Hunting the Glaxo of tomorrow

Britain is home to some of the most revered research institutions in the world. Some are government-run, others are government-funded, and universities up and down the land carry out globally significant work fighting disease, illness and improving our wellbeing.

According to the Association of the British Pharmaceutical Industry (ABPI), the pharmaceutical sector has, over the past decade, consistently generated a large trade surplus for the UK - at £5 billion per annum. It invests more than £13 million every day in R&D, and employs around 68,000 people directly in the UK.

We've all heard of the big UK drug companies – GlaxoSmithKline, AstraZeneca and Shire - they're among the world's largest. But, of course, it wasn’t always that way. GSK can trace its history back exactly 300 years to the days of a single pharmacy in early 18th century London.

Between the two companies that would eventually merge in 2000 to form the GSK of today - Smithkline Beecham and Glaxo Wellcome - many drugs and treatments were invented, including laxatives, steroids for skin problems, the Ventolin asthma treatment and popular antibiotic Amoxil.

The point here is that all pharmaceutical and biotech companies tend to come from humble beginnings. And it's quite possible that the Glaxo of tomorrow is already listed on AIM, going about its business before making a breakthrough, or getting that key drug over the many regulatory obstacles required before the company can even begin to think about making any money.

There are currently 48 companies listed in AIM's Pharmaceuticals & Biotechnology sector worth almost £6 billion in all.

But it's not just about the medicines supplied by headline-hogging drug companies. An entire industry is built around supporting and improving the NHS. From keeping hospitals clean to supplying everything from high-tech equipment to needles, bandages and linen.

In fact, there are another 30 companies sat within the AIM Health Care Equipment & Services sector to which patients clearly owe a huge debt of gratitude. They're worth a combined £1.2 billion, and growing.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.