Analysts have warned that the medical device industry is not completely immune from any effects of a potential recession. With fears that a recession is looming, investment firm Needham said companies with capital equipment exposure could be the most vulnerable as hospitals look to repair equipment, instead of replacing it. During the 2008-2009 recession, sales in capital equipment declined for about 12 months, while procedure growth slowed for several years.
With a growing number of deals worth $1 billion or more, 2021 values are slowly inching past 2020’s record year, as mergers and acquisitions also move higher, indicating a potentially stronger second half of the year.
If there are three takeaways from this year’s dealmaking efforts, they appear to be record-setting partnerships, lackluster M&As, and massive amounts of research funding via the U.S. government.
While COVID-19 dominated the clinical data news during the month of April, with 45% due to trial delays, suspensions and terminations, and another 12% focused on therapeutic and vaccine development targeting the deadly infection, a number of companies still posted positive phase III data for other indications and are preparing for regulatory filings and commercialization.
While the number of venture capital financings are continuing the upward trend begun in 2018, amounts raised are down from last year, aside from series B rounds that have brought in 28% more in funds of $5.49 billion.
The pleasant memories of summer vacations are sure to fade quickly for biotech investors who are returning, post-Labor Day, to the harsh realities of markets that are not ready to embrace the sector anytime soon. As we head to the end of the third quarter, there is no momentum being built by blue-chip biopharmaceutical companies, as their share values languished once again last month.