The biopharmaceutical sector is stumbling through the early months of 2022, as investors appear to be pulling back from the enthusiasm that marked much of the last two years. BioWorld’s Biopharmaceutical Index (BBI) is down 4.2% through last week and the Nasdaq Biotechnology Index shows a drop of more than 15%, while the Dow Jones Industrial Average (DJIA) has likewise fallen 5.58%. In contrast, BBI had a 10.5% gain in 2020 and a 5.93% gain in 2021. While each of those years represent the top two years for financings in the history of the industry, 2022 appears to be lagging in that regard as well, with January financings down by 55% over the prior year.

Med-tech deals are showing a 136% increase in value, partially due to rising interest in digital health technologies, and despite decreasing activity focused on the COVID-19 pandemic. While deal values are up, the opposite is true for M&A values. They have fallen by 15% in comparison with the same time frame last year.

The number of biopharma deals with nonprofits or government entities has dropped over last year, partly due to fewer COVID-19-related alliances, but the activity in 2022 is still strong in comparison to pre-pandemic years.

An increasing number and rising value of high-money biopharma deals has placed early 2022 above all recent years, even though there are fewer partnerships overall.

Stocks that make up BioWorld’s Drug Developers Index have tumbled by more than 17% since the start of the year, with only five of the 30 component companies showing a rise in share price. The Nasdaq Biotechnology Index and the Dow Jones Industrial Average also are down by 12.2% and 2.41%, respectively, indicating the biotech industry, which has experienced huge stock surges during the past two years, is now struggling, dropping more sharply than the broader markets.

The amount of money raised in January by biopharma companies has fallen 55% from the same month in 2021 and 31% from January of 2020, indicating less enthusiasm from investors and a potential slowdown in financings for 2022. In total, January of 2022 has recorded significantly less fundraising than each of the past two years, with $4.8 billion (79 transactions), well below 2021’s $10.79 billion (159 transactions) and down from 2020’s $6.95 billion (131 transactions). 

Only three other years during the past three decades did the U.S. FDA approve more new molecular entities (NMEs) than the 50 cleared in 2021, a year that was plagued with numerous delayed decisions. There were 53 NME approvals in 1996 and 53 again in 2020. The record is held by 2018, which had 59 approvals.

During the most infectious COVID-19 month since the pandemic began, January recorded an increase of 82.3 million confirmed cases worldwide, an amount that is fourfold the average monthly increase over the past year. It comes at a time when the highly transmissible omicron variant continues to circulate, bolstered by a new subvariant, BA.2, which is outcompeting its predecessor. Meanwhile, regulatory agencies are authorizing antivirals, swapping monoclonal antibodies based on their efficacy against omicron, and approving new vaccine options, including Novavax Inc.’s protein-based vaccine Nuvaxovid (NVX-CoV2373).

While BioWorld’s Infectious Disease Index showed a huge 144% climb in 2020, an enthusiastic response toward defeating the SARS-CoV-2 virus, the index dropped significantly in early 2021 and spent most of the year spiking up and down, reacting abruptly to the promises of herd immunity and the threats of vaccine-resistant variants.

The amount of clinical data reported in January so far is currently 30% below the amount reported during the same month last year, which was the slowest month of 2021.