Macroeconomic trends in Q4 wiped out biopharmas stock market gains from earlier in 2018, with the S&P Pharmaceuticals Index the only major biopharma index to finish the year in the black. M&A and product licensing volumes were also down, despite notable deals such as Takedas $64bn acquisition of Shire and Bristol-Myers Squibbs $1bn payment to Nektar. Deal-making slowed in the medtech sector too, with fewer acquisitions closed and a corresponding decrease in venture investment rounds.
- Falling share prices in Q4 turned a 15% nine-month climb for the Nasdaq Biotechnology Index into a 9% year-end decline, while the S&P Pharmaceuticals Index only managed a 5% gain.
- M&A activity hit its lowest level since 2009, with 173 total deals; licensing activity also dropped from 2017 levels by both deal count (112) and value measures ($4.94bn).
- The total value of medtech M&A deals came to $27.4bn, a precipitous decline from 2017s figure of nearly $100bn.
Conversely, 2018 was a banner year for venture financing, with $16.8bn invested in drug development start-ups. Biotech IPOs set new records, with two of the biggest flotations “ Moderna and Allogene “ occurring in the final months of the year. Medtech IPOs also flourished in the fourth quarter, giving the smaller players a welcome cash injection. The FDA set records as well, with 62 novel drugs approved, and managed a slight reduction in average approval times.
- 37 drug developers raised over $100m in financing, more than double the number in 2017.
- Biotech IPOs raised a record $7.23bn, with the average amount raised tipping over $100m for the first time.
- A total of $695m was raised by device companies going public in the fourth quarter, more than any other three-month period since Vantage started tracking medtech listings in 2013.
- The FDAs 2018 class of novel drugs is forecast to sell $24bn by 2023, including new migraine drugs Aimovig, Emgality and Ajovy; Alnylam’s RNAi therapeutic Onpattro; and 17 new cancer drugs.
The progress of biopharma and medtech companies last year paints a mixed picture, said Amy Brown, co-author of the Vantage Pharma, Biotech and Medtech 2018 in Review report. However, there are signs of health, if the industry is able to capitalize on them.”
To download a complimentary copy of the report, visit http://www.evaluate.com/2018Review.
About Vantage Vantage, formerly known as EP Vantage, provides award-winning, thought-provoking news and insights into current and future developments in the industry, and is the only pharmaceutical news service underpinned by Evaluates commercial intelligence. Visit www.evaluate.com/vantage for free access to daily, data-driven news for pharma, biotech, and medtech.
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