The biotech investment climate sank into deep insecurity by the close of 2015, as shown in EP Vantage‘s new “Pharma & Biotech 2015 in Review” report. The flutterings around companies raising capital, via venture capital or IPO, diminished – which invites a retrospective on the investment environment in years past. Perhaps this will help inform how cash-hungry companies will fare this year.
The IPO market, of course, was terribly volatile. Things were coasting smoothly last year, buoyed by the biotech bumper market of 2014, up through the end of the third quarter – when, as we well know, all hell broke loose.
Biotech venture rounds favored “the lucky few” in 2015, as more cash was poured into a smaller number of upper echelon life sciences companies. This trend piggybacked on the outsized IPO success we saw in 2014 and 2015.
Interestingly, according to a new report from EP Vantage, $9.6 billion was raised in biotech venture capital in 2016 – double the figure in 2008. However, only eight more deals were completed in 2016, which shows how much individual venture rounds have swelled in the years since the recession. Here are the top rounds:
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
With the considerable market downswing of 2016, particularly in the life sciences sector, it’ll be interesting to see how the year’s venture numbers pan out. Here’s a distribution of investment, in terms of stage, over the past five years:
To that end, here’s an interesting look at the last investment stage companies reached before they exited:
