Resilience and renewal: Unlocking UK-U.S. life sciences potential

Over the past 12 months, the UK government has committed significant investment as part of its initiative to advance the pharmaceutical sector and life sciences industry. This commitment has opened the door for greater cross-border collaboration, including significant investments from large U.S. pharmaceutical companies that have announced plans to expand operations into the UK.

However, in recent months, several of these large pharmaceutical companies have announced they are backing out of or reconsidering their investment in the UK, largely citing concerns over pharmaceutical pricing and reimbursement policies, as well as a mandatory levy on drug revenues.

Despite these concerns, can U.S. life sciences companies still find opportunities to expand their operations into the UK and foster a symbiotic relationship between the two countries? We dive into what’s happening and what’s to come.

Restoring confidence

In recent years, the UK’s appeal as a destination for life sciences investment has come under pressure. A new competitiveness framework published by the Association of the British Pharmaceutical Industry shows the UK’s ranking for foreign direct investment in life sciences slipped from second in 2017 to seventh in 2023, with foreign direct investment in the sector dropping by around 58% (from around 1.9 billion to around 0.8 billion British pounds) over that period.

Meanwhile, industry announcements of paused investment this year total nearly 2 billion pounds’ worth of projects. Pharmaceutical companies have pointed to the UK’s pricing regime (notably high rebates to the National Health Service (NHS)), slow trial setup and scale-up barriers as reasons to reassess investment.

The UK government’s stated ambition to become a “life sciences superpower” has also been tempered by practical barriers. Delays in clinical trial approvals and declining patient enrollment—exacerbated by capacity constraints within the NHS—have made the UK somewhat less attractive as a testing ground, driving a decline in clinical trial enrollment.

At the same time, investors increasingly cite a lack of commercialization capability in the UK as a barrier to scaling early-stage discoveries.

Still, UK research output remains exceptional, with two UK universities ranked among the top 10 globally for life sciences, according to Times Higher Education’s 2025 ranking report. However, few UK firms possess the operational experience to translate innovation into globally competitive products. The U.S., by contrast, offers a mature venture ecosystem and deep managerial expertise in regulatory navigation, reimbursement strategy and market access.

Despite these headwinds, several areas show promise. Recent reforms by the UK’s Medicines & Healthcare products Regulatory Agency aim to streamline approvals and align more closely with U.S. Food and Drug Administration standards for medical technologies. In addition, the UK’s Life Sciences Industrial Strategy is intended to attract both foreign and domestic investment and encourage regional innovation. If executed effectively, these changes could restore confidence among transatlantic investors and position the UK as a more agile, globally integrated market.

For investors and operators alike, the challenge lies in balancing risk and resilience and leveraging the UK’s scientific assets while addressing the structural barriers that hinder scale.

How companies can respond

In a volatile environment defined by high borrowing costs, geopolitical uncertainty and rapid technological change, agility is the defining advantage. For UK and U.S. life sciences companies, strategic flexibility—through scenario planning, portfolio optimization and diversified funding—is essential.

Many UK life sciences companies are using hybrid operating models: retaining their early-stage discovery and clinical development in the UK while establishing a U.S. presence (or U.S.-based operations/partnerships) to access additional funding and accelerate commercialization and market access. This strategy allows access to deep U.S. capital markets and expansive payer networks while retaining the scientific and regulatory credibility of UK-based innovation. Given the strong capital markets of the U.S., UK companies have pursued U.S. exchanges, as opposed to UK exchanges, for public financing.

Similarly, the UK’s deep health data assets present opportunities for overseas (including U.S.) biotechs to explore UK-based research or data collaboration footprints, leveraging UK expertise and NHS-linked cohorts for real-world evidence generation.

In addition, collaborative funding mechanisms, such as the UK Biobank’s data-access partnerships with U.S.-based companies, illustrate how transatlantic cooperation can accelerate discovery without duplication of effort.

Companies are also investing heavily in artificial intelligence, bioinformatics and precision diagnostics, fields that inherently benefit from cross-border collaboration. With the U.S. leading in computational infrastructure and the UK excelling in genomic science, data-sharing frameworks will be a cornerstone of future innovation. However, organizations must also navigate new ethical and governance risks, ensuring compliance with both the UK General Data Protection Regulation and evolving U.S. data privacy regulations.

Looking forward, companies that incorporate scenario modeling into strategic planning—such as testing assumptions about regulation, currency volatility and policy direction—will be better positioned to capture growth opportunities as investment flows shift. Those that treat uncertainty as an operational variable, rather than a deterrent, will sustain competitive advantage across the Atlantic.

Middle market implications

For middle market life sciences companies, the transatlantic corridor presents both opportunity and complexity. These companies often hold the most promising innovation pipelines but face the steepest barriers to commercialization.

For UK-based companies, building relationships with U.S. investors requires not just scientific excellence but robust governance, transparent reporting and a proven path to market. Companies that engage early with U.S. partners can access vital funding, experienced leadership and regulatory insights, allowing them to accelerate time to market and share compliance burdens.

Conversely, U.S. middle market companies can look to UK collaborations to tap into emerging clusters in cell and gene therapy, as well as digital health applications driven by NHS partnerships.

The recent U.S. investment pullback underscores that U.S. participation in the UK life sciences ecosystem is not guaranteed. U.S. companies want to see clear policy and commercial signals before committing to UK scale-up sites. This raises regional opportunity: Hubs outside the “Golden Triangle” of London, Oxford and Cambridge may benefit if they offer lower cost, strong regional talent and infrastructure designed for scaling (e.g., Manchester and Liverpool). For midsize companies, engaging in regional cluster initiatives and designing growth around global bridge strategies may provide a resilient path.

Ultimately, the middle market is where transatlantic collaboration can have the greatest impact, helping promising companies leap from early discovery to commercial maturity while balancing capital efficiency with innovation speed.

The takeaway

UK-U.S. collaboration in life sciences remains one of the most resilient and productive relationships in the global economy. Yet sustaining this strength will require deliberate action to close gaps.

Considerations for life sciences companies going forward include:

• Strengthen the UK-U.S. relationship to balance innovation with access to capital and commercialization experience.
• Invest in scenario planning to anticipate policy and market shifts across both jurisdictions.
• Leverage the UK’s research base, NHS data and regional diversity to attract global investment beyond the Golden Triangle.
• Build transatlantic teams and governance structures capable of navigating both regulatory environments efficiently.