Wave of opportunity with rising debt, private equity and venture capital funding
Despite a decline in overall global activity and investor wariness of not-for-profit companies in some industries, the biopharmaceutical sector continues to see significant levels of interest and investment. This is due to a number of factors, including a strong portfolio of innovative technologies and new drugs in advanced stages of R&D, strong demand from investors, who are looking to take advantage of the higher returns on investment associated with the industry and the need for pharmaceutical companies to rebuild their pipeline to secure future revenues.
Although geopolitical factors are expected to impact the overall global market in 2020, the underlying strength of this sector will continue to drive deal-making. With the pace of advancement in the AI space facilitating faster drug and technology development, we expect to see a continued appetite in the biotech and pharmaceutical space.
Our new report, The Future of Capital Raising in Biotechnology and Pharma, explores the changing landscape of how biotech and pharma companies fund their growth, market trends, and the biggest shifts in the industry in recent years. Some of the main themes of the report include:
- Funds raised in Debt Capital Markets (DCMs) saw significant increases from $57 billion in 2017 to $103 billion in 2019, driven by the pharmaceutical sector issuing large debt offerings to fund acquisitions strategic and costly as they research to secure their future pipeline and revenue stream.
- Deeper venture capital pools are funding biotech development with investment increasing by 30% between 2017 and 2019.
- Private capital mobilization is on the rise as larger investments are made – up 45% in 2019 compared to 2017.
- Licensing and collaboration agreements continue to increase as sentiment about risk and cost sharing grows.
- The United States continues to dominate the biopharmaceutical space, but competition from innovative Asian biotech companies is increasing and equity investment in European biotechnology reached an all-time high in 2019.