Decline of UK Life Sciences Sector Raises Concerns

For two consecutive years, the Hardman & Co Healthcare index has underperformed the FTSE 100 and FTSE All-Share indices. This uncommon trend in healthcare stocks is attributed to broader economic conditions and several companies' need for additional working capital, leading to anticipated equity raises and lower share prices.

Investment consolidation has reduced the number of institutions interested in small, capital-intensive companies, significantly diminishing the investment pool. Valuations of large London-listed firms are also lower than their international counterparts, fueling rumors of an exodus to overseas markets like the US.

London's institutional investors are urged to support the life sciences sector, historically a good return provider, to prevent its potential disappearance. However, low valuations also create opportunities. Tissue Regenix, with its regulatory-approved tissue technologies, shows strong sales growth and profitability, yet its market value is only $57 million, despite investments exceeding $150 million.