For the first time this year, the amount of money raised by the biopharma industry has dropped below the amount collected during the same timeframe last year, even though the number of transactions has climbed by nearly 10%.
The world has been running an ultramarathon since the COVID-19 pandemic began, but despite the ups and downs of cases and deaths, the wins and losses of clinical efforts, every day is another step forward toward herd immunity and the finish line.
Although 14 of the 17 stocks that make up BioWorld’s Neurological Disease Index (NDI) dropped in value over the last month, the index is still ahead by about 9% this year, with a huge surge by Prothena Corp. plc leading the way.
For the first time this year, BioWorld’s Biopharmaceutical Index is showing signs of life with an increase of 5.6%, boosted primarily by Alzheimer’s disease efforts from Biogen Inc. and Eli Lilly and Co. Biogen’s stock (NASDAQ:BIIB) is up about 36.4% this year and has been front and center due to its controversial FDA approval for Aduhelm (aducanumab) in June. Lilly’s stock (NYSE:LLY) has climbed by more than 44%, and it was granted breakthrough therapy designation a month ago for its Alzheimer’s candidate donanemab.
While 2020 was clearly a busier year for grants and nonprofit deals with biopharma companies, pandemic efforts continue to drive the activity in these two areas. Through mid-July, there have been 204 grants valued at $1.75 billion, and 516 bio/nonprofit deals worth more than $8 billion, up from $4.66 billion only a month ago.
Stock market exuberance, particularly in favor of an innovative industry working to pull the world out of the deadly COVID-19 pandemic, led to drug developers shares surging 30% in 2020. But if one thing is certain, it is this: Markets usually pull back and that is partially why BioWorld’s Drug Developers Index is showing only a 2.06% gain so far this year, in contrast to both the Nasdaq Biotechnology Index and the Dow Jones Industrial Average, which are up 6.28% and 10.96%, respectively.
While overall clinical trial activity appears to be slowing, June was the busiest month for the year, and, in fact, all of last year, with a total of 436 items of news related to phase I, phase II and phase III research.
Med-tech mergers and acquisitions are at their highest level in four years and have already beat the full year of 2020, primarily due to a multibillion-dollar whopper completed in April. The number of industry partnerships also tower over prior years, with digital health efforts covering about 40% of the volume. Looking only at this year, the second quarter (Q2) of 2021 performed better than the first quarter (Q1) in terms of both M&As and deals.
The number of med-tech IPOs completed in the first half of 2021 is nearly as many as last year’s full year, and amounts raised through venture capital rounds in just six months are only about $100 million shy of record funds raised in all of 2020.
While second quarter financings pale in comparison to the same timeframe last year, a stellar first quarter more than makes up for the gap, and 2021 has officially raised nearly 10% more than the first half of biopharma’s – and perhaps the world’s – most unforgettable year.
