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  • Jonathan Poyer

Biotech Capital Market Environment - Calm? Storm? Sunshine?

Updated: Sep 14, 2022



Did you know there are currently 7,000 known rare diseases* such as ALS (Lou Gehrig's disease), cystic fibrosis, and muscular dystrophy that affect about 1 in 10 Americans.


As the chart below illustrates, only 17% of rare diseases can be treated today with an FDA approved therapy.


There are typically only a couple of new approvals per year at most.


This led me on an exploration of the IPO market to see what has been going on across the board in biotech.


Thanks to our friends at LifeSci Partners:


2022

  • 95 Biotech transactions totaling just over $11B vs. 2021 YTD: 243 Biotech transactions totaling just over $32B

  • 40 Biotech transactions totaling just under $4B in Q2 2022 vs. Q2 2021: 64 Biotech transactions totaling just over $10B

  • 10 Med Tech transactions totaling just over $800M v. 2021 YTD: 62 Med Tech transactions totaling just under $10B

  • No Med Tech transactions in Q2 2022 v. Q2 2021: 13 Med Tech transactions totaling just over $1B

Private Transactions

  • Biotech: 185 US Transactions / 41 European Transactions

  • Med Tech: 113 US Transactions / 15 European Transactions

We are coming out of the longest and deepest pullback in the history of the Biotech space. 2021 was a “rout” according to some analysts (#MarkCharest).


Take a look at an analysis of the 93 IPOs from 2021:

Investors not really liking the new issues after 2021!


It seems like the follow-on market is leading the way. But with all of the shake-outs coming out of 2021 and with the cost of capital increasing, I am betting we are going to see some M&A activity start to percolate.


Opportunities often present themselves when fund flows, momentum and trend followers clash with good old fashioned fundamentals.



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