As amounts raised through financings are significantly shy of last year, med-tech deals and M&As appear strong, with digital health dominating the landscape.
Med-tech financings are still down by 55% in comparison with the same time frame last year, but they have gained some ground by narrowing the gap with the pre-pandemic year of 2019.
Med-tech financings in the second quarter of 2022 rose from last quarter by 26% with a total $8.5 billion raised, the most for a Q2 in all years prior to 2020.
Amounts raised through biopharma financings in the second quarter are down by 61% since last year and are at the lowest point since 2017. The same holds true when looking at the first half of the year. Each of the prior four years raised more than this year by the end of June, signifying that investors are backing up after an intensely robust financing environment following the emergence of the COVID-19 pandemic and the feverish biopharma therapeutic and vaccine development that began in 2020.
Nonprofit deals with biopharma companies in 2022 indicate that 92% of the disclosed funds are going toward infectious disease therapies, with COVID-19 accounting for 79% of the total.
Analysts have warned that the medical device industry is not completely immune from any effects of a potential recession. With fears that a recession is looming, investment firm Needham said companies with capital equipment exposure could be the most vulnerable as hospitals look to repair equipment, instead of replacing it. During the 2008-2009 recession, sales in capital equipment declined for about 12 months, while procedure growth slowed for several years.
Nonprofit deals with biopharma companies in 2022 indicate that 92% of the disclosed funds are going toward infectious disease therapies, with COVID-19 accounting for 79% of the total.
Numerous life sciences firms are targeting digital health and diagnostic companies for take-outs and licensing deals, placing the med-tech industry in a strong position in 2022.
In sharp contrast with the biopharma industry, the med-tech industry has completed mergers and acquisitions worth a record amount in the first quarter of 2022, with the $63.7 billion combined value towering over every full year prior to 2021.
The amount of money raised by med-tech companies in the early months of 2022 is the lowest amount recorded for a first quarter since 2017. Financings in 2021 were down by 17% over the prior year, which was marked by a flurry of activity and interest in digital technologies and diagnostics with the onset of the COVID-19 pandemic.
