A Rise in IPOs Revive Investments for the Global Pharma and Biotech Industry
The heightened private equity and venture capital (PEVC) deal activity in the global healthcare industry during the recession years, 2008–2010, witnessed a decline post-2010. However, the fall in deals was not uniform among the constituent sectors, with the pharmaceutical, biotechnology and healthcare equipment sectors experiencing a much sharper decline in investor interest than the healthcare technology and provider segments. Investors started to bet on providers based with the conviction they can provide quicker and safer returns than the pharmaceutical and biotechnology space, which is ridden with regulatory challenges and patent expiries.
New analysis from Frost & Sullivan’s Private Equity and Venture Capital Investment in the Global Pharmaceutical and Biotechnology Industry reveals the total number of PEVC deals in the pharmaceutical and biotechnology industry decreased from 1063 in 2010 to 480 in 2013. Though the returns from the pharmaceutical and biotechnology industry have been dwindling, they are better compared with the performance of other industries.
“PE deals in the pharmaceutical sector have been relatively stable during the post-recession period whereas activity in the biotechnology segment began to decrease after reaching its peak in 2010, due to the uncertainty caused by healthcare reform in the US, long incubation periods, and delayed approvals,” said Frost & Sullivan Financial Analyst Dr E Saneesh. “VC deals across both these sectors also started to plummet from 2011 due to risks associated with regulatory uncertainty, long gestation periods, and increased cost of production.”
However, the strong comeback of initial public offerings (IPOs) in 2013 signals a positive outlook for investment in the pharmaceutical and biotechnology industry. The number of IPOs in the global biotechnology sector surged by 100% between 2012 and 2013, primarily on account of the 26 IPOs that took place in the US. IPOs in the pharmaceutical industry also rose with 11 deals in 2013, after the volume of IPOs declined to almost one-sixth of the sector’s value between 2011 and 2012.
As a result of the rise in IPOs, exit opportunities are expected to increase for investors. The trend will be further fuelled by the anticipated growth of corporate investor-backed IPOs.
“PEVC investors in the global pharmaceutical and biotechnology industry have demonstrated maximum interest in oncology drugs, followed by anti-infective drugs and pharmaceutical contract laboratories,” stated Dr Saneesh. “They have also concluded the maximum pharmaceutical- and biotechnology-related PEVC deals in the US and are expected to continue to do so in the forthcoming years. Industry players most aligned with these trends will be well positioned to obtain financial support from PEVC investors.”
Private Equity and Venture Capital Investment in the Global Pharmaceutical and Biotechnology Industry is part of the Financial Benchmarking in the Healthcare Industry (www.financialservices.frost.com) subscription, which also includes research services in the following markets: Private Equity and Venture Capital Investments in Global Healthcare Industry, Analysis of Mergers and Acquisitions Trends in the US Healthcare Provider Industry, and Merger and Acquisition (M&A) Trends in the Global Pharmaceutical and Biotechnology Industry. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
Related News
-
News Ophthalmologic drug product Eylea faces biosimilar threats after FDA approvals
Regeneron Pharmaceutical’s blockbuster ophthalmology drug Eylea is facing biosimilar competition as the US FDA approves Biocon’s Yesafili and Samsung Bioepis/Biogen’s Opuviz. -
News ONO Pharmaceutical expands oncology portfolio with acquisition of Deciphera
ONO Pharmaceutical, out of Japan, is in the process of acquiring cancer-therapy maker Deciphera Pharmaceuticals for US$2.4 billion. -
News First offers for pharma from Medicare drug price negotiations
Ten high-cost drugs from various pharma manufacturers are in pricing negotiations in a first-ever for the US Medicare program. President Biden’s administration stated they have responded to the first round of offers. -
News Eli Lilly’s Zepbound makes leaps and bounds in weight-loss drug market
In the last week, Eli Lilly has announced their partnership with Amazon.com’s pharmacy unit to deliver prescriptions of Zepbound. Zepbound has also surpassed Novo Nordisk’s Wegovy for the number of prescriptions for the week of March 8.&nbs... -
News Chasing new frontiers at LEAP – The National Biotechnology Strategy Keynote
On the third day of LEAP (4–7 March 2024, Riyadh Exhibition and Convention Centre, Malham, Saudi Arabia) the CPHI Middle East team hosted the Future Pharma Forum, to set the scene for an exciting new event for the pharma community, coming to Riya... -
News Pfizer maps out plans for developing new oncology therapeutics by 2030
Pfizer dilvulges plans to investors around growing their cancer portfolio, and the drugs they will be focusing on developing after their aquisition of Seagen in 2023. -
News Generics threat to Merck’s Bridion as Hikma seeks pre-patent expiry approval
Merck has disclosed they received notice from Hikma Pharmaceuticals for seeking a pre-patent expiry US FDA approval for Hikma’s generic version of Merck’s Bridion. -
News Bernie Sanders vs Big Pharma - the latest on drug price negotiations
In a hearing in front of the US Senate, three of the biggest pharmaceutical companies in America are challenged over exorbitant prescription drug prices, with Sanders claiming their actions are limiting the population's access to affordable healthc...
Position your company at the heart of the global Pharma industry with a CPHI Online membership
-
Your products and solutions visible to thousands of visitors within the largest Pharma marketplace
-
Generate high-quality, engaged leads for your business, all year round
-
Promote your business as the industry’s thought-leader by hosting your reports, brochures and videos within your profile
-
Your company’s profile boosted at all participating CPHI events
-
An easy-to-use platform with a detailed dashboard showing your leads and performance