The New Frontier - Your weekly science and innovation update

AI, AI and more AI!

The intersection of AI and life sciences continues to be a prominent theme this year, with significant advances and investments shaping the landscape already. This week Eli Lilly and Nvidia announced an expansion of their alliance by establishing a new AI co-innovation lab with a pledge to invest over $1 billion during the next five years, this collaboration will centre on expediting closed-loop discovery processes and developing advanced AI models to enhance clinical development. Eli Lilly will leverage its expertise in drug research and development, alongside its laboratory infrastructure, while Nvidia will contribute its AI capabilities. A core focus of the initiative is to generate real-world laboratory data that can be used to train and validate AI models. Beyond research and development, the collaboration between Eli Lilly and Nvidia will explore the application of AI throughout the entire value chain, including manufacturing processes.

The momentum in the industry is further evidenced by leading AI companies pivoting towards healthcare. Following the recent announcement by OpenAI, Anthropic has introduced Claude for Healthcare and expanded features tailored for life sciences. These enhancements are aimed at optimising clinical trial operations and improving regulatory workflows.

A record $3.8bn has been raised globally in 2025 for AI-powered drug discovery, with the UK sitting behind only the US in terms of deal count and capital raised in 2025. Despite these advancements, the sector faces notable challenges. Recent analysis by PitchBook has underscored the importance of having the right data in the appropriate format as a prerequisite for progress. Furthermore, the success of the industry hinges on achieving positive outcomes in later-stage, large-scale clinical trials.

Sentiment still low, optimism Rising. Key takeawys from JPM’s Healthcare conference

This weeks JPMorgan Healthcare conference marked a significant week for the life sciences sector. Many of the key trends brought up at the event have already been highlighted in previous notes. However a few noteworthy developments have emerged.

• Biopharma companies are increasingly turning to innovative financing structures. These include royalty-based instruments and hybrids that combine elements of philanthropic and venture investment, demonstrating a shift towards more diverse funding mechanisms within the industry.

• While M&A is often associated with big pharma, the event highlighted that mid-sized pharma companies are also actively pursuing acquisitions. This indicates a broadening of M&A activity across the sector.

• China has emerged as a key player in licensing, with major pharma firms increasingly engaging in deals with Chinese partners. One analyst described the current environment as a “sputnik” moment for US biotech, underscoring the competitive pressure and the strategic importance of China-linked licensing agreements.

• Obesity remains a hot topic, however the market is evolving, with attention shifting to new treatment formats and targeting diverse customer segments.

• AI is moving from a bolt-on tool to a core capability. This reframes investor diligence from “do you use AI?” to “what proprietary data advantage do you control, what cycle-time reduction can you prove, and how does that translate into better clinical odds and faster commercial execution?”

A recurring theme throughout the discussions was the increasing significance of policy and pricing considerations. These elements are strategic variables that can shape company decisions. Firms are preparing for more challenging European pricing negotiations in the wake of recent US price reductions and tariff-linked policy changes.

To coincide with the event Endpoints Signal launched a new Biopharma Sentiment Index which canvasses the views of more than 1,400 industry participants (it is of note that the respondents are tilted towards the US, making up 75% of responses). The Q4 2025 findings show an overall sentiment score that is below the baseline, suggesting a sector that is still working through a multi-year downturn. On a brighter note, expectations 12 months out are still tilting negative but are better than current readings. In particularl there is positive sentiment and greater optimism around business conditions, financials and hiring. If this flows through into action we could see more expansion-led real estate activity in 2026.  AI is also expected to improve drug discovery in 2026. We expect AI to translate into tangible, disruption‑fuelled movements in real estate decisions.

74,862 new firms, 65,101 failures: The UK Tech paradox

In 2025, the UK witnessed the establishment of a record-breaking 74,862 digital and technologies companies. The impressive figures highlights the strength and dynamism of the UK tech sector.   London emerged as the clear leader in company formation, accounting for 35,056 of the newly registered firms. The South East followed as the next most active region, with 7,101 companies formed during the year. Despite the record number of new companies, the sector faced considerable pressures that need to be tackled for the sector to reach its true growth potential. In 2025, a total of 65,101 digital and technology companies declared insolvency.

Clinical trial uptick sets the stage for 2026 growth

New figures from the MHRA show that clinical trial applications in the UK rose by 9% between January and November last year, compared with the same period in 2024.  This is positive news, particularly as there are further reforms on the way which should boost these numbers further as well as the launch of a new five-year strategy for the MHRA. Changes to the way that MHRA operates and further reforms to make it easier to conduct clinical trials will improve the UK’s standing as a leading place to conduct this type of activity. Furthermore the establishment of a national health data research service should streamline access to the UK’s national health dataset making it easier to drive innovation that leads to clinical trials. Let’s see how these numbers move in 2026.

Other stories we are tracking….

Research from McKinsey states that new FDI into the UK is growing. From January 2022 through September 2025, inflation-adjusted total announced inflows averaged around $85 billion a year. That is about 40% higher than annual pre-pandemic levels and exceeds the roughly 20% increase in global announced FDI over the same period. Furthermore in 2022-25, the UK was the world’s third largest destination for newly announced FDI projects, behind the US and on par with India. Clean energy and AI (mainly infrastructure) are powering this growth. As part of this note I keep a track of FDI announcements so we can keep on top of who is investing and where.

The Telegraph reported that the NHS is preparing to test an experimental “longevity” drug, with Cambridge-linked firm LinkGevity. Even allowing for hype, “longevity” is increasingly being reframed as an intervention in specific biological pathways tied to high-cost chronic disease, rather than lifestyle content for the wealthy.  The drug being tested is designed to prevent a specific type of cell death called necrosis, which contributes to a range of age-related diseases. If trials are successful it could become the world’s first proven anti-ageing treatment.

An article in the Financial Times underscores Scotland’s burgeoning space sector, with Glasgow building more satellites than any other city in Europe. The article notes that Scotland’s space sector has benefited from academic strengths and companies spanning the value chain from manufacturing of satellites through to launch and then analysing data.

WestBridge III, a lower-mid market tech-focused private equity fund, has secured a £34m commitment from the British Business Bank.

Manchester Royal Infirmary delivered the UK’s first NHS treatment to a patient with an aggressive blood cancer. The CAR-T treatment was developed, researched and manufactured in the UK. Autolus Therapeutics developed the therapy.

The Novo Nordisk Foundation will provide funding of up to $856 million to the life science incubator BioInnovation Institute. The funds will be used to support life science and biotech start-ups across Europe, while also branching out into new scientific and technological fields like AI and quantum.   

It was a good week for UK life sciences VC fundraising with Nuclera, Beacon Thereapeutics and bio.bio raising significant late-stage funding.