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.
While strong financial markets could create merger and acquisition headwinds for med tech, the volume of both M&As and deals are rising above each of the prior three years, indicating a growing industry interest that is not always clear in the financials.
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.
As COVID-19 vaccinations continue to roll out, momentum builds with strong phase III data for what could become the fourth and fifth walls of defense in the U.S. With three vaccines already authorized, research reported in March offers hope for a second adenovirus vector vaccine candidate with Astrazeneca plc’s AZD-1222, as well as for the first protein subunit vaccine option with Novavax Inc.’s NVX-CoV2373.
The number of venture capital financings completed in March, as well as the total amount they raised for the biopharma industry, are more than any other month in the past 21 years. With 92 rounds worth $6.2 billion, the volume is 35% higher than the September 2020 record of 68, and the total funds are 66% more than the $3.8 billion raised in the next top month of June 2020.
As COVID-19 vaccinations continue to roll out, momentum builds with strong phase III data for what could become the fourth and fifth walls of defense in the U.S.
Med-tech M&A continued an upward trend through March, with 30% more completed in 2021 compared with this point last year. Deals, including collaborations, licensings and joint ventures, are up by 13%, although the value of those deals are trailing 2020 by 39%.
While historical data suggest venture capital rounds will eventually dip below the peak years, biopharma financings completed in recent months indicate the dollars are continuing to climb in 2021. A maturing industry, the high potential of cell and gene therapy products, the advancing technologies of artificial intelligence and machine learning, as well as an eager financial community, are all responsible for the ever-increasing availability of private money.
