Life Sciences Investment Programme: Process Evaluation and Early Impact Assessment (British Business Bank)

Summary

• The Life Sciences Investment Programme (LSIP) is an intervention with an allocation of £250 million designed to address a funding gap for growth-stage (Series B+) life sciences firms in the UK.p.4
• The UK life sciences sector generates an annual turnover of £108 billion and supports 300,000 highly skilled jobs, ranking as the third largest globally behind the US and China.p.15
• By September 2025, the British Business Bank committed £134.3m across 3 funds, leveraging £689.3m of private sector funding for a total programme size of £823.6m.p.32
• Under the programme, recipient funds have deployed £109.0m across 14 deals, including £70.6m in 8 UK companies and £38.4m in 6 overseas companies.p.32
• One early portfolio exit was achieved through the acquisition of UK-based EyeBio by Merck & Co for up to $3 billion (approximately $3.04B).p.31
• To unlock fund manager participation, the British Business Bank modified its initial UK content requirement in summer 2023 from the higher of 3x investment or 50% of the fund to the lower of the two measures.p.6
• Under the UK Modern Industrial Strategy, the British Business Bank will commit an additional £4 billion of growth capital to crowd in £12 billion of private investment.p.24

Key insights

1. 1. The funding gap in UK life sciences has shifted from early spin-out stages to growth-stage Series B+ financing, exacerbated by the loss of access to European Investment Fund cornerstone capital.p.5
2. 2. Relaxing the strict UK content rule to the lower of 3x commitment or 50% of the fund in Summer 2023 was critical to unlocking pan-European fund manager participation.p.6
3. 3. Anticipated co-investment from sovereign wealth fund Mubadala did not materialise at the scale originally envisaged, delivering a smaller $25m commitment to only one fund.p.30
4. 4. US start-ups have access to nine times more capital by their fifth round than UK counterparts, leading many UK scale-ups to exit early or relocate.p.16
5. 5. Five UK companies backed by the initial LSIP fund have collectively raised over £500 million from other sources to finance clinical trials and scale teams.p.6
6. 6. Life sciences products take on average 12 years and £1.15 billion from drug discovery to licensing, driving the need for long-term patient capital.p.19
7. 7. The programme has successfully supported established fund managers in launching growth strategies, but has not yet fostered new emerging VC teams.p.6