Med-tech deal value in February jumped to $255.61 million, an increase of 137.23% from the $107.75 million in deals from January, yet below the 2023 monthly average of $886.13 million. On the M&A front, med-tech transactions hit their lowest point since May 2019, totaling only $16 million.
In the first month of 2024, med-tech financings passed the $1 billion mark once more, raising a total of $1.06 billion through 46 transactions recorded by BioWorld. It was the fourth consecutive month where med-tech financings exceeded the $1 billion threshold, just slightly down from the $1.07 billion raised in December.
At least 64 biopharma companies have announced workforce reductions so far in 2023, resulting in 6,000 jobs lost in the industry. It is a clear indication of a continuing trend begun last year in which executives needed to rein in spending to keep innovative programs afloat.
Biopharma deal-making activity continues to keep the same pace as 2020, but the value of completed mergers and acquisitions is still painfully languishing in comparison with other recent years. While pandemic partnerships appear to be falling, oncology and regenerative medicine are driving the high-money deals, as are an increasing number of billion-dollar pacts. Meanwhile preclinical efforts account for about 23% of this year’s total value, and the amounts of up-front payments, particularly for clinical-stage products, are rising.
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.
Despite the SARS-CoV-2 pandemic, biopharma dealmaking values in the second quarter of 2020 increased by 22.4% since the first quarter, and M&A values – thanks to Abbvie Inc. completing in May its $63 billion buyout of Allergan plc – are at a four-year high. A total of 529 deals, including licensings, collaborations and joint ventures, reported during the second quarter had projected values of nearly $49 billion, a step up from the 471 deals and $40.8 billion value of the first quarter.
Swept up into a coronavirus whirlwind, the biopharma industry has ramped up development of therapeutics and vaccines and altered business plans to fight the SARS-CoV-2 virus in a way that nobody could have imagined only months ago.
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.
Last year’s robust deal-making environment, high-value M&As, increasing financings and a supportive public market has set the stage for continued med-tech enthusiasm among investors and partners in 2020.
With a 349% increase in stock price since its June debut on U.S. markets, Boston-based Karuna Therapeutics Inc. secures the title of best IPO performer so far in 2019. The stock skyrocketed in November following positive top-line phase II data of Karxt in acute psychosis in patients with schizophrenia, providing a potential read-through to larger indications such as Alzheimer’s disease and pain.