Earlier this month, Horton International (UK) launched its 2019 European Life Science Report, published following our annual survey among the movers and shakers within the European Life Science sector. Our report last year reflected a general feeling of optimism, suggesting that people thought the sector was in good shape and investment would continue to be healthy; by most measures it is reasonable to conclude that 2018 was, indeed, a good year for the industry across Europe.
This year’s report again, suggests that the majority of people anticipate that 2019 will be a good year for the sector. Having said that, however, there were a number of respondents who felt uncertain about the future, mainly driven by Brexit. This was reflected in the survey results, with the confidence indicator (marks out of 10) falling from 7.4 in the previous year to 7.0 this year.
The shadow of Brexit
In many ways, this year’s survey continues the trend of optimism, though not quite at the same positive levels we saw last year. There is little doubt that the state of the Brexit negotiations at the time of the survey had an impact, especially on the views of the UK respondents. We received a lot of comments about the uncertainties of the UK’s withdrawal from the EU that can be broken down as follows,
Academic Researchers expressed the greatest concerns
- EU grant funding
- Movement of EU researchers
The Venture Capital Community expressed least concern
- Happy to invest where the best opportunities are
Attracting Overseas talent came over as a general concern
- Uncertainty of people moving or remaining in the UK
Manufacturing and Supply Chain – a concern
- Uncertainty of tariff-free movement of goods
- UK potentially being outside the EMA approval system
The main conclusions
The level of optimism in the European Life Sciences sector remains high, coming off the back of 2018 when we saw record levels of investment, some high value M&As and an increase in overall employment. Whilst a number of indicators suggest we are not quite as bullish about 2019 as we were a year ago, there is still an anticipation that the sector will be strong, IPOs will continue and that employment will remain strong.
The main findings in this year’s survey are as follows:
- There is a belief that investment into the sector is likely to remain healthy, and potentially grow, over the coming 12 months.
- IPOs will continue to be a viable route for companies to raise money in the foreseeable future, though pharma / biotech M&As will continue to be the main exit routes for Life Science companies.
- It is generally felt that exits may prove a little more difficult during the next year.
- There is a general expectation that employment levels within the sector will remain robust.
- Therapeutic proteins, will continue to attract investment with immuno-oncology still being an area of focus (though more than one respondent suggesting that this may be a bubble waiting to burst).
- Personalised medicine, the use of AI in R&D and digital health in general will continue to be hot areas.
- There remains a general consensus that the European Life Sciences sector is robust and, notwithstanding a global financial crisis, will continue to offer good returns for investors.
For a copy of the full report, please contact me at firstname.lastname@example.org