Biotalk Episode 17: Q2 2024 Report: Global Trends in Biopharma Transactions

During this episode of Biotalk, Geoff Meyerson, CEO of Locust Walk, unpacks our Q2 2024 Report: Global Trends in Biopharma Transactions Report. Each quarter, Locust Walk’s deal team compiles key statistics and trends showcasing the current state of global private and public capital markets, strategic partnerships, and M&A in the biopharma sector.







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







Biotech capital markets: The XBI remained flat in Q2, diverging from the bullish S&P 500, with fewer IPOs but more capital for later-stage companies.







Private biotech markets: Venture financing rebounded with $5.5 billion across 44 deals, though the industry is divided between companies able to raise capital and those struggling.







Strategic transaction activity: M&A and licensing deal values stayed consistent with Q1, focusing on Phase 2 companies and notable ex-US acquisitions.







Market outlook and advice for the months ahead: Locust Walk expects continued positive momentum, advises careful cash use, notes non-dilutive capital accessibility, and predicts gradual recovery through 2024 with a stronger 2025.







We invite you to listen to our podcast and read our report and welcome the opportunity to discuss its contents with you. Subscribe or follow Biotalk on Apple Podcasts | Spotify.   







Timestamps:







0:39 Deal Context, Quarter Highlights and Key Takeaways, and Future Outlook







8:31 Our Advice for the Current Market







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 2024 Second Quarter market conditions Report, in which we apply the latest data to analyze current activities in the biopharma deal landscape. Locust Walk maintains proprietary transaction and finacning databases and each quarter our 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







To provide some structure, I will first cover biotech capital markets, touching on both public and private market performance over the past quarter. 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.







The XBI traded relatively flat across the second quarter, diverging meaningfully from the broader S&P 500, which saw bullish gains. Key drivers of this divergence were the XBI being more impacted by the higher-than-anticipated CPI reading in April relative to the S&P 500 and the record-breaking growth of AI/tech companies. One stunning non-biotech stat to consider: Nvidia alone accounts for more than a third of the S&P 500’s gains in 2024.







In terms of public fundraising, IPO activity slowed in the second quarter, with only 3 such deals. The weakened macroeconomic outlook and generally poorer performance of first-quarter IPOs reduced market demand for new companies. From my perspective, public biotech markets remain closed to all except a selection of late-stage companies with de-risked approaches, ideally accompanied by insider support and sufficient near-term news flow.