The number of biopharma deals and mergers and acquisitions completed are on a downward slide quarter-by-quarter, although when taken as a whole, the industry in 2019 has completed as many transactions and is hitting a higher deal value than the year before, while M&A values are up by 32%.
At just under $30 billion raised through the third quarter, company financings have reached a three-year high in the ever-burgeoning industry of medical technology. The amount, according to data collected by BioWorld MedTech, compares with $25.76 billion for all of 2018, and $19.4 billion for all of 2017, indicating an increase of 15% and 53%, respectively.
Heading into the final quarter, the sector's leading biopharmaceutical companies once again underperformed the general market in September. Overall, the third quarter was extremely lackluster with investors showing little interest in getting involved, a situation that is likely to prevail until the end of the year. Companies will need to release strong 3Q financial reports just to tread water in the coming months.
In the third quarter, global biopharmaceutical companies collectively raised more than $12 billion from public and private transactions. Year to date (YTD), the sector has generated $41.5 billion, according to BioWorld data, putting it on track for a $55 billion haul for the year.
The recent FDA approval of Ibsrela (tenapanor), Ardelyx Inc.’s treatment for irritable bowel syndrome with constipation in adults, brings, according to the agency’s data, the number of new molecular entities (NMEs) to 27 this year. With just three months remaining, it appears that the biopharma sector is on pace with the five-year average of about 43 NMEs approved annually.
Although various government incentives have been introduced in the past few years to encourage and support more research and development designed to accelerate the discovery of new antibiotics, they, in themselves, have not been enough.
The pleasant memories of summer vacations are sure to fade quickly for biotech investors who are returning, post-Labor Day, to the harsh realities of markets that are not ready to embrace the sector anytime soon. As we head to the end of the third quarter, there is no momentum being built by blue-chip biopharmaceutical companies, as their share values languished once again last month.
Although investor sentiment continues to remain low and unlikely to change for the remainder of the year, it seems that fact has fallen on deaf ears of those companies looking to graduate to the public ranks. Already in the first few days of September, five biopharma companies have added themselves to the IPO runway, bringing the number of pending U.S. offerings to 12, according to BioWorld.