Venture capital investor Abingworth has raised Europe's largest ever life sciences venture fund, worth £300m.
The news will be welcomed by the industry, particularly by firms at an early stage of development. Chief executives of several such companies have recently hit out at the lack of funding in the UK.
Michael Hunt, of ReNeuron, the stem cell company that was forced to list on Aim after exhausting all other funding options, said: "It's very tough over here. We benefit from a little bit of funding but it's not nearly enough to sustain us."
Roland Kozlowski, chief executive of Lectus Therapeutics, a private biotech firm, went to Japan to get seed funding. He said: "I left virtually no stones unturned. I had to go to Japan to get backing. I also looked to the US but there was no one interested in investing in a UK company."
Dr Stephen Bunting, managing director at Abingworth, said: "I think it has been very difficult for people over the last few years. It would be good if we could get more venture funds out there. There are very good opportunities and there are some very good people around to back."
But venture capital funding is not the only source of money for early-stage companies. Aim provides an opportunity, as do companies such as IP Group and Biofusion, which commercialise intellectual property originating from research institutions.
But industry players say the government should provide more funding or financial incentives for early-stage companies in the life sciences sector.
There are a number of schemes available across the UK. The Office of Science and Innovation, for example, allocates science funding through its eight research councils, and other sources of funding include the Grant for R&D scheme, under which companies can apply for as much as £500,000 or R&D tax credits.
But Mr Kozlowski said: "Many of the grants are woefully inadequate. I think the government is trying very hard through its schemes but the actual amount is comparatively small for a sector that requires considerable amounts of cash."
Ultimately, experts agree that the situation is not as bad as it is in some other countries. Andy Smith, an investment manager at SV Life Sciences, said: "The best science in the UK will almost always get funded." But for those companies with a potentially successful idea, difficulties remain. Mr Kozlowski said: "We have a superb intellectual base within this country and the UK has been very successful in this sector. But it's looking to the future which is the issue, and being able to compete on a global scale."