Medical plc Silence Therapeutics plc RUA Life Sciences Plc HemoGenyx Pharmaceuticals Plc SDI Group plc ImmuPharma plc Research Tools & Data Surgical Innovations Group plc Indivior PLC ABCAM PLC Tissue Regenix Group plc Midatech Pharma Plc ANGLE plc Vectura Group plc N4 Pharma Plc Bioventix Plc OptiBiotix Health PLC C4X Discovery Holdings PLC Diagnostics PureTech Health PLC Cambridge Cognition Holdings Plc EKF Diagnostics Holdings plc Redx Pharma Plc Collagen Solutions Plc Immunodiagnostic Systems Holdings plc Sareum Holdings plc MyHealthChecked PLC Novacyt SAS SkinBioTherapeutics Plc Diaceutics Plc Omega Diagnostics Group PLC Synairgen plc e-Therapeutics plc Oncimmune Holdings Plc Shield Therapeutics Plc Ergomed PLC Polarean Imaging Plc Tiziana Life Sciences PLC Fusion Antibodies Plc Verici Dx Plc ValiRx PLC Genedrive Plc Abingdon Health PLC Vectura Group plc hVIVO /Open Orphan plc IXICO Plc Commercialisation & Investment Vehicles Non Human Oxford BioDynamics PLC Arix Bioscience Plc Animalcare Group PLC Physiomics Plc BB Healthcare Trust Plc Anpario plc Proteome Sciences plc Biotech Growth Trust PLC Benchmark Holdings Plc Renalytix AI Plc International Biotechnology Trust PLC Dechra Pharmaceuticals PLC Sensyne Health Plc IP Group plc ECO Animal Health Group plc Yourgene Health Plc Polar Capital Global Healthcare Trust plc Genus plc RTW Venture Fund Limited USD Syncona Ltd GBP Worldwide Healthcare Trust PLC GBP
Covid-19 composite peer group
Source: UK BioIndustry Association, Radnor
Radnor Capital Partners Ltd is authorised and regulated by the FCA. Please refer to the regulatory disclosures at the end of this note. 23 UK BioIndustry Association
REGULATORY DISCLOSURES
Radnor Capital Partners Ltd is authorised and regulated by the Financial Conduct Authority.
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Radnor Capital Partners Ltd is authorised and regulated by the FCA. Please refer to the regulatory disclosures at the end of this note. 24