The UK Life Sciences Industry and the Public Markets, 2016/17. World class science, world class investment opportunities

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1 The UK Life Sciences Industry and the Public Markets, 2016/17 World class science, world class investment opportunities

2 Life sciences investment opportunity Biotechnology and related life science and healthcare industries offer a wide range of investment opportunities with diverse business models. The industry is driven by strong fundamentals: the world population is increasing and is ageing; healthcare spending per capita is rising in the developed world; the pharma industry is increasingly looking for innovation and to source innovative new products to drive growth; and biotechnology companies are at the forefront of advances in first-in-class and/or disruptive therapies. Indeed, of the top drugs by 2017 forecast global sales 1 : Four of the top five are biologics, including Humira, Rituxan, Avastin, and Herceptin. Eight of the top ten drugs were originated by biotechnology companies. 1 Source: EvaluatePharma

3 Life sciences and the public markets The UK-listed healthcare sector continues to be a source of outperformance for investors 2 : Over 115 life science companies are listed on the London Stock Exchange, with a combined market capitalisation nearing 400 billion, 40 billion up since the end of billion was raised in life science IPOs and follow-on offerings on the London Stock Exchange in 2016 Over three years, the FTSE Healthcare AIM and FTSE Healthcare All Share Indexes have outperformed wider indexes to end % and +16% respectively, compared to +7% for the FTSE All Share Index 200 FTSE Healthcare Indices Outperform FTSE All Share Rebased to 100 as at Jan FTSE AIM Health Care FTSE All Share FTSE All Share Health Care 80 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Source: London Stock Exchange 2 Source: London Stock Exchange Group

4 The UK is at the cutting edge of a global market The UK has a world class science base and has produced blockbuster pharmaceutical products. The country is home to two of the world s top three universities for life sciences 3 and together, UK scientists have been awarded over 80 Nobel Prizes. This strong science and research base underpins a life science industry comprising over 5,600 companies, which are collectively generating around 60 billion in annual turnover 4. The UK has the largest therapeutic pipeline in Europe, developing over 800 product candidates in Large parts of the global innovation in modern drug development are rooted in the UK, including Humira, the world s best-selling drug. Therapeutic pipeline by phase for leading European biotech hubs, 2016 United Kingdom Germany France Switzerland Spain Sweden Italy The Netherlands Denmark Ireland Preclinical Phase I Phase II Phase III Number of product candidates Source: EvaluatePharma. Excludes companies with market cap above $20bn. 3 Times Higher Education World University Rankings by subject: life sciences 4 Office for Life Sciences and UK Trade & Investment Strength and Opportunity 2015

5 The UK has the environment for success The UK also offers an environment that is broadly supportive of the cultivation and growth of the sector: A flourishing ecosystem that is encouraging different forms of collaboration across and within the private sector as well as with government and charity funded institutions; with key public funding schemes, such as the newly extended Biomedical Catalyst, playing an important role. A compelling fiscal environment including globally competitive corporation tax rates, R&D tax credits and the Patent Box. Announced in the 2016 Autumn Statement, Wellcome Governor Sir Damon Buffini will lead a review into patient capital. The UK Government is committed to the sector, with life sciences set to play a key role in the forthcoming Industrial Strategy. The sector s award-winning trade association, the BIA, and the ABPI, are also working closely with the Government to address the opportunities and challenges of Brexit.

6 This publication was produced in association with the 3rd Annual Future of Healthcare Investor Forum which took place on 26 January BIA Supporters Engage with the BIA blog.bioindustry.org bia.me/bia_linkedin twitter.com/bia_uk