Despite the volatile geopolitical and economic environment, the UK’s life sciences sector remains resilient, even if challenges remain, according to a PwC report: UK Life Sciences Future50 - Momentum in an evolving landscape.
The report follows up with life science companies the consulting firm spoke to for a similar report published in 2023. The new report looks at the progress made by some of the companies over the last two years, while getting their views on the policies and support they would like to see.
Life sciences matters to the UK; the sector employs around 350,000 people and is worth around £100 billion to the economy. Medicinal and pharmaceutical products are the country's third largest export good by value.
However, the report acknowledges there are still barriers to realising the UK's potential. While the UK excels at science discovery it has underperformed in commercialisation and adoption, the report notes.
"Scale-up finance is comparatively weak compared to the US, for example, and there's intense global competition for investment," it notes.
The report identifies the NHS as a strategic asset for the UK and a potential testbed for innovation, as well as the country's academic excellence and scientific talent pool and says the direction of travel on funding is positive.
But it adds: "For a lot of scaling companies, there remains a significant gap in access to growth equity, leading to slower development trajectories, distracted management teams, and leaving the UK still at risk of losing promising firms to overseas markets."
The report showcases a number of companies that have reached significant milestones in their development. These included Alchemab Therapeutics, which is pursuing a novel drug discovery approach harnessing the power of adaptive immunity. The company said that it had started a Phase 1 first-in-human study of its drug targeting neurodegenerative conditions.
Also making progress is Microbiotica, which is developing oral precision microbiome medicines. Phase 1b trials of its drug began in November 2024. The study is enrolling patients with mild-to-moderate ulcerative colitis across site in the UK and Europe.
Several companies revisited by PwC had also reached important regulatory clearances, turning their research into commercial products. Companies at this stage included Brainomix, an AI powered diagnostic imaging company focused on stroke and lung disease, which received FDA clearance for its CT-based software that quantifies lung disease features relevant to interstitial lung disease. The approval opens the US market for the company’s product called e-Lung.
Strategic partnerships were also central to the growth of many of the businesses that PwC surveyed. Alchemab Therapeutics partnered with Lilly to develop novel amyotrophic lateral sclerosis therapies, while Brainomix launched a strategic partnership with Boehringer Ingelheim in 2024, and during 2025 partnered with 3DR labs, in the US. Partnering with Johnson & Johnson in 2024, Nucleome is investigating the genetic factors underlying autoimmune diseases.
These collaborations, and more “represent important third-party validation for their research efforts and highlights the UK’s critical role as an engine of global life sciences R&D,” PwC said.
The success seen by the respondents to PwC’s survey was indicative of the UK’s key strength as a place for leading research and development. Respondents were positive about the UK as a place for the clinical-stage manufacture of investigational therapies for trials through to the pilot of commercial-scale manufacture of products such as research tools or medical devices.
Areas where the UK scored lower included cash management and fund raising, reflecting the difficult early-stage fund raising environment of recent years. However, as the PwC report notes: “Many of the Future50 citing challenges in these areas also reported successfully navigating these, managing to extend cash runways without a meaningful reduction in activities, or through pragmatic prioritisation of their pipeline.”
But the view was mixed, with some surveyed pointing to signs for optimism around funding, while others saw a subdued funding environment.
Overall, looking at key areas for the UK’s life sciences sector, respondents to the survey were optimistic in relation to international and national collaboration, along with the prevailing M&A activity and access to talent and skills. Respondents were least optimistic about access to NHS data and collaboration with the NHS, and government policies supporting the life science sector.
When respondents were asked which policy levers they considered of importance, R&D tax credits and unlocking further institutional capital came out on top. Respondents largely agreed that government policies on R&D tax credits had played a crucial role in fostering innovation in the UK life science sector, while the Mansion House Reforms, aimed at unlocking institutional capital, were also recognised as a positive step.
On drug the issue of pricing the report added: “To achieve the ambitions of the UK’s Industrial Strategy – and to deliver both growth and better health outcomes – there is a burning platform for the UK to focus on restoring predictability and sustainability in pricing and reimbursement.”
PwC also consulted with senior executives from five large pharmaceutical and medical devices companies. They ranked the UK’s key strengths as the strong academic and research base, as well as the well-established research hospitals and research centres.
These respondents added that setting out criteria for data sharing would allow large companies, including pharmaceuticals and diagnostic firms, to gain insights that accelerated drug discovery, and develop pathways for more preventative health measures.
Looking at the drivers for direct investment in the UK, the report says: “From the interviews, it is clear that the decisions made in the global boardrooms on where to locate investment in areas such as R&D and manufacturing are complex. Companies consider a broad mix of factors, including areas where the UK demonstrates clear regional strengths, such as the quality of the local science base, access to skilled talent, and the strength of local and academic research institutions.”
Further reading:
- SCI research: UK life sciences missing out on billions through competitiveness gap
- Life science investment benefits 'undervalued' warns report
- Life Sciences leadership: The UK and the EU set out plans for sector growth and investment
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