Biopharmaceutical Sector Update:
Executive Summary

Evolving Financing and Deal Environment

October 5, 2021

Full Presentation (PDF)

In this report, we examine the financing and deal environment for the biopharma sector, with consideration of the ongoing COVID-19 pandemic. In preparing this report, we have analyzed data in the public and private financing markets and have also looked at the M&A market, with commentary on notable transactions.

Key points:

  • A good news week for COVID-19. New case volume continues to drop at the same time that Merck and Ridgeback reported remarkable data for an oral antiviral to treat the disease.
  • Efforts to advance drug price reform in the U.S. Congress appear to have been stymied. The Democrats are struggling to get a larger social spending bill through and may need to restructure the bill.
  • A panel being held on Wednesday, October 6 during BioFuture is well worth listening into on the drug price reform topic. (see www.biofuture.com)
  • The Nasdaq Biotech Index fell 5.6% last week, the largest drop in many months.
  • Conversations with market participants indicate that generalist investors are exiting the biopharma markets as the pandemic subsides.
  • Macro news is not great. The 10-year Treasury bond yield has crept up 28 basis points in a month and historically tight credit spreads have reversed.
  • The value of the life sciences sector has dropped a full half trillion dollars in several months, closing Friday with a total value under $8 trillion.
  • The sector lost $240 billion last week alone, led by weakness in life science tools.
  • The rout in life science tools stocks was broad with over 85% of players seeing a decline in value last week.
  • The IPO market in September was the lightest we have seen since the pandemic began.
  • The venture privates / crossover equity market also weakened significantly last week—for the first time in months.
  • Q3 private debt volume was robust and stronger than volume in the first two quarters of 2021.
  • M&A has picked up nicely in September, highlighted by Merck’s announced acquisition of Acceleron.
  • September has seen three big pharma deals announce—the most since the pandemic began.

Full Presentation (PDF)

Please contact Torreya if you have any questions or comments:

Tim Opler  |  Partner, New York  |   tim.opler@torreya.com  |  bio
Stephanie Léouzon  |  Partner, London  |   stephanie.leouzon@torreya.com  |  bio

Data sources: S&P Capital IQ, Crunchbase, press releases and Torreya Calculations