Biotalk Episode 9: 2023 Q3 Report: Global Trends in Biopharma Transactions

During this episode of Biotalk, Geoff Meyerson, CEO of Locust Walk, delves into our 2023 Q3 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: 









The underwhelming performance of public biotech markets 







The impact of high-interest rates on biotech companies’ capital-raising endeavors 







The trends of stagnant licensing deals, M&A volume, and deal sizes 







Advice for the current market and future outlook  









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: 0:58







Future Outlook: 8:50







Our Best Advice for the Current Market: 11:32







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 Third Quarter 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.









Our report covers key takeaways for the sector across US, Europe and Asia geographies for a comprehensive view of biotech dealmaking







We invite you to review our report and hope you will find it useful in your business







To download this report, please go to locustwalk.com and go to our “Insights” page. As always Locust Walk is happy to speak with you further if you have any questions about our views or if we can be helpful to guide your organization through the current market environment.









Deal Context







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









Jumping right in, public markets has shown poor performance through the third quarter, with the XBI showcasing a decrease in value, down by ~12% since the end of the second quarter



This drop brings the XBI back to its position at the end of Q1 2023, with it dropping by 8 percent over the last twelve months, underperforming the S&P which has been up 20 percent over the same period, a staggering 28 percent underperformance.







The number of companies trading below cash has increased from June where there was 165 companies, compared to the end of September where there is 196 companies trading below cash. That number is approaching the all time high and is significantly higher than the average of about 25 companies trading below cash, that was seen before the pandemic.











The decrease in the XBI is most likely driven by current poor macroeconomic headwinds specifically a high interest rate environment that makes it difficult for biotech companies trading below cash to raise capital







Licensing deal flow this quarter was stagnant with the same number of deals as Q2,