Both are well above the average B and C rounds raised in 2022, and even beat heady 2021’s averages (Fig. In the first few weeks of 2023, Danish biotech Hemab Therapeutics, chaired by Alnylam’s former founder CEO John Maraganore, raised a $135 million series B to support a phase 1/2 study of a bispecific antibody for a rare clotting disorder, Glanzmann thrombasthenia, and Lyon, France-based Amolyt Pharma, run by serial entrepreneur Thierry Abribat, pulled in $138 million in a series C on the back of positive phase 2a data for long-acting parathyroid hormone receptor-1 agonist eneboparatide for hypoparathyroidism. The chosen few can still win large rounds. Such basics were forgotten during the upturn, and inflated private valuations persisted beyond it - partly explaining the lower investment and merger and acquisition activity during 2022.
To attract funding in 2023, biotechs need strong data (ideally clinical data), a differentiated asset or technology, disciplined spending, sensible time frames and realistic valuation expectations. The IPO window slammed shut in 2022, leaving no exits for private companies. The collapse of Silicon Valley Bank in March 2023 hasn’t helped confidence in biotech fundraising (or bank stocks), even if federal action does secure companies’ existing deposits.įig. Limited partners (who fund the VC funds) are shutting off the taps as they nurse their public holdings and want evidence of payback on their invested funds before putting more money to work. Raising new venture capital (VC) funds has become tougher, too. Pfizer’s proposed $43 billion acquisition of Seagen in March 2023 may catalyze more action, but several pharma CEOs are talking down mega-mergers. Pharma acquirers haven’t picked up the slack, either: mergers and acquisitions during 2022 were smaller, and rarer, than many anticipated at the start of the year ( Nat. A quick exit via an initial public offering (IPO) is no longer an option: IPOs in 2022 fell to just 25% of pre-pandemic levels, and few expect much change this year (Fig.
With little insight into when the wider economic malaise will end, many venture capitalists continue to face tough decisions about which of their portfolio companies to support.
But investors aren’t giving it away so easily. There is still plenty of private money about: $35 billion of venture capital was raised in 2022, more than during pre-pandemic 2019. The 2020s have flung biotech from the heights of pandemic exuberance, when cash grew on trees and anyone with a lab coat could take a company public, to the belt-tightening lows of 2022, with layoffs, liquidations and falling valuations.Īs the dust settles in 2023, a more discriminate financing environment is emerging.
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