A comparison of the last three years puts 2019 on top for having brought the most money into the biopharma industry across 15 key therapeutic markets – a total of $299.78 billion vs. $284.7 billion in 2018 and $201.56 billion in 2017.
The analyses includes financings tracked by BioWorld and deals and grants that are within the Cortellis database, all covering therapeutic areas included within the corresponding BioWorld Financings Reports for 2019. The newly released reports can be found here. They indicate an increase of 5.3% in overall funding over 2018, which had risen by 41% over 2017.
Overall, cancer, neurology/psychiatric and endocrine/metabolic are the three markets showing the highest amounts of money in 2019: $101.9 billion, $27.5 billion and $20.6 billion, respectively. Together, those three areas are 46.8% of the total amount raised through all therapeutic areas.
Both cancer and neurology/psychiatric are the top two areas for the most money raised in 2017 and 2018. What changed is the number three top spot, which went from immune in 2017 to hematologic in 2018 to endocrine/metabolic in 2019. The top three accounted for 52% of the total in 2017 and 61% of the total in 2018.
It is important to note that there is an overlap in funding within the BioWorld analyses, meaning for companies working in more than one therapeutic area, all areas received credit for the financing. Deals, which include M&As, represent those in which money was disclosed and that had a specific therapeutic area represented by the deal. Without the overlap, a total of $57.63 billion was raised through financings in 2019. Deals hit $160.3 billion during the year, while completed M&As had an overall value of $223.8 billion.
When looking at total money from all sources, a number of therapeutic areas raised significantly more in 2019 than the year before: inflammatory (up 291% to $19.2 billion), ocular (up 159.5% to $12.5 billion), musculoskeletal (up 156% to $14.19 billion), dermatologic (up 118% to $20.57 billion) and respiratory (up 103.5% to $10.8 billion). Four others showed less dramatic increases: immune (up 80.4% to $18.53 billion), endocrine/metabolic (up 46.7% to $20.64 billion), genitourinary/sexual health (up 42.4% to $6.05 billion, but below $6.9 billion in 2017), and gastrointestinal (up 11.28% to $13.08 billion).
While cancer and neurology/psychiatric companies brought in the most money during 2019, they both fell in comparison to 2018 by 7.26% ($101.9 billion vs. $109.9 billion) and 34.08% ($27.5 billion vs. $41.7 billion), respectively. Other drops in funding were seen with hematologic (down 70.87% to $9.6 billion), toxicity/intoxication (down 60.7% to $885 million), cardiovascular (down 25% to $7.06 billion) and infection (down 5.7% to $17.2 billion).
The lowest amounts raised through financings, deals and grants for therapeutic areas in 2019 were toxicity/intoxication ($885.2 million), genitourinary/sexual health ($6.05 billion) and cardiovascular ($7.06 billion).
In both 2017 and 2018, deals and grants accounted for 60% of the total, with financings covering the other 40%. That changed in 2019, with financings encompassing 31% of the total and deals and grants encompassing 69%.
Focus on financings
The three top amounts raised through financings were cancer ($25.57 billion), neurology/psychiatric ($9.76 billion) and endocrine/metabolic ($7.11 billion).
Large venture capital financings of cancer therapeutic companies included $299.2 million for Palo Alto, Calif.-based Bridgebio Pharma Inc. in January, a $325 million series B by Mainz, Germany-based Biontech SE in July, a $250 million round by Philadelphia-based Century Therapeutics Inc., also in July, and a $275 million series A round by New York-based Nuvation Bio Inc. in October.
The neurology/psychiatric therapeutic area also benefitted from Bridgebio’s large venture round, as well as a $180 million series A by Switzerland-based Arvelle Therapeutics, which is developing products for epilepsy, and a $235 million round for Research Triangle Park, N.C.-based Asklepios Biopharmaceuticals Inc.
Endocrine/metabolic also gained credit for Bridgebio’s $299.2 million round, as well as Salt Lake City-based Recursion Pharmaceuticals Inc.’s $121 million series C, and Bunnick, the Netherlands-based AM-Pharma BV’s $130.7 million series E.
Money flowing through financings into 11 of the 15 therapeutic areas dipped below the 2018 figures, but for three areas, 2019 was the best year. Gastrointestinal companies raised $6 billion, a modest 3.4% increase over the $5.8 billion raised in 2018, while musculoskeletal companies raised $5.75 billion, a jump of 50.7% over the $3.8 billion in 2018. Finally, ocular companies raised 51.9% more in 2019 with $4.7 billion vs. $3.1 billion in 2018. While inflammatory companies did better in 2019, having raised $2.7 billion vs. $2.4 billion the prior year, 2017 remains the best year on record with $4.84 billion.
Spotlight on deals/grants
Looking only at deals and grants in 2019, cancer and neurology/psychiatric brought in the top two amounts, $76.34 billion and $17.75 billion, respectively. The third highest amount, $16.5 billion, went to companies working in the inflammatory therapeutic space.
Included in the cancer figure is Eli Lilly and Co.’s $8 billion acquisition of Loxo Oncology Inc. in January, and Pfizer Inc.’s $11.4 billion buyout of Array Biopharma Inc. in June, as well as three mega-deals: one worth $4.2 billion in February between Merck KGaA and Glaxosmithkline plc to codevelop M-7824 for cancer worldwide, a $6.9 billion deal in March for Astrazeneca plc to develop and commercialize Daiichi Sankyo Co. Ltd.'s DS-8201 against cancers using DXd ADC technology worldwide, and a $4.03 billion deal between Amgen Inc. and Beigene Co. Ltd. to develop and commercialize oncology drugs worldwide, including China.
Large neurology/psychiatric deals include Astellas Pharma Inc.’s acquisition of Audentes Therapeutics Inc. for $3 billion in December, H. Lundbeck A/S’ purchase of Alder Biopharmaceuticals Inc. for $1.95 billion in September, and two big deals involving Neurocrine Biosciences Inc. The company signed on in January with Voyager Therapeutics for $1.89 billion to develop and commercialize VY-AADC for Parkinson’s disease, two discovery programs worldwide and VY-FXN01 for Friedreich’s ataxia in the U.S.. In December, Neurocrine formed a $1.77 billion deal with Xenon Pharmaceuticals Inc. to develop epilepsy treatments worldwide.
The inflammatory disease space logged the third highest amount of money through deals mainly due to the $13.4 billion acquisition by Celgene Corp. of Otezla and related assets from Amgen Inc. in August. Without that deal, dermatologic would have taken the third-place spot with $16.3 billion brought in through deals and grants.
Nine therapeutic areas stand out in terms of deal and grant money in 2019. Companies working on therapies in the fields of dermatologic, endocrine/metabolic, gastrointestinal, immune, infection, inflammatory, musculoskeletal, ocular and respiratory, all brought in the most money in 2019 out of the last three years. The largest increases were seen with inflammatory (up 455% to $16.5 billion), musculoskeletal (up 391% to $8.44 billion), dermatologic (up 279% to $16.33 billion), respiratory (up 217.7% to $9.04 billion) and endocrine/metabolic (up 113% to $13.5 billion).