Biotech Private Equity and Investment Trends for 2024

The past few years have seen a boom in venture capital financing in the biotechnology sector. VCs invested $35 billion in biotechnology companies between 2019 and 2021. With a global market value of $1.37 trillion by 2022, the market is expected to reach a compound annual growth rate of 13.96% between now and 2030.

Biotechnology is a cutting-edge field of science that uses living organisms and biological processes to create innovative solutions for a vast range of industries and applications. Biological systems and techniques are used to develop and improve products, processes and services.

As the name suggests, biotechnology combines biology with technology, enabling scientists and innovators to manipulate living organisms at the molecular level, including genetic engineering, bioinformatics, molecular biology and Other subjects are involved, including synthetic biology.

Among other things, the industry has revolutionized medicine, leading to the development of vaccines, new drugs and treatments. Biotech also promotes scientific discoveries and innovation, fostering the development of new technologies and approaches in many fields.

As a result, it has attracted significant investment across the world in various forms such as equity investment, venture capital funds, private placement or public offering. The type of investment depends on the specific stage of development and nature of the biotechnology endeavor.

Recent biotech investments by Armistice Capital, Madison Avenue and others

Biotech investments are expected to increase in 2023 from various venture capital firms including Armistice Capital, Madison Avenue Partners, Invus, and others.

One of the most notable investments this year was the $212 million financing of Gossamer Bio, a clinical-stage biopharmaceutical company engaged in the development and commercialization of its proprietary drug ceralutinib for the treatment of pulmonary arterial hypertension.

Another major biotech investment was a $75 million financing of IO Biotech. This clinical biopharmaceutical company is leading the advancement of new immune-modulating cancer vaccines based on its T-WIN technology platform. This investment, again, included Armistice Capital with partners including Vivo Capital.

5 biotech investment trends for 2024

Looking ahead, here are five trends emerging in the biotech landscape.

1. Fewer IPOs

180 biotechnology companies went public between 2020 and 2021, but only 22 made it in 2022. This slowdown can be attributed to the fact that existing public biotechs are struggling to maintain their value along with regulatory setbacks.

As a result, analysts expect a return to a more measured pace of initial public offerings in 2024 and beyond. Despite this, dealmaking is expected to accelerate as big pharma companies actively seek partnerships with startups.

2. More licensing activity

Mixed market projections will prevail regarding licensing in 2023, with investors closely examining collaborative efforts. That said, there are several notable biotech licensing deals already underway.

Moderna, famous for its coronavirus vaccine, signed a collaboration agreement with CytomX Therapeutics to expand its presence in the oncology sector. Meanwhile, Eli Lilly has announced its plans to acquire Sigilon, a biopharmaceutical company developing encapsulated cell therapies. The announcement caused Sigilon’s stock to surge 691% in June.

3. More ‘omics’ focus

The so-called “omics” field attracted more than $2.4 billion in VC funding in 2022. Inspired by the pandemic, the omics field related to genomics, metabolomics, proteomics and transcriptomics has delved into cellular analysis to develop and understand the root causes of diseases. Effective treatment. As a market, it has almost tripled since 2019.

Omics stands out for its potential to revolutionize medicine. Instead of relying solely on traditional parameters like blood pressure or body temperature, doctors would, in theory, be able to trace each patient’s individual cells, paving the way for truly personalized medicine.

4. AI and ML

Artificial intelligence and machine learning are increasingly being applied in various fields, especially biotech. Hence VCs are likely to continue investing in AI and ML biotechnology companies.

To date, AI and ML have been widely used by biotechnology companies to improve the automation of various operations and processes. For example, AI can be used to find biomarkers for use in the development of drugs and diagnostics. AI algorithms can also be used to identify human disease characteristics for diseases such as cancer.

5. Big Data

There has never been more data available for biotech analysis than now. With the integration of technologies like sensors and smart technology, scientists are now in a position where they have unprecedented access to data.

This naturally gives rise to data privacy, storage and security challenges, and specialist startups are emerging to improve the management and protection of sensitive patient data. Companies are also using big data to develop better and safer treatments for patients and to develop ways to improve patient outcomes and outcomes for existing treatments.