Biotech stocks and the overall market have taken divergent paths in the past month, not unlike what was seen throughout 2020, except this time, they are moving in opposite directions. While BioWorld’s Drug Developers Index (BDDI) appeared to be on the upswing only a month ago, it changed course in the final weeks of September.
With a 14% increase in regulatory news over this time last year, 2021 has proved to be the busiest that the biopharma industry has ever seen, as companies continue to seek clearances of their late-stage pipeline products with a backdrop of an unprecedented number of COVID-19 pandemic efforts.
The speed at which the med-tech industry is completing mergers and acquisitions in 2021 is something quite contrary to the typical slowdown seen when the financing window is open wide. But yet, a total of 477 M&As valued at $109.18 billion have closed in the first three quarters this year, more in volume and value than for each of the previous three years, and during what appears to be the second best year on record for financings. The sector has already raised $42 billion. On the other hand, the lack of disclosed terms continues to weigh heavy on deals, making them appear on paper to be significantly below recent years, down by about 73% in comparison with 2020’s first three quarters. Importantly, though, numbers of completed deals for every quarter and for the combined nine months are at their highest levels ever.
With a growing number of deals worth $1 billion or more, 2021 values are slowly inching past 2020’s record year, as mergers and acquisitions also move higher, indicating a potentially stronger second half of the year.
With more than two months of financings yet to record for the year, the med-tech industry has already raised more money through IPOs and venture capital rounds than in each of the prior four years. But fewer funds collected through follow-on offerings and private placements puts 2021 about 30% below the full-year total for 2020, which was $59.7 billion.
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