Isomorphic megadeal lifts UK biotech funding to five-year high
UK biotech companies raised £2.11 billion in equity financing in the second quarter of 2026, as a record round for Isomorphic Labs pushed venture investment to its highest level in five years.
Zoom in: Venture capital accounted for £2.05 billion of the total, according to the BioIndustry Association’s latest quarterly financing report.
- That brings UK biotech venture investment to £2.6 billion for the first half of 2026 – already above every full-year total recorded between 2022 and 2025.
- The UK attracted 61% of the £3.3 billion invested across European biotech companies during the quarter.
- Public follow-on financing contributed a further £58 million, while no UK biotech completed an IPO.
The big picture: The headline figure was dominated by Isomorphic Labs’ £1.55 billion Series B, the largest private financing secured by a UK biotech company.
- The Alphabet-owned AI drug discovery company accounted for roughly three-quarters of all UK biotech venture capital raised during the quarter.
Yes, but: The figures also point to a broader recovery beneath the megadeal.
- Excluding Isomorphic, UK biotech companies raised £498 million in Q2, almost double the £279 million secured during the same period last year.
- Series A and later-stage companies raised £190 million and £225 million, respectively, once the Isomorphic financing was removed. Eight seed-stage companies secured a combined £51 million, with an average round size of £6.4 million.
Zoom in: Funding is beginning to return to the middle of the market, where many companies have struggled to secure sufficient capital to move programmes through development.
- Twelve companies raised between £10 million and £25 million during the first half of 2026, twice as many as during the whole of 2025.
- The quarter’s other leading rounds included: CellCentric’s £163 million Series D, RQ Bio’s £85 million Series A, Cytospire’s £61 million Series A and STORM Therapeutics’ £42 million Series A.
Across Europe: According to BIA’ data, Germany raised £293 million in venture financing during the quarter, while France secured £283 million and Switzerland £239 million.
- European biotech venture investment reached £3.3 billion overall, up 276% from £893 million in Q1. The US remained considerably larger, with companies raising £6.8 billion.
Reality check: Public markets have yet to participate meaningfully in the recovery.
- UK follow-on financing rose 61% from the previous quarter to £58 million, led by Avacta Group’s £19m AIM raise but there were no UK biotech IPOs by UK companies and there hasn’t been one since 2022.
- France, by comparison, raised £936 million through follow-on offerings during the quarter.
What they’re saying: “This quarter shows continued improvement in funding confidence and deal flow right across the UK biotech sector,” said BIA CEO Chris Molloy.
- He also added that the “UK public markets need to recognise, cover and return to backing our sector and private momentum must be joined by robust, public sector-managed, investor-advised translational funding. This combination will de-risk the early-to-mid stage companies and sustain growth across every tier of the sector, making the whole of the UK fit to fund.”
- He also mentioned the importance of Novartis’ acquisition of Myricx Bio for up to $1.5 billion to reinject capital in the local ecosystem.
What’s next: The test will be whether the UK can sustain investment across multiple quarters and convert the success of companies such as Isomorphic Labs and Myricx Bio into capital for the next generation of biotechs.
