Wave of opportunities with rising debt, private capital and VC funding
Despite a decline in overall global activity and a wariness from investors toward pre-profit companies in some industries, the biopharma sector continues to see significant levels of interest and investment. This is being driven by a number of factors, including a strong pipeline of innovative technology and new drugs in advanced R&D stages, robust demand from investors, who seek to leverage the higher returns on investment associated with the industry and the need for pharma companies to replenish their pipeline to secure future revenue.
Although geopolitical factors are expected to impact the overall global market in 2020, the underlying strength of this sector will continue to promote deal making. With the rate of advancement in the AI space facilitating speedier drug and tech development, we expect to see a continued whet of appetite in the biotech and pharma space.
Our new report, The Future of Capital Raising in Biotech and Pharma, explores the changing landscape of how biotech and pharma companies are financing their growth, trends in the market and the biggest changes in the sector over recent years. Some of the main themes of the report include:
- Funds raised in the debt capital markets (DCM) space have shown significant increases, growing 80% from USD 57 billion in 2017 to USD 103 billion in 2019, driven by the pharma sector issuing large debt offerings to fund strategic and expensive acquisitions as they seek to secure their future pipeline and revenue stream.
- Deeper pools of VC are funding biotech development with an increase in investment of 30% between 2017 and 2019.
- Private capital raising is on the rise as larger investments are being made — up 45% in 2019 when compared to 2017.
- Licensing and collaboration agreements continue to increase as the sentiment on risk sharing and cost sharing grows.
- The US continues to dominate the biopharma space, but competition from innovative Asian biotech companies is rising, and equity investment in European biotechs hit a record high in 2019.