The $27.9 billion raised through biopharma follow-on offerings in the early months of 2024 has hit industry records never seen before. So far in three-and-a-half months in 2024, the industry has raised more than was raised during 21 of the past 24 full years.
Although 2020 is the highest money-making year on record for the biopharma industry, a direct comparison of the first five months indicates that the amount raised so far in 2021 is 22% ahead of last year, while the number of financings climbed 26%.
Money raised through biopharma financings so far in 2020 is double the amount raised within the same timeframe of 2019, partly due to two large financings completed in May by Sanofi SA, which is working on candidates to treat or prevent COVID-19, the disease caused by the SARS-CoV-2 virus.
Biotech investors had every reason to feel bullish heading into the new decade. The sector had turned around in 2019 and was riding a wave of a very strong fourth-quarter performance, with the BioWorld Biopharmaceutical Index closing up 14% for the year after being underwater from April through to September. Unfortunately, those great expectations were quickly erased during J.P. Morgan Healthcare conference week (Jan. 10 – Jan. 17), which turned out to be a very low-key affair absent of any blockbuster M&A revelations. As a result, confidence has now given way to concerns about the prospects for biopharmaceutical companies going forward, particularly as unfavorable political rhetoric on drug pricing will certainly be dialed up during this election year.
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.