With 2021 biopharma financings already at 40% of last year’s total, there is a good likelihood that a new record will be made for the industry, assuming wide open public windows and robust venture capital activity continue.
Dangerous blood clots and thrombocytopenia, rare simultaneous side effects seen with two adenoviral vector vaccines from Astrazeneca plc and Johnson & Johnson, as well as a worldwide spike in COVID-19 cases and deaths, primarily in India, has set the stage for what could soon become the next big vaccine option, a protein subunit candidate from Gaithersburg, Md.-based Novavax Inc.
Just four months after Blue Water Acquisition Corp. raised $50 million in an IPO, it set out on April 27 to merge with Clarus Therapeutics Inc., the developer of testosterone replacement therapy Jatenzo, valuing the Northbrook, Ill.-based firm at $379 million. Earlier in April, BCTG Acquisition Corp. announced plans to buy Cambridge, Mass.-based targeted precision cancer company Tango Therapeutics Inc. for $353 million, about seven months after completing its $167 million IPO. Both Clarus and Tango are seeking the public markets by merging with a special purpose acquisition company, or SPAC, a method that is becoming increasingly popular and an alternative to the traditional IPO.
While biopharma deals are not showing any drastic changes over last year, three areas that continue to dominate the landscape include the pandemic, oncology and cell and gene therapies. The lack of mega-mergers so far this year, specifically those above $10 billion, is also holding M&A values down by about 61% compared to this point in 2020, even though the number of mergers has climbed.
The volume of phase I-III clinical trial data so far in 2021 is a full 26% more than it was by this point last year, yet the proportion of news focused on the COVID-19 pandemic continues at much the same rate.
While biopharma deals are not showing any drastic changes over last year, three areas that continue to dominate the landscape include the pandemic, oncology and cell and gene therapies. The lack of mega-mergers so far this year, specifically those above $10 billion, is also holding M&A values down by about 61% compared to this point in 2020, even though the number of mergers has climbed.
FDA approvals for biopharma products have reached their highest point in six years for a first quarter, while regulatory data is up a full 45% over last year. A total of 265 regulatory items were tracked by BioWorld in March 2021, representing the highest monthly volume, not only for this year, but for last year as well.
More than a quarter of all biopharma/nonprofit deals and grant awards in 2021, as well as 79% of the disclosed funding, targets the COVID-19 pandemic, following a trend that began in the early months of last year as SARS-CoV-2 reared its ugly head.
With less uncertainty surrounding the pandemic, the biopharma industry appears on track to shift efforts back to its internal programs and possibly meet, if not exceed, the record-breaking deal level of 2020. Strong financial markets, however, may continue to hold M&As down.
In just one quarter, 14 med-tech companies overall, nearly half the number in 2020, debuted on public markets around the world, and venture capital (VC) financings for the industry have hit a five-year record. The IPOs raised a total of $3.7 billion, a more than 15-fold increase from last year’s first quarter, whereas 107 VC rounds brought in 77% more, or $4.1 billion, in the first quarter (Q1) of 2021.
