Guest post by Doro Shin, Thought Leadership Manager at Informa Pharma Intelligence
While 2015 was a record year for investments within the life sciences industry, investors became wary toward the end of the year and activities declined in the fourth quarter. Although enthusiasm appeared to wane, the downward trend didn’t carry over to 2016 according to an upcoming white paper, Finding Finance: Pharma, Biotech & Medtech Capital Raising 2016. Drawing on Informa’s Pharma Intelligence data assets Medtrack and Strategic Transactions, the analysis found that capital continued to flow into the life sciences sector and the industry remained an attractive place for investors in 2016.
Early-stage life science companies experienced a similar pace of funding in 2016 as they did in 2015. Through the end of October 2016, 183 Series A and seed rounds were completed worldwide based on data gathered by Scrip and Strategic Transactions, which was an average of 18 companies per month. In comparison, there were 224 Series A and seed rounds for all 12 months of 2015, or a monthly average of 19 companies. The average disclosed investment was also similar between the two years—deals in 2015 averaged USD 20.5 million while the average investment in 2016 per deal was USD 20.3 million.
Among the Top 10 Seed and Series A Rounds in 2016, the amounts raised far surpassed the average investment per deal, and ranged from USD 67 million to USD 154.4 million. US-based companies remained attractive to investors, and comprised half of the Top 10 Seed and Series A Rounds in 2016, but the top spots belonged to China-based companies (although one does have headquarters in the US).
As for initial public offerings (IPOs), life science companies secured significant cash globally and raised more than USD 8.5 billion in new offerings. Again, this is on par with prior years; life science IPOs totaled more than USD 9 billion and USD 8 billion in 2014 and 2015, respectively. However, the sector was able to maintain similar levels of due the high amounts raised for the top three offerings, which accounted for more than two thirds of the total sums raised in 2016.
The Top 10 Life Sciences IPOs in 2016 demonstrated an even wider diversity in geography in comparison to the startups. Although the US previously dominated the space, and continues to remain active, only three of the Top 10 were for US-based companies, all falling in the bottom half of the rankings. The remaining offerings were scattered across China, South Korea, UK, The Netherlands, and Bermuda.
For more details on the above, and to learn who is raising the money, and who is making these investments, be sure to read Finding Finance: Pharma, Biotech & Medtech Capital Raising 2016, which also includes data and commentary from Informa Economics, Informa Global Markets and EPFR. The white paper will be released during Biotech Showcase™, taking place in San Francisco, CA, January 9–11, 2017.