Biotalk Episode 13: 2023 Year-In-Review Report: Global Trends in Biopharma Transactions​

In this episode, Geoff provides valuable insights into our report, focusing on critical areas such as:









Biotech capital markets: XBI performance and IPO volume







Private biotech markets: Financing deal value and volume remained flat







Strategic transaction activity: Q4 marked a surge in multi-billion-dollar acquisitions







Market outlook and advice for the year ahead









We invite you to listen to our podcast and download our report for the Insights page and welcome the opportunity to discuss its contents with you.  







Timestamps:







Deal Context: 0:37







Our Advice for the Current Market: 6:11







Transcription:







Welcome to Biotalk. My name is Geoff Meyerson, CEO and Co-founder of Locust Walk, and you are listening to Biotalk, our podcast for biotech deal makers.







This episode of Biotalk is focused on Locust Walk’s 2023 Year-In-Review market conditions Report, in which we apply the latest data to analyze current activities in the biopharma deal landscape. Each quarter, Locust Walk’s deal team compiles key statistics and trends showcasing what is happening in the global private and public capital markets and strategic partnering and M&A activity.







Deal Context, Quarter Highlights and Key Takeaways, and Future Outlook







In the next few minutes, I will provide dealmaking context, highlight events that have had a critical impact on the biotech industry, and provide our outlook for the future along with our advice on how you can survive as a biotech dealmaker.







To provide some structure, I will first cover biotech capital markets, touching on both public and private market performance over the past year.  I will then transition into strategic transaction activity, covering both M&A and licensing. Please note, the full report published on the Locust Walk website is over 60 slides, so while I will do my best to summarize, as always I encourage you to check out the full report for additional detail. To download this report, please go to locustwalk.com and go to our “Insights” page.







As the listener of a biotech podcast, you may well know that this has been a relatively challenging year for the XBI until the middle of the 4th quarter. The index traded below end-of-year 2022 levels for much of the year, but in spite of this, finished up 8% due to a remarkable 4Q rebound. Digging in a little deeper, concurrent with this upswing, Q4 saw a significant uptick in total follow-on offering volume and size (up to $3.5B from $1.4B in Q3), as well as PIPE volume and size (up to $1.7B from $600M). Although IPO volume in the 4th quarter dropped from Q3 levels, annual IPO volume increase 30% from 2022 levels. Performance for IPO, follow-on, and PIPE offerings in Q4 was also generally positive in line with market performance. While all these indicators suggest the beginnings of a gradual thaw for biotech public markets, biotech public investors will be hoping Punxsutawney Phil does not see his shadow come February, heralding another XBI downturn, as was the case in 2023.







Unfortunately, winter continued through 2023 for biotech private markets. Overall private financing deal value and volume in 2023 remained relatively flat with the depressed levels observed in 2022. Financing activity continues to be increasingly dominated by clinical stage opportunities, with deal value attributed to these deals increasing from 38% in 2021 to 58% in 2023. Interestingly, the distribution of Series rounds has remained relatively consistent over this period, suggesting that the bar for each financing round stage has risen somewhat uniformly across this perio...